Many people mistakenly think that Medicare will pay for their future long-term care needs. That’s probably because prior to 1998 it did. But the rules changed with the passage of new legislation. Today, Original Medicare coverage for long-term care services is very limited and it should not be considered a funding source for long-term care expenses.
Medicare is the federal health insurance program for people age 65 and older or those younger who are totally disabled. It was created in 1965 under the Social Security Act. Medicare is curative or rehabilitative in design. There are four different parts to Medicare:
Medicare Part A is considered hospital insurance. It helps cover the cost of a skilled nursing facility following three nights in a hospital when discharged to a Medicare-approved skilled nursing facility, hospice or housebound and approved for home health care.
Medicare Part B is considered medical insurance and covers medically necessary services like doctors’ fees and outpatient care. Part B also helps cover some preventive services to help maintain health. This is a voluntary program with premiums, deductibles and co-pays. The monthly premium is deducted from the insured’s Social Security check.
Medicare Part C, also known as Medicare Advantage plans, combines Part A, Part B and sometimes Part D. These plans must cover medically necessary services and can charge different co-payments, coinsurance or deductibles. Medicare Advantage plans are offered through private health systems and may offer more coverage including hearing, vision and dental plans.
Medicare Part D is prescription drug coverage. It helps lower prescription drug costs and helps protect against higher costs in the future. There are several plans offered through private insurance carriers.
Medicare Supplement Policies, also known as Medigap plans, augment Original Medicare coverage. They are standardized by the Centers for Medicare and Medicaid Services, but sold, priced and administered by private companies.
Today, Original Medicare will cover 100% of the first 20 days in a skilled nursing facility, if specific requirements are met. These include: 1) being hospitalized for three nights, 2) needing skilled care on a daily basis, 3) being under a curative or rehabilitative plan of care supervised by a physician and 4) entering the facility within 30 days of being hospitalized and for the same reason as the hospitalization.
After the first 20 days, Medicare may cover a portion of the next 80 days. During this time the Medicare beneficiary must pay the daily deductible or coinsurance fee. Currently, the daily deductible is $185.50.
Beyond 100 days, Medicare covers very little in the way of custodial care. Recent studies report that on average Medicare pays for about 22 days of long-term care. The limiting requirement is that most beneficiaries do not need skilled care on a daily basis longer than about 22 days.
Beginning in January 2019, Medicare Advantage plans have the option to cover some home safety improvements and assistance with daily activities if health related. This is new and few insurers have included these options which can change annually.