Does Medicare Cover Long-Term Care? Find Out Here

Americans pay more than $61 billion for long term care services. Long-term care can include a variety of services to meet your health and personal needs. It helps you live safely and independently when you need assistance with daily activities.

The most common type of long-term care helps with "activities of daily living." This type of personal care includes activities like bathing, dressing, and eating. Long-term care can also include services like transportation and adult day care.

As the cost of long term care continues to rise, you may wonder if Medicare covers long term care. This guide will tell you everything you need to know about Medicare and long term care so you can know what your options are.

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How Does Medicare Long-Term Care Coverage Work?

Medicare covers services that your healthcare provider determines are medically necessary. However, coverage for long-term care services under Medicare is very limited.

Few long-term care services are covered and the amount of time for which you can receive benefits is often short.

If your doctor decides that a covered service is necessary, the process is similar to other Medicare claims. First, you have to meet your deductible. Then you pay your share of the costs.

Using a healthcare provider who accepts the Medicare-approved payment amount can save you money. Your share of the costs may be less but you're responsible for the total cost of long term care services that Medicare doesn't cover.

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Medicare and Long-Term Care Eligibility

In order to receive long-term care benefits from Medicare you must meet certain criteria. Eligibility will vary depending on your situation.

Eligibility for Medicare

In general, Medicare coverage is available if you are:

  • Age 65 or older
  • Disabled
  • Suffering from end-stage renal disease or ALS (Lou Gehrig's disease)

Most people get Medicare Part A coverage at no cost but there is a chance you may have to pay a premium depending on your situation. If you qualify for Part A with no premium, you don't need to file a Medicare application. You typically get Part A automatically when you turn 65 as long as you started receiving Social Security at least four months before you turn 65.

If you do need to pay a premium for Part A, you have to file an application with the Social Security Administration and will need to have both Part A and Part B.

The eligibility requirements for Part B are different for people who don't qualify for premium-free Part A. In addition to being at least 65 years old, you must be:

  • A U.S. citizen, or
  • A lawful permanent resident with at least five years of residency before applying for Medicare

Medicare Part C, also known as Medicare Advantage, takes the place of Parts A and B and includes Part D which is for prescription drug coverage. To use Medicare Part C, you must live in the service area of the Medicare Advantage plan you want.

Medicare Enrollment

Medicare enrollment happens during specific enrollment periods each year. You have an initial enrollment period that starts three months before you turn 65.

Open enrollment for both parts A and B runs from October 15 through December 7. The Medicare Advantage open enrollment period is from January 1 through March 31.

Eligibility for Long Term Care Services

Once you have Medicare, your healthcare provider will evaluate if you need long term care services. You can check the Medicare coverage for specific items or services on the Medicare website. The "Medicare & You" handbook also has this information.

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Which Long-Term Care Services Can Medicare Cover?

Medicare covers three types of long term care services: in-home care, nursing home care, and hospice care. These services are included in Medicare coverage because they require skilled care.

In-Home Care

As the name suggests, in-home care refers to services that you receive at home. Your doctor may refer you for home healthcare after you've been in the hospital or a skilled nursing facility. Your doctor must classify you as homebound to qualify for home care.

In-home care is less expensive and more convenient than staying in a care facility. You can receive services such as:

  • Part-time skilled nursing care
  • Physical therapy
  • Occupational therapy
  • Speech-language pathology services
  • Durable medical equipment, like wheelchairs, walkers, and home hospital beds
  • Medical supplies

The home health agency coordinating your services must be certified by Medicare. The services must be temporary. Home care under Medicare isn't a true long term solution.

Nursing Home Care

Medicare will cover all or part of the cost of a short stay in a skilled nursing facility. To qualify for nursing home care, you must have been an inpatient in a hospital for at least three consecutive days. Your doctor must certify that you need daily inpatient care.

Unlike in-home care, nursing home care can include non-medical services. Medicare coverage for nursing homes includes services such as:

  • Skilled nursing care
  • Meals
  • Bathing
  • Dressing
  • Physical therapy
  • Occupational therapy
  • Speech-language pathology services
  • Medications
  • Medical supplies and equipment
  • Ambulance transportation

Medicare only covers care in a skilled nursing facility for a limited amount of time. You'll be responsible for all charges after 100 days of care.

Hospice Care

Hospice care is specialized care for people who are terminally ill. It helps people live as fully and as comfortably as possible through the last phases of a life-limiting illness.

To qualify for hospice coverage with Medicare, your doctor must certify that you have a life expectancy of six months or less. You'll need to sign a statement choosing hospice care instead of other treatments that might also be covered by Medicare.

Accepting hospice care means accepting palliative (comfort) care instead of care intended to cure an illness. Covered services include:

  • Doctors' and nursing services
  • Medical equipment for pain relief and symptom management
  • Medical supplies
  • Medication for pain management
  • Spiritual and grief counseling for you and your family
  • Respite care, to let your primary caregiver rest
  • Homemaker services, like shopping, cleaning, and laundry

You usually receive hospice care in your home or the facility where you live. You can also receive hospice care in an inpatient facility. Medicare won't cover the cost of room and board under hospice care.

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Which Part of Medicare Covers Long-Term Care?

Medicare Part A and Part B cover long term care. Part A is hospital insurance including inpatient care in hospitals, skilled nursing facility care and hospice.. Part B, the medical insurance covers services rendered through outpatient care by doctors or other healthcare providers. If prescription medications are part of your long term care plan, they may fall under Medicare Part D.

You can look at your Part A and Part B benefits to find out which specific services are covered. Coverage for some services depends on where you live. A list of tests, items, and services that Medicare covers in all locations is available on the Medicare website.

If you have a Medicare Advantage plan (Medicare Part C), your benefits will depend on your plan. You can check the details of your plan to determine your eligibility.

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The Limits of Medicare for Long-Term Care

Medicare has strict limits on long term care coverage. They cap the amount of money they will pay and the amount of time they will cover services is also limited.

Financial Limits

The cost of long term coverage depends on the type of services you need and the amount you may have to pay depends on factors such as:

  • Coinsurance cost-sharing percentages
  • How much your healthcare provider charges
  • The type of facility and its location

Your healthcare provider can help you determine your share of the cost of services. Medicare doesn't have a yearly limit on what you pay out-of-pocket. Having supplemental coverage may also help to limit your costs.

The Cost of In-Home Care under Medicare

You won't have out-of-pocket costs for in-home care services that Medicare covers. You'll pay 20% of the Medicare-approved amount for qualifying medical equipment after you meet your Part B deductible.

Your home health agency will tell you how much Medicare will pay for services before you start receiving care. The agency should tell you if Medicare doesn't cover any services they plan to provide and also tell you how much you would need to pay.

The Cost of Nursing Home Care under Medicare

Medicare will fully cover the cost of care in a skilled nursing facility for the first 20 days. From day 21 through day 100, you'll need to pay up to $200 per day. After 100 days, you're responsible for the total cost of care.

These limits apply to each benefit period. A benefit period starts the day you're admitted as an inpatient at a hospital or skilled nursing facility. The benefit period ends when you haven't gotten inpatient care for 60 days in a row.

You need to pay the deductible for an inpatient hospital stay for each benefit period.

The Cost of Hospice Care under Medicare

Medicare fully covers hospice care. However, you may have to pay 5% of the Medicare-approved amount if you choose to use inpatient respite care. If you live in a facility like a nursing home and choose to get hospice care, you may have to pay for room and board.

You'll have a copayment of $5 for outpatient prescriptions to manage pain and symptoms. In rare cases, Medicare doesn't cover a hospice prescription. Your hospice provider can contact your plan to see if Part D will cover it.

Time Limits

Medicare covers home healthcare, care in a skilled nursing facility, and hospice for a limited amount of time.

Medicare in-home healthcare is for temporary treatment. It must be for less than seven days a week and less than eight hours a day. Medicare may cover up to 21 days of care.

Medicare only covers nursing home care on a short-term basis. Full coverage ends after 20 days.

The time limit for hospice care is somewhat more flexible. Eligibility for hospice care depends on your doctor certifying that your life expectancy is six months or less. However, your doctor can recertify that you're still terminally ill if you need care for longer than six months.

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5 Alternatives to Medicare

You have several alternatives to long-term care for Medicare. These options can help you pay for services that Medicare doesn't cover.

1. Medicaid

Medicaid is a state and federal program that provides health insurance for people with a very limited income. It covers medical and custodial care including:

  • Nursing homes, including custodial care
  • Long-term care services provided at home, including visiting nurses and assistance with personal care
  • In-home services such as personal care, laundry and cleaning support

The eligibility for long-term care varies greatly by state and can be strict.

When it comes to medical care, generally you need to require ongoing nursing care, if you are impaired by Alzheimer or dementia, or unable to meet activities of daily living requirements.

In addition to medical requirements, there are also eligibility requirements based on your income and assets.

States typically use two ways to determine eligibility based on income. Some states use “Income cap” rates which means there is a hard income limit, such as no more than 3 times your social security and some states may use “non-income caps” which allow those with income over the limit to still qualify if they have high medical bills.

The amount of assets you have also play a role when it comes to eligibility. In most states, there is an asset limit, for example, an individual cannot have more than $2,000 in assets. There are assets that are considered exempt including primary home, vehicle and jewelry just to name a few.

2. Long-Term Care Insurance

Many insurance companies sell long-term care insurance (LTC). It covers services that aren't included in Medicare.

There are three main types of long-term care insurance — traditional, hybrid, and life insurance with a long-term care rider.

Traditional LTC policies provide only coverage for LTC costs, while hybrid plans offer LTC coverage and life insurance. Hybrid LTC plans are more expensive than traditional long-term care policies because it also includes a payout to beneficiaries when you die.

Life insurance with a long-term care rider lets you access some of the death benefit while you are still alive for your long-term care needs.

The best policy really depends on your individual circumstances and coverage goals.

No matter what type of policy you choose, it's important to remember that the younger and healthier you are when you purchase your long-term care insurance, the more affordable it will be. Premiums are higher for older enrollees to the probability of already having pre-existing health conditions.

3. Veterans Benefits

The U.S. Department of Veterans Affairs will cover some of the costs of long term care for people who qualify. In addition to being a vet, here is some of the criteria you or your spouse need to meet to get long-term care service:

  • Must have served at least 90 days on active duty with at least one day during one of the specified wars and be honorably discharged
  • Can not have assets that exceeds $80,000 (excluding home and car)
  • Must need assistance with bathing, dressing or eating

You can find more information at your local VA health center or on the VA website.

4. Personal Savings

Using your savings to pay for long-term care can be an option. However, people with limited savings should proceed with caution.

The cost of in-home care, assisted living, or a nursing home varies depending on location, but it has become increasingly expensive. With no insurance, these costs could add up quickly, causing detrimental financial hardship and undoing a lifetime of savings.

5. Reverse Mortgages

A reverse mortgage lets you borrow money using your home as collateral. Reverse mortgages are available to homeowners who are at least 62 years old. You can choose to get the money in several ways, including:

  • Lump sum
  • Fixed monthly payments
  • Line of credit

The money you receive is usually tax free and you can use the money from a reverse mortgage for many purposes, including to pay for long term care.

The downside is there are fees involved, they typically have variable interest rates, and it lowers your equity in the home. It’s important to understand what the impacts are before you make this decision.

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What Should I Do?

Unfortunately, there is no easy answer when it comes to long-term protection. Medicare is limited at best and you won’t get the full protection you may need.

The one option you have the most control over is buying your own long-term care policy. You can get protection that works best for your budget and have peace-of-mind knowing your future care costs will be covered.

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Our content is created for educational purposes only. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Everdays encourages individuals to seek advice from their own investment or tax advisor or legal counsel.

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