Does Medicare cover long-term care costs?

The American population continues to age and, in turn, demand and costs long-term care services they are shooting According to LongTermCare.gov, someone turning 65 today has almost a 70% chance of needing some form of long-term care in their remaining years, and that care comes at a high price today.

For example, if you need the services of a nursing home, the average cost of a semi-private room a nursing home is over $104,000 per year. The price of a private room in a nursing home is even higher, with an average price of more than $117,000 per year. And, even less intensive care, such as homemaker services, can be expensive, with that option currently at more than $63,000 a year. With costs like these, it’s no wonder many seniors are worried the affordability of long-term care costs.

That said, many seniors or their family members can count on Medicare to help cover them the cost of long-term care when the need arises. The reality is, however, that Medicare coverage can be limited, especially when it comes to long-term care. So understanding exactly what is and isn’t covered is crucial to proper planning and making sure you can afford the care you need as you age.

Find out how the right long-term care insurance policy can help you today.

Does Medicare cover long-term care costs?

Medicare generally does not cover the costs of long-term care services that help with activities of daily living for an extended period of time. This includes non-medical care costs for things like bathing, dressing, eating, getting in and out of bed, and using the bathroom.

Under original Medicare Part A (hospital insurance) and Part B (health insurance), you’ll usually pay 100% out-of-pocket for most long-term care services that are considered custodial rather than specialized medical care. Medicare Supplement Insurance Policies generally (Medigap plans) also do not provide coverage for long-term care.

According to Medicare.gov, there are only a few limited circumstances in which Medicare can temporarily cover some types of long-term care costs, including:

• Up to 100 days of skilled medical care for illness through Part A, but only after a qualifying hospital stay of 3 days, and only for continuing qualifying medical care in lieu of custodial care
• Limited coverage through Part A for hospital care for terminally ill patients
• Some coverage through Part B for specific home health care services, such as intermittent skilled nursing care, physical therapy, and occupational therapy, when deemed medically necessary

So while traditional Medicare plans help cover medical costs for things like doctor visits, preventive care, hospital stays, lab tests, and surgeries, they generally leave a significant gap when it comes to long-term custody. As a result, many seniors deplete their savings and personal assets paying out-of-pocket for long-term care before finally qualifying for Medicaid to foot the bill.

Explore your best long-term care insurance options online now.

Other options for covering long-term care costs

Because Medicare offers little or no coverage for continuing long-term care, most seniors must make other arrangements. Other options to consider include:

Long-term care insurance

Long-term care insurance policies they are usually a smart option to consider because they help cover the costs of nursing homes, assisted living facilities, home care and other long-term care services. The premiums for these policies are based on age, health status and the amount of coverage selected.

If you want to take advantage of what long-term care insurance offers, however, it is best to do so request coverage when they are relatively young and healthy to get lower rates. After all, premiums can increase over time and getting your application approved can be more difficult as you get older and face more health problems.

Medicaid (if you qualify)

Medicaid, a joint federal-state program, can help pay for certain health services for those with limited income and assets. There are strict requirements to qualify, but once qualifying financial criteria are met, Medicaid may cover nursing home care and some home- and community-based long-term care services. However, you may have to “spend down” your assets paying for care before you qualify.

A life insurance policy

Some whole life insurance policies allow you to receive a portion of the death benefit early as an accelerated benefit, which can be used to cover long-term care costs. others hybrid products combine a life insurance benefit with a long term care rider. Both options allow you to access funds for care without leaving some death benefits to your heirs.

Savings and personal income

Self-funded long-term care from retirement accounts, social security, home equity or other types of funds can work if you have significant assets. However, paying $100,000 or more out of pocket each year for things like nursing home care can quickly deplete your intended savings for other expenses and legacies.

A reverse mortgage

For owners 62 and older, reverse mortgages they allow you to access a portion of your home equity to cover long-term care expenses and other retirement expenses without having to make monthly mortgage payments. However, the loan balance grows over time, and eventually the loan must be repaid to the lender when you leave home or die.

A health savings account

If you’re enrolled in an eligible high-deductible health plan, you can contribute pre-tax dollars to a health savings account (HSA). Money contributed to an HSA is tax-free, grows tax-deferred, and can be withdrawn tax-free to pay qualified long-term care premiums and out-of-pocket expenses.

The bottom line

With long-term care costs continuing their upward trajectory, being prepared is essential to maintaining your independence and ensuring access to quality care as you age. Because Medicare leaves such a large gap, considering options like long-term care insurance, Medicaid eligibility planning, or hybrid insurance products can provide crucial protection and peace of mind. Just make sure you fully understand what you’re getting into before choosing a route so you can make the most informed decision for your unique needs.