Doesn’t Medicare or Medicaid pay for long-term care?
One of the most common misconceptions about long-term care is that government programs will cover such expenses. Medicare, which is a health insurance program for people over the age of 65, fully covers only 20 days in a Medicare-approved skilled nursing facility, and only if the nursing facility stay is immediately preceded by a three-day hospital stay. From the 21st day through the 100th day, a co-payment of $97 is required. Considering that the average daily cost for care in a skilled nursing facility was $1361 in 1997, Medicare coverage doesn’t go very far!
In addition, Medicare only covers restorative care – not chronic or maintenance care. Thus, as soon as doctors determine that your condition will not improve, Medicare coverage is terminated – potentially before even the end of the 20 days that are theoretically “fully covered.”
After 100 days, Medicare does not cover skilled nursing care – regardless of your health status. As shown in the chart2, Medicare pays only 9% of the long-term care facility expenses for its beneficiaries.
Medicaid is a federal and state funded welfare program. Historically, Medicaid programs have paid approximately 44% of long-term care facility expenses. However, to become eligible for Medicaid benefits, recipients must first spend their assets down to the poverty level. Furthermore, once qualified for Medicaid, recipients have little or no choice in determining where care will be provided. While a healthy spouse will be allowed to keep a personal residence and a limited amount of assets for his or her lifetime, upon the death of the surviving spouse, Medicaid is required by law to attempt to recover from the estate any Medicaid benefits that were paid to the Medicaid-qualified spouse.