Paying for long-term care

Help with bathing, dressing, and daily life is expensive, and many families are surprised by what Medicare won’t pay. Here is who pays for what, in plain English, and where to get free, official answers for your parent’s state.

What Medicare does and doesn’t pay for

Medicare doesn’t pay for long-term care. Medicare.gov says most long-term care (also called custodial care) is non-medical help with everyday tasks like dressing, bathing, and using the bathroom, and that Medicare and most health insurance, including Medigap, don’t pay for it, whether at home, in assisted living, or in a nursing home.

What Medicare can cover, for a limited time:

• Skilled nursing facility care (Part A), short-term only. Medicare.gov says your parent generally needs a medically necessary inpatient hospital stay of at least 3 days in a row first (time under “observation” or in the emergency room doesn’t count), must enter a Medicare-certified skilled nursing facility within a short time (generally 30 days), and must need daily skilled care. Part A covers up to 100 days in each benefit period.
• Home health care (Parts A and B). Medicare.gov says it covers part-time or intermittent skilled care at home for people who are homebound, ordered by a doctor or other provider and given by a Medicare-certified agency. It doesn’t cover 24-hour care at home, meal delivery, homemaker services, or personal care when that’s the only care needed.

See our Medicare basics guide for Parts A, B, C, and D, and for help paying Medicare costs.

Medicaid and long-term care

Medicare.gov describes Medicaid as a joint federal and state program that provides health coverage for certain people with low income, including older adults and people with disabilities. Medicaid.gov says Medicaid is the main payer for long-term care services across the nation. Depending on the state, it can cover nursing home care and home and community-based services, so some people can get help at home instead of moving.

The rules depend on your parent’s state. Each state runs its own Medicaid program within federal rules, so income and asset limits and covered services differ. Ask your parent’s state Medicaid agency (list below). We don’t list dollar limits because they vary by state and change every year.

The 5-year look-back

Under federal law (42 U.S.C. 1396p(c)), when someone applies for Medicaid nursing home care or certain home and community-based services, the state looks back 60 months (5 years) for money or property given away or sold for less than it was worth. Those transfers can lead to a penalty period when Medicaid won’t pay for that care. The law has some exceptions (for example, certain transfers to a spouse) and requires states to have a way to ask for a hardship waiver. An elder-law attorney can explain how this applies.

If one parent still lives at home

Medicaid.gov explains that federal “spousal impoverishment” rules protect the spouse who still lives at home. A certain amount of the couple’s combined resources is set aside for that spouse, and some of the income of the spouse in the nursing home can also be set aside for them. The amounts are updated each year. Your state Medicaid agency can tell you the current figures.

Estate recovery

Medicaid.gov says states must seek repayment from the estate of a Medicaid enrollee who was 55 or older, for nursing facility services, home and community-based services, and related hospital and prescription drug services. States may choose to recover for other Medicaid services too. States can’t recover while there is a surviving spouse, a child under 21, or a blind or disabled child of any age, and states must have a hardship waiver process. Federal law also limits how much home equity a person can have and still get long-term care Medicaid, unless a spouse or certain children live there (the limit is adjusted every year).

Your state’s Medicaid agency

PACE (Program of All-Inclusive Care for the Elderly)

Medicare.gov says PACE is a Medicare and Medicaid program, available in some states, that helps people who need a nursing home level of care get coordinated care while living in the community. A team of health professionals coordinates care, and PACE covers all Medicare- and Medicaid-covered care plus other services the team decides are needed, including prescription drugs.

• Who can join: people at least 55 who live in a PACE organization’s service area, need a nursing home level of care (as certified by the state), and can live safely in the community with PACE’s help.
• Cost: Medicare.gov says people with Medicaid don’t pay a monthly premium for PACE. Others pay monthly premiums. There are no deductibles or copays for care the PACE team approves.
• Find a program: search for PACE plans on Medicare.gov or call your parent’s state Medicaid office.

VA Aid and Attendance (for veterans and survivors)

VA.gov says Aid and Attendance and Housebound benefits are monthly payments added to a VA pension for qualified veterans and survivors. To get Aid and Attendance, your parent must get a VA pension and meet at least one of these:

• needs another person to help with daily activities like bathing, feeding, and dressing,
• has to stay in bed, or spend much of the day in bed, because of illness,
• is a patient in a nursing home because of lost mental or physical abilities related to a disability, or
• has very limited eyesight (as VA defines it).

Housebound benefits are for people who get a VA pension and spend most of their time at home because of a permanent disability. You can’t get both at once. Apply online, by mail with VA Form 21-2680, or at a VA regional office. Learn more at VA.gov.

Long-term care insurance

If your parent already has a long-term care insurance policy, find it now and read how to file a claim. The U.S. Administration for Community Living (ACL) explains:

• Policies usually pay a daily amount, up to a limit chosen when the policy was bought, for help with daily activities such as bathing, dressing, or eating, at home or in a facility.
• Many policies limit how long or how much they pay (for example, two to five years). Few have no limit.
• Price depends on age when bought, the daily amount, how long benefits last, and options like inflation protection. The company may raise premiums, so ACL suggests asking for the company’s rate history.
• Most individual policies require health questions, so a person in poor health or already getting long-term care may not qualify.

Other ways families pay

The NIA says people often combine personal savings, pensions or retirement accounts, investment income, the sale of a home, and government programs. To see roughly how long savings might last, try our care savings calculator. Some homeowners look at a reverse mortgage. Read our reverse mortgage guide first, especially the part about long stays in a care facility. For local programs, call the Eldercare Locator at 1-800-677-1116.

Medicaid planning scams

Some people sell “Medicaid planning” or “VA benefits planning” to worried families. Some are not qualified, and some earn commissions on products they sell. For example, in 2015 Washington’s attorney general sued a couple who charged older residents $2,500 to $5,900 for Medicaid and Aid and Attendance help, had no special training or required VA accreditation, and sold annuities that the attorney general said paid nothing or lost money.

Warning signs:

• They charge you to fill out or file a VA benefits application. VA says that’s illegal.
• They tell your parent to give away money or property, or buy an annuity or trust, quickly and before talking to a lawyer.
• They say your parent will qualify before anyone has checked the state’s rules. In the Washington case, families were told they would qualify, and many applications were delayed or denied.
• They ask for VA benefit payments to be deposited into a caregiver’s or someone else’s bank account. VA says benefits should go directly to the veteran or survivor.

What to do instead: ask the state Medicaid agency your questions directly (it’s free), and talk to an elder-law attorney licensed in your parent’s state before moving any money. To find one, use a bar-association lawyer referral service or free legal aid: see Find help. usaBob doesn’t pick or recommend lawyers. Report a scam to your state attorney general and the FTC at ReportFraud.ftc.gov.