Does Medicare Pay for Long-Term Care?
January 12, 2015 | Home and Family
Seventy percent of Americans who reach age 65 will at some point need long-term care, whether at home or in an assisted care or nursing home facility, according to the U.S. Department of Health and Human Services. Yet most people underestimate the cost of that care.
A March 2014 National Health Policy Forum report, National Spending for Long-Term Services and Supports, found that the average cost of nursing home care in 2012 was $81,030 per year for a semi-private room and $90,520 for a private one. If you’re thinking that Medicare will pick up the tab, that typically isn’t the case. The following, which will help you better understand which long-term care services Medicare does—and doesn’t—cover, is based upon two U.S. Department of Health and Human Services publications, Medicare & You 2015 and Medicare, Medicaid & More.
Understanding the Dollars and Cents of Medicare
If you’re staying at home, Medicare pays only for skilled care visits (in other words, services performed by a medical professional) if you’re recovering from an illness, condition or injury. Your doctor has to certify that these services are necessary, and you need to be housebound in order to receive them. Custodial care, such as bathing, feeding and getting in and out of bed, is covered only while you also need skilled care.
If you receive long-term care services in a skilled nursing facility, Medicare will cover up to 100 days of care but only after a hospital stay of at least three days and only if you need daily medical attention, such as wound care after surgery or physical therapy after hip replacement. These benefits will continue so long as you need skilled services and care. It’s important to also note that even if you qualify for 100 days of coverage, that doesn’t mean Medicare pays for it all. Rather, Medicare pays 100 percent of the cost of the first 20 days; after that, you are responsible for a copayment of $157.50 (in 2015) per day. Unless you have Medicare supplemental insurance, a 100-day stay could end up costing you more than $12,000. And if you need to stay longer, after 100 days you’ll have to pay the entire bill on your own.
Some of the misunderstanding about Medicare likely comes from the fact that Medicare helps cover certain services at home or in a skilled nursing facility, but only if those services are medically necessary (like changing sterile dressings). However, most people with disabling injuries and chronic conditions require long-term custodial care, which Medicare does not cover. Custodial care refers to ongoing assistance with eating, dressing, bathing, walking and other everyday living activities, whether at home or in a skilled nursing facility. Adding to the confusion is the fact that even though skilled nursing care and custodial care are distinctly different, the same types of providers offer both categories of service.
Medicare, Medicaid: What’s the Difference?
Another reason some people believe that Medicare covers long-term care is that they mistake Medicare for Medicaid.
Medicaid is a joint federal and state health insurance program designed to cover individuals who have low income and few assets. Like Medicare, Medicaid covers hospitalization, doctors’ visits and other health care costs, including medically necessary long-term care services. Unlike Medicare, however, Medicaid also pays for long-term custodial care services provided in nursing facilities that are licensed and certified by the state survey agency as a Medicaid Nursing Facility. Because Medicaid is an impoverishment program, you need to meet income and asset requirements to qualify.
Taking Charge of Your Care
The cost of long-term care can place a burden on you and your loved ones, especially in the absence of a sound long-term care strategy. The need for extended health care can quickly drain away assets meant for retirement and other goals and exact a significant emotional and physical toll on loved ones and friends.
For these and other reasons, a growing number of people are including long-term care planning in their overall financial plan. Planning for long-term care expenses can help mitigate the potential cost of getting the care you may someday need, helping to preserve your savings for other important needs. Most important, it provides you and your loved ones the added security that comes from knowing you’ll be able to get the care you need where and when you need it, whether that’s at home, in an assisted care facility or at a skilled nursing facility.