Unless you have creditable coverage from an employer, your primary health insurance will be Medicare whenever you are 65 years old. According to Administration on Aging, someone turning 65 almost has a 70% chance of needing some type of long-term care service and support in their remaining years. This source also states about 35% of seniors are expected to enter a nursing home once in their lifetime. With these statistics, you would assume Medicare covers long-term care for its beneficiaries. So, will Medicare cover long-term care? Let’s discuss below.
What does Medicare cover?
First, let’s discuss the two different parts of Medicare: Part A and Part B. Part A covers inpatient care, such as a semi-private room and meals as an inpatient in the hospital. Medicare Part A also covers post-hospital care, such as short-term post-hospital home care, skilled nursing, hospice, and physical therapy whenever deemed medically necessary.
Medicare Part B provides coverage for numerous outpatient services. Part B covers ambulance rides, home health care, doctor’s visits, and chiropractic care. You can also get Part B to cover some services you receive inside the hospital, such as radiation, chemotherapy, surgeries, and dialysis for kidney failure.
You may notice none of these services consist of long-term care.
What is long-term care?
Long-term care is not necessarily considered medical care, as long-term care is primarily for services that help personal care needs. Long-term care is predominantly custodial care, such as help with dressing, bathing, using the bathroom, and other daily activities.
If one requires long-term care, they will need a caretaker to help with these activities. There is a range of settings that provide help with long-term care. For example, nursing homes, adult daycares, and assisted living facilities provide long-term care services. So, since this type of care doesn’t typically occur at an inpatient or outpatient setting, will Medicare cover it?
Does Medicare cover long-term care?
If long-term care is the only care you are needing, Medicare will not provide coverage. Original Medicare only covers short-term care, never long-term. Many seniors believe Medicare does cover custodial care, and this confusion likely stems from Medicare Part A covering skilled nursing and home health care. However, long-term care is very different from these types of services.
A beneficiary is responsible for payment on all non-covered services, which includes long-term care. However, you would still need to enroll in Medicare to have coverage for inpatient and outpatient services.
Although Medicare does not cover custodial care, there are other alternatives for long-term care coverage.
How to pay for long-term care
Health Savings Account
A Health Savings Account (HSA) is a tax-free account where you can save money solely for medical expenses. To qualify for an HSA, you must be enrolled in a high-deductible health plan, often found through an employer. You cannot be enrolled in any part of Medicare while contributing to an HSA, or the IRS will penalize you.
You can use your HSA funds for any medical expenses, including long-term care services. So, contributing to one of these accounts is an excellent way to set money aside for any long-term care needed in the future.
Long-term care insurance
There are standalone long-term care insurance plans you can purchase. Long-term care insurance can help aid many long-term care services, such as nursing homes, skilled and non-skilled facilities.
There is a wide range of long-term care insurance plans. For example, some plans may cover adult day care, durable medical equipment, and assisted living, while another plan may not cover any of those services. You will want to ensure you purchase an insurance plan with the benefits you are interested in and protects pre-existing conditions.
Medicare covers a variety of inpatient and outpatient services but will never cover long-term care. You will still want to enroll in Medicare for that coverage and to avoid late enrollment penalties. There are options for getting long-term care covered, such as savings from a Health Savings Account or purchasing long-term care insurance.