Does Health Insurance, Medicare, or Medicaid Pay for Long-Term Care?

There is a common misconception that health insurance, including Medicare, covers the cost of long-term care. But the truth is: these plans cover medical treatment, not ongoing personal or custodial care.

As millions of aging Americans discover every year, this misunderstanding can wipe out retirement savings and create tremendous stress for families.

According to the U.S. Department of Health and Human Services, 56% of Americans over 65 will require long-term care that meets the federal definition. This means needing help with two or more activities of daily living or supervision due to cognitive impairment.

Most traditional health insurance programs do not cover long-term care services or support. Medicare does not pay for long-term care services either.  

These health insurance programs typically cover only a limited amount of skilled nursing care services, excluding custodial care, such as assistance with activities of daily living. 

In this article, we'll explain what is and isn't covered by health insurance, Medicare, and Medicaid so you can plan for long-term care accordingly. We'll also explore Long-Term Care Insurance coverage options and how planning for long-term care with the proper insurance can help protect your income, assets, and estate from rising care costs.

Does Health Insurance, Medicare, or Medicaid Cover Long-Term Care?

The short answer is no, health insurance, Medicare, and Medicaid do not offer full coverage for long-term care services. However, the type of coverage varies greatly depending on the program.

Let’s take a closer look.

Does health insurance cover long-term care? No. 

What about Medicare, a program that provides health coverage for individuals aged 65 and older. Does Medicare cover long-term care? No. 

Medicaid, a program that serves low-income or disabled individuals, is a little different. Does Medicaid cover long-term care? Yes, but with some caveats. 

Medicaid coverage for services like assisted living or home care is often limited. Recipients may also need to repay care costs or give up assets and income due to Medicaid’s spend-down requirements.

In this article, we’ll outline what each type of insurance does and does not cover and explain how Long-Term Care Insurance can help you manage the rising costs of long-term care.

To simplify things, here’s a table that compares different insurance types and what services they cover.  

Why Health Insurance and Medicare Don’t Cover Long-Term Care (Custodial vs. Skilled Care Explained)

You may be wondering, why doesn’t health insurance cover long-term care? It comes down to one key distinction: custodial care vs skilled nursing care. 

Most long-term care is custodial in nature. Custodial care can be separated into two categories: help with activities of daily living or supervision due to cognitive decline:

• Daily living activities can include help with eating, bathing, dressing, toileting, transferring, and continence. 

• Supervision due to cognitive decline might be necessary for someone with dementia who is prone to wandering or needs help remembering medications or meals. 

Traditional health insurance plans, Medicare, and Medicare Supplements do not cover custodial care. Instead, these health insurance plans cover skilled nursing care. 

Skilled nursing care is provided by a trained medical professional and usually focuses on a skilled medical task such as IV treatment, wound care, or recovery after surgery. 

A majority of long-term care involves custodial care, not skilled care. This is why Medicare and many health insurance plans do not cover long-term care.  

Does Health Insurance Cover Long-Term Care?

Traditional health insurance plans, such as those provided by your employer, do not cover the cost of long-term care. Health insurance does not cover assisted living facilities, nursing homes, memory care facilities, or other long-term care facilities or services.

Instead, health insurance policies are intended for medical care. 

Health insurance does cover skilled nursing care, which can be closely related to long-term care. Skilled care includes services such as wound care, IV therapy, or rehabilitative services. However, coverage and deductibles can vary widely based on your plans. 

Any custodial care, such as help with daily living activities or a need for a nursing home, will not be covered under health insurance. 

Does Medicare Pay for Long-Term Care or Nursing Homes?

Like traditional health insurance, Medicare does not pay for long-term care. Medicare does not cover custodial care or care provided in a long-term care setting, such as a nursing home, memory care facility, or an assisted living facility. 

Medicare Part A covers qualified skilled care provided in a skilled nursing facility (SNF) or inpatient hospital care. To qualify, you must:

• Have a qualifying hospital stay (3-day inpatient stay).

• Have days left within your benefit period.

• Be admitted into an SNF within 30 days of your hospital stay.

• Need SNF care for the same reason as your hospital stay.

• Have your doctor certify that you require care.

Medicare completely covers the first 20 days of care. From day 21 to 100, you may have a daily copay unless you have a Medicare supplement (Medigap) to cover the copay cost. After day 100, you are responsible for the entire cost of skilled nursing care.

However, skilled care does not include any custodial care needs, such as help with daily activities of living or room and board in a long-term care facility.  

Does Medicare Supplement Insurance (Medigap) Cover Long-Term Care?

Medicare Supplement Insurance, also known as Medigap, does not cover any custodial care or long-term care services.

Medigap is an add-on private insurance plan for individuals with Original Medicare (Medicare Part A and Medicare Part B), designed to help cover out-of-pocket costs.

Medicare Supplements can cover copays for skilled nursing care provided in a skilled nursing facility, but they do not cover long-term care. 

Does Medicare Advantage Cover Long-Term Care or Home Care Services?

Medicare Advantage, also known as Medicare Part C, is an alternative way to get Medicare coverage. These plans are offered by private insurance companies, combining Medicare Part A and Part B into a private policy, similar to traditional health insurance. 

Many Medicare Advantage plans today also combine Medicare Part D (prescription drug coverage) as well as other desirable add-ons associated with health insurance.

Similar to Original Medicare, Medicare Advantage plans do not provide comprehensive coverage for long-term care services. Medicare Advantage does cover skilled nursing care.

However, some Medicare Advantage plans offer an add-on for in-home support services. This could include personal care services, home improvement, adult day care, respite care, transportation, and more services associated with long-term care. However, home care support is often limited in scope and typically short-term.

The reason some Medicare Advantage policies offer these benefits is that custodial care services can help improve emotional and physical well-being, which is a focus of Medicare Advantage plans.

However, it's important to remember that each Medicare Advantage plan is different. This is not a standard benefit within Medicare Advantage. Home support services are an add-on available on select policies. In addition, some policies may require that your doctor authorize in-home care before the policy will cover it.

While this is better than regular health insurance or Original Medicare, Medicare Advantage plans are not a replacement or option for comprehensive long-term care coverage. 

Does Medicaid Cover Long-Term Care? 

Unlike Medicare, Medicaid does cover some long-term care services. Medicaid is a government assistance program that provides health insurance to low-income and disabled individuals.

To qualify for Medicaid, you must meet strict asset and income requirements. This usually means spending down your income and assets to meet Medicaid financial requirements. 

Every state has different requirements for spend-down. In most states, the spend-down is $2,000 with a five-year look-back period. Medicaid only helps pay for long-term care after you meet these asset and income requirements. 

However, even though Medicaid covers long-term care, it's not comprehensive. Medicaid only works through affiliated facilities and providers, meaning your coverage options may be far more limited than if you paid out-of-pocket or with Long-Term Care Insurance.

Additionally, Medicaid recipients are only entitled to long-term care in the form of nursing home care. 

Medicaid does offer home care and assisted living coverage through its Home and Community Based Services (HCBS) waiver program, but this is only available on a limited basis. Some states may not offer HCBS, and other states may have extensive waiting lists or limited services available. 

Even if you do get long-term care that works for you, Medicaid practices estate recovery. This is where the government takes the remainder of the care recipient's estate after their passing. Meaning it could impact your ability to leave money, a house, or other assets to your family.

It’s also worth noting that while Medicaid is a federal program, it is administered by states. This means financial eligibility, coverage, and availability of waiver programs can vary greatly from state to state. 

You can read our Medicaid article to learn everything you need to know to get long-term care through Medicaid. 

Why Long-Term Care Insurance Is the Best Way to Pay for Long-Term Care

Neither health insurance nor Medicare covers long-term care, and Medicaid covers long-term care with significant limitations. So what can you do to pay for long-term care?

Long-Term Care (LTC) Insurance is a private insurance option that offers comprehensive coverage for a range of long-term care services, including assisted living, home care, memory care, and nursing homes.

LTC Insurance is an essential part of retirement planning, allowing you to protect both yourself and your family from the hidden costs of long-term care. It goes deeper than just protecting your finances; you're also protecting your family from the burden of your care needs down the line.

Long-Term Care Insurance is more affordable than you might think. The best time to purchase a new policy is in your 40s, 50s, or early 60s. During this time, most people are in good health and do not require consistent medical or long-term care.

You cannot apply for a new LTC Insurance policy if you currently need care. Those who are young and in good health will also get a better rate compared to those who wait until their retirement years.

LTC News has dozens of educational articles on Long-Term Care Insurance and retirement planning; you can learn more on our Insurance 101 page. This page includes vital information on LTC Insurance costs, partnership policies, and hybrid Long-Term Care Insurance policies. 

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Planning Ahead for Long-Term Care Costs

Long-term care coverage is a complex topic, but one thing is clear: traditional health insurance policies and Medicare do not cover long-term care.

Programs like Medicaid can help pay for some long-term care services, but coverage is limited. As a result, many individuals end up covering a significant portion of their long-term care costs themselves.

A Long-Term Care Insurance policy is one of the best ways to prepare for the cost of long-term care. It helps cover a wide range of care needs, from in-home assistance to nursing facilities. Premiums tend to stay consistent over time, and once you have a policy, your care is covered up to the amount of benefits in your plan.

You can work with a Long-Term Care Insurance specialist to find the best policy for your needs and budget. Specialists aren't tied to any specific company; they're on your side, looking out for your best interests at the best price available.

For more information on covering long-term care expenses, you can read the articles below:

• Long-Term Care Insurance Cost: Factors, Considerations and Price Ranges – Long-Term Care Insurance policies are a great investment in your future, but how much do they cost? Generally, the cost will depend on your age, health, and the benefits you'd like within your policy. This article breaks down what you can expect to pay with examples.

• What Are the Consequences of Not Planning for Long-Term Care? – Long-term care often isn't discussed enough when it comes to retirement planning. But how bad can it actually be? This article explores the consequences of not planning for your future care needs, from the financial drains to the burdens on your loved ones.