Most Mistakenly Think Medicare Will Cover LTC Needs

Many people think Medicare pays for long-term health care even though it will pay little or nothing. Families face financial strain paying for professional care. Despite being untrained and unprepared for this demanding job, some family members must become caregivers. There is a way to plan.

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Most Mistakenly Think Medicare Will Cover LTC Needs
7 Min Read September 29th, 2016 Updated:February 16th, 2022

A recent survey, '2016 Long-Term Care in America', conducted by the Associated Press-NORC Center for Public Affairs Research at the University of Chicago, shows 38% of adults age 40+ believe Medicare will pay for their future long-term health needs. 

People are under this impression even though traditional health insurance and Medicare (health insurance for those 65 and older) do not cover most long-term care (LTC) services and supports. Unfortunately, most families discover this during a crisis with an older family member. Medicare has never been a way to pay for long-term health care.

Medicare doesn't cover long-term custodial care, which is the type of care most people will require. People require long-term health care services due to illnesses, accidents, or the impact of aging. About half of us will need long-term care if we make it to age 65. Most of this care is custodial in nature, so Medicare and health insurance will not pay. The responsibility for paying for care - or providing the care - is left to the American family.

Medicaid Pays for Long-Term Care But You Must Be Poor

According to the Kaiser Commission on Medicaid data, only 2 out of 10 older adults anticipate using Medicaid to finance their LTC needs even though Medicaid ranks as the largest public payer of long-term care services.

Medicaid is the nation's medical welfare program and requires little or no income and assets to qualify. Medicaid is not an answer for long-term care unless you have little savings. The quality of care is also questionable with Medicaid because of the lower reimbursement for services from the government. 

There is an enormous financial burden placed on American families because of long-term care expenses. The cost of long-term health care services is growing rapidly, making this an even bigger financial strain in the decades ahead.

“Medicare and Social Security were not built to cover Long-Term Care costs, leaving American families unprotected, and as this survey shows, unaware of this fact.”

 Bruce Chernof, M.D., president, and CEO of the SCAN Foundation,

Most People Happy with Their Long-Term Care Insurance

Long-Term Care Insurance, including Partnership policies available in most states, is an affordable solution to pay for future long-term health care needs. Many people now look at Long-Term Care Insurance as part of their retirement planning. 

The survey shows that most of those with LTC insurance (69%) are very satisfied or somewhat satisfied with a policy's cost. Among those who do not have LTC insurance, just 23% say they have looked into purchasing a plan. This low number is due to several reasons, including the denial that they will ever need care, the erroneous impression that long-term care will be paid for by the government, and the uninformed belief that Long-Term Care Insurance is very expensive.

Additional Asset Protection Possible

Partnership Long-Term Care Insurance provides additional dollar-for-dollar asset protection or what is referred to as 'asset disregard.' If a person spends down all the money in their LTC policy, they can legally shelter part of their estate based on the value of the benefits paid out.

Thirty-six percent of the survey respondents report they are very or extremely confident they will have the resources to pay for long-term care. At the same time, another 36% say they are somewhat confident, and 24% are not too confident or not at all confident that they could pay for long-term health care.

Genworth Financial, a leading insurance company, does an annual research study on the cost of LTC services and the public perception of those costs. The 2016 study showed most Americans underestimate the cost of long-term care at-home care by nearly 50%.

 “Americans’ Estimates of Long-Term Care Costs Are Wildly Off, said, “Nearly a third of Americans (30%) believe home health care expenses are under $417 a month, but according to Genworth’s number-crunching, the national median rate is about nine times that $3,861 per month for an in-home aide or $3,813 per month for homemaker care (that’s hiring someone to handle household tasks such as cooking, cleaning, and running errands). Genworth assumes 44 hours a week of home care in its calculations.”

Richard Eisenberg 

Valerie VanBooven, RN BSN, Editor In Chief Of, says the study also determined that women are more likely to be the ones who underestimate the cost of in-home care, even though they comprise 80 percent of the care providers or family members who find the right level of care and support for a loved one.

“If people underestimate the cost of long-term home care, they are more likely to be unprepared for it in the event that they or someone else in their family requires significant long-term care in the future,”

Valerie VanBooven, RN BSN, Editor In Chief Of

Other points the AP/ NORC survey showed:

  • 77% of respondents would prefer to receive care in their own homes.
  • 67% indicate they would want their loved ones to receive LTC services in a home setting.
  • One-third of the respondents have not made any plans to pay for their LTC services.

Just under half (46%) of survey participants anticipate that it is at least somewhat likely that an aging family member or close friend will need ongoing living assistance in the next five years. Those who have long-term care experience are more likely to anticipate that their loved one will need assistance, as are those who are younger than age 65. 

Those who say their loved one will need ongoing living assistance, 1 in 3 say they will be at least partially responsible for providing that care, and half say that someone else will be responsible for delivering that care.

Family Caregivers are Untrained and Unprepared

However, these prospective caregivers are not confident that they are prepared to provide this care. Just 30% of those who will be responsible say they feel very or extremely prepared to provide this ongoing care to their aging family member or friend, 47% say they are somewhat prepared, and 20% say they are not very or not at all prepared.

The fact is most family caregivers are untrained and unprepared for a job that is very demanding physically and emotionally. Plus, most family caregivers must juggle their career, family, and other responsibilities with their job as a caregiver.

Meanwhile, those who have Long-Term Care Insurance are receiving benefits from those plans helping them receive quality care, including in-home care. Long-Term Care Insurance companies paid over $12.3 Billion in claim benefits in 2021, according to the American Association for Long-Term Care Insurance (AALTCI), a national consumer advocacy group.

“Americans are living longer and often the result is a need for Long-Term Care,”

 Jesse Slome, executive director of the AALTCI. 

“The individuals who own LTC insurance policies benefit from the protection as do their families and loved ones.”

Without insurance to pay the cost, Slome acknowledges the caregiving responsibility often falls on elderly spouses or adult children of aging parents.

“LTC insurance provides choice and control while protecting your retirement plans and lifestyle. It allows loved ones to care about you rather than being forced to care for you.”

Jesse Slome 

Prepare Before You Retire

As more families understand that the government is not the solution for their future long-term health care, they seek options to address the costs and burdens of declining health and aging.

The cost of long-term care is expected to grow in the decades ahead. The LTC NEWS Cost of Care Calculator shows the average cost of a nursing home is already over $100,000 a year nationwide. 

In-home care, adult day care centers, assisted living, and memory care is not as expensive, but they are all financially draining on a family's budget. These costs do vary depending on where you live. You can use the calculator to see the current and future cost of long-term care where you live - Cost of Care Calculator - Choose Your State | LTC News.

Long-Term Care Insurance is an affordable way to address the consequences of getting older and needing help with everyday living activities or supervision due to dementia.

When you own a policy, you own a solution that gives you access to your choice of quality care options, including care in your home. Not only do you secure quality care for yourself, but you also get to safeguard your savings and give loved ones the time to be family instead of being caregivers.

Most people obtain coverage in their 50s. Premiums can vary over 100% between insurance companies. Be sure to seek the help of an experienced Long-Term Care Insurance specialist who will navigate the many options from all the top companies. Remember, every company has its own underwriting criteria and pricing, so a specialist will match you with the company that provides you with the most benefits at the lowest cost.

Don't delay; your health can change at any time, and you must have reasonably good health to obtain coverage.

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About the Author

An LTC News author focusing on long-term care and aging.

LTC News Contributor James Kelly

James Kelly

Contributor since August 21st, 2017

Editor's Note

The problem of long-term care is both a cash flow issue and a family issue. Preparing your family and finances for the financial costs and burdens associated with long-term health care is key to enjoying a successful future retirement.

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You can find many tools and resources on LTC NEWS to assist you in your research for a planning solution or help your family find the appropriate care for a loved one at the time of crisis. 

To help you plan the costs and burdens of changing health and aging, LTC NEWS has put in place several resources, including:

Find all the resources on LTC NEWS - Resources for Long-Term Care Planning | LTC News.

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Insurance rates are regulated, so no insurance agent, agency, or financial advisor can give you special deals. However, premiums vary over 100% between insurance companies for the same coverage.

Experts suggest using a qualified Long-Term Care Insurance specialist to help you navigate the many options available to you and your family.

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Benefits of Reverse Mortgages 

Today's reverse mortgages for those aged 62 and older could be an ideal resource to fund a Long-Term Care Insurance policy OR even provide money to pay for care if you, or a loved one, already needs help and assistance.  

Some people have much of their savings invested in their homes. With today's reverse mortgages, you can find ways to fund care solutions, care itself, even help with cash flow during your retirement. 

Learn more by asking questions to an expert. LTC NEWS columnist and host of the TV Show "62 Who Knew" will answer your questions regarding caregiving, aging, health, retirement planning, long-term care, and reverse mortgages. 

- Just "Ask Mike." - Reverse Mortgages | LTC News.

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