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Does Medicare cover the cost of long-term care at your home or in a nursing home?

By: Kimberly Lankford

Rarely. Medicare covers many of your medical expenses after you turn 65, but it leaves a potentially large gap: Medicare provides very limited coverage for long-term care costs. If you need help with custodial care — the non-medical help with activities of daily living, such as bathing and dressing — you may have to pay the bills yourself. And that care can be very expensive: The median cost of a private room in a nursing home is more than $100,000 per year, while the median cost in an assisted-living facility is $48,000, and 44 hours per week of a home health aide is more than $50,000, according to Genworth’s 2018 Cost of Care study.

What Medicare does cover. The Medicare coverage rules for long-term care are complicated. Medicare may cover some custodial care if you also need medical care and meet certain requirements, but it usually doesn’t cover custodial care if that is the only care you need.

Medicare can cover medically necessary care in a Medicare-certified skilled-nursing facility, but only to provide continuing treatment after you’ve had a three-day hospital stay. Your doctor must certify that you need skilled nursing care or physical, occupational or speech therapy. If you qualify for Medicare coverage, you’ll have a $0 copay for the first 20 days, then will have to pay $170.50 coinsurance for days 21 to 100, and the full cost for days 101 and beyond. (A Medicare supplement insurance policy may cover the coinsurance costs.) For more information see the Skilled Nursing Facility care factsheet at Medicare.gov.

But you can’t assume you automatically qualify for Medicare coverage if you move to a rehab facility after staying in the hospital for at least three days. Hospitals sometimes keep patients overnight — or even for a few days — under “observation” status rather than admitting them, which doesn’t count towards the three-day requirement. Congress and the Centers for Medicare and Medicaid Services have been talking about closing this loophole (and a lawsuit is addressing this issue, too), but until then be sure to ask the hospital whether you’ve been admitted or are just under observation status — even if you’re spending the night.

Medicare may also cover some home care for patients whose doctors certify that they need medically necessary skilled-nursing care or physical or occupational therapy to help with recovery from an illness or injury. Limited custodial care may be provided during those visits if you also need skilled-nursing care, but not if you only need help with activities of daily living. The care must be provided by a Medicare-certified home health agency, under a care plan established by your doctor. See Medicare.gov’s What Is Home Health Care for more information.

Where to get help with the Medicare rules. Several resources can help you decipher Medicare’s complex rules for long-term care or appeal a coverage denial, including the Medicare Rights Center and the Center for Medicare Advocacy. Each state also has a State Health Insurance Assistance Program (SHIP) that provides Medicare counseling — find your state’s contacts at the SHIP National Network.

How to cover the costs of long-term care. Because of the limited coverage by Medicare, it’s essential to factor the potential cost of long-term care into your retirement plans. Consider how much the care could cost in your area for the type of facility you’re considering, and whether you could pay all or part of the cost from your savings. There are several types of insurance that can help you fill in the gap, such as a standalone long-term care insurance policy or a hybrid long-term-care/life insurance policy.

See LongTermCare.gov for more information about ways to cover the cost of long-term care.

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