According to a 2015 study by the Department of Health and Human Services, 52% of American seniors will require long-term care at some point.
Most people only worry about paying for this care once they enter their golden years, and even then they think their health insurance or Medicare will pay for a home aide or a nursing home stay.
Unfortunately, that’s not usually the case.
Medicare covers an average of 9.9% of long-term care services and private insurance only pays for 2.7%, compared to a whopping 52.3% of out-of-pocket expenses.
That means most people will have to look into paying for their long-term care themselves, by choosing the best long term care insurance providers.
From our perspective, GoldenCare is usually the best. But here are the top four overall:
- GoldenCare: has a wider variety of plans
- LTCRplus: has free legal support and objective advice
- CLTC Insurance Services: have clear and simple plan comparison
- LTC Financial Solutions: has an easy online interface
But what else do you need to know if you’re planning to use Medicare for your long term care?
Be Prepared For These Long Term Care Needs
The majority of long-term care services involve custodial care, which is just assistance with the so-called Activities of Daily Living (ADLs).
When you can’t do two or more of these activities, it may be time to consider long-term care.
This care can be provided at home or in a professional facility like a nursing home, an assisted living facility, or an adult day care center.
In other cases, in-home care is also an option.
You could also need long-term care if you suffer from a chronic medical condition like Parkinson’s disease, Alzheimer’s disease, or multiple sclerosis.
In that case, custodial care may not be enough and skilled nursing care might be required.
What Is Skilled Nursing Care?
With skilled nursing care, trained professionals–such as registered nurses, doctors, or therapists–provide medical care that could not be delivered by other caregivers, such as:
Skilled nursing care can also be given at home or in skilled nursing facilities.
What Does Medicare Cover?
In general, Medicare will not cover long-term care services for most beneficiaries.
Like we mentioned at the beginning, less than 10% of long-term care services are paid for by Medicare.
However, there are some circumstances in which beneficiaries can use Medicare to pay for long-term care.
According to the Medicare.gov website, Medicare WILL pay for long term care in these instances:
1. Care In A Long Term Care Hospital
Care in a long-term care hospital for patients with two or more serious conditions who may eventually improve and go home.
2. Care In A Skilled Nursing Facility
Skilled nursing care in a skilled nursing facility (SNF), which includes a semi-private room in the facility, meals, therapy, medications, and skilled nursing care itself.
The care must be provided in a skilled nursing facility; since nursing home care is usually custodial care, a stay in a nursing home is not covered by Medicare.
The patient must have a “qualifying hospital stay,” which is being admitted as an outpatient for a minimum of 3 days, to qualify.
Once the patient is discharged, they have 30 days to enter an SNF and be covered by Medicare.
This type of care is only covered by Medicare for 100 days. After day 21, the patient is responsible for paying a $167.50 daily coinsurance.
After day 100, the patient is responsible for all care costs.
3. Care In The Home
Eligible home health services, including skilled nursing services, home health aide care, and various types of therapy.
The patient must be homebound (unable to leave their house) to qualify.
A doctor must prescribe physical, speech, or occupational therapy, as well as “intermittent” skilled nursing care.
Medicare may also cover part of the cost of medical equipment like wheelchairs and hospital beds.
Some services that are not covered by Medicare include:
If the only type of care the patient needs is custodial care (help with ADLs), this is not covered by Medicare.
The patient must need additional care like the type described above.
If the home health services needed are eligible for Medicare, the patient pays nothing. As for durable medical equipment, the patient only pays 20% of the costs.
Hospice care, which focuses on making terminally ill patients comfortable instead of trying to cure the illness.
Hospice Care Services Include:
Respite care is also covered, which is given when the patient’s usual caregiver needs a break.
To qualify for Medicare coverage, a doctor must certify that the patient is not expected to live more than six months and the patient must accept that the care they will receive is only for ensuring their comfort.
Once the hospice benefit begins, treatment for curing the illness will not be covered by Medicare even if it was being covered before.
If the patient qualifies for Medicare coverage for hospice care, they will pay nothing.
For respite care, the patient may have to pay 5% of the cost. If the patient who receives hospice care lives at home or in a nursing home, room and board expenses aren’t covered by Medicare.
But if the patient needs to move to a facility for short-term inpatient care, the stay will be covered.
What Does This Mean?
The only type of long-term care Medicare covers is some home health services, which can be covered indefinitely by Medicare.
However, beneficiaries must meet certain requirements to qualify, and many home health services are not covered.
Skilled nursing care is capped at 100 days, hospice care is intended for terminally ill people who are not expected to live beyond six months, and patients in a long-term care hospital are expected to improve and go home eventually.
That means people who are counting on Medicare to pay their long-term care costs should make alternative plans and look elsewhere.
While you may qualify for Medicare coverage in the future, most people will not, so having a backup plan is wise.
How Do I Pay For Long Term Care If Medicare Won’t?
Long-term care isn’t cheap.
Genworth’s 2017 Cost of Care Survey found the median cost of a semi-private room in a nursing home is $7,148 a month.
The costs are lower for other types of care, like homemaker services, home health aide services, adult health care, and assisted living facilities, but they still add up to thousands of dollars a month.
Medicaid is one option for paying for long-term care. Medicaid is a federal program administered by your state which allows low-income people and people with disabilities to have access to healthcare.
Each state sets its own Medicaid requirements, but in most cases, there is a limit to how many assets and how much income you can have.
For many people, this means they have to “spend down” or reduce their assets in order to qualify for long-term care coverage. Often, when these patients die, their relatives find there isn’t an estate left over.
If you don’t qualify for Medicaid, then you will likely need to pay your long-term care expenses with out-of-pocket money and private insurance.
The report from the Department of Health and Human Services mentioned above says 55% of long-term care costs are paid with private funds.
Depending on your coverage, your private health insurance may cover some long-term care services, but the rest would have to be paid by you. That is why long-term care insurance is becoming so popular.
Long-term care insurance policies are solely intended to pay for long-term care services like nursing home care, assisted living facilities, and home health aides.
With this policy, you set a daily or monthly benefit limit—which is the maximum amount the insurer will cover for your long-term care services—and a benefit period—the maximum amount of time your services will be covered, which can range from months to years or may be unlimited.
Then, for as long as the benefit period is active, your long-term care services will be covered.
Even though Medicare may not cover the long-term care services you need in the future, there are still options you can explore to make sure you are well-taken care off during a long disability or in your old age.*While we make every effort to keep our site updated, please be aware that "timely" information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Huntley Wealth & Insurance Services and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser.