Key Takeaways
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Medicare does not cover most long-term care expenses, so you need a strategy to manage potential costs.
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Planning ahead ensures you have financial and healthcare options when you need them most.
Understanding Medicare’s Role in Long-Term Care
Long-term care is one of the biggest expenses you may face as you age, yet many people mistakenly assume Medicare will cover all their needs. In reality, Medicare offers very limited coverage for long-term care, and understanding what is and isn’t included can help you plan accordingly.
What Medicare Covers—and What It Doesn’t
Medicare does not cover custodial care, which includes help with daily activities like bathing, dressing, and eating. Instead, Medicare is designed to cover medical care and rehabilitation services. Here’s a breakdown of what is covered:
Short-Term Skilled Nursing Facility (SNF) Care
Medicare covers skilled nursing facility care only under specific conditions:
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You must have been hospitalized for at least three days before entering the facility.
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A doctor must certify that you need skilled nursing care.
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Medicare will cover up to 100 days per benefit period, with full coverage for the first 20 days and cost-sharing required after that.
Home Health Care
Medicare may cover home health services if they are deemed medically necessary. This includes:
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Part-time skilled nursing care
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Physical, occupational, or speech therapy
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Certain medical supplies
However, Medicare does not cover 24/7 care at home or non-medical home care services.
Hospice Care
If you are diagnosed with a terminal illness and choose comfort care instead of curative treatment, Medicare covers hospice services, including:
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Pain management
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Symptom control
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Emotional and spiritual support
Why Medicare Falls Short for Long-Term Care
The reality is that Medicare is not designed to cover long-term care. It only pays for skilled medical services under certain conditions, but most long-term care involves help with daily activities rather than medical treatments.
Because of this, many people find themselves facing high out-of-pocket costs when they need long-term care.
The Cost of Long-Term Care in 2025
The cost of long-term care services varies widely, but expenses can be significant. On average:
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Nursing home care costs thousands of dollars per month.
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Assisted living facilities require substantial monthly payments.
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In-home caregiving costs add up quickly if round-the-clock assistance is needed.
These costs are rising each year, making it essential to plan ahead.
How to Prepare for Future Long-Term Care Needs
Planning ahead can make a significant difference in your ability to afford long-term care. Here are seven things you should do to prepare:
1. Assess Your Personal Risk Factors
Not everyone will need long-term care, but certain factors increase the likelihood:
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Family history of chronic illness
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Existing health conditions
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Lifestyle and mobility issues
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Age and longevity in your family
Understanding your risk can help you make informed decisions about your future care needs.
2. Explore Alternative Payment Options
Since Medicare doesn’t cover most long-term care expenses, you’ll need to explore other payment methods, such as:
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Medicaid (if you meet eligibility requirements)
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Long-term care insurance (if purchased in advance)
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Personal savings and investments
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Hybrid life insurance policies with long-term care benefits
3. Plan for Medicaid Eligibility
Medicaid is the largest public payer for long-term care, but it has strict income and asset limits. Planning ahead can help you qualify without depleting your savings.
Some strategies to consider:
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Asset protection strategies within legal limits
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Medicaid-compliant annuities or trusts
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Consulting a financial planner for Medicaid planning
4. Understand the Role of Family Caregivers
Many people rely on family members for care, but this is not always a long-term solution. Caregiving is physically, emotionally, and financially demanding. If you anticipate needing family support:
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Discuss expectations with your loved ones
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Consider respite care options
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Look into programs that provide financial support for family caregivers
5. Evaluate Assisted Living and Nursing Home Options in Advance
Waiting until care is needed can limit your choices. Instead, research facilities ahead of time to:
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Compare costs and services
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Understand quality ratings
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Visit potential locations
Making these decisions in advance reduces stress when the time comes to make a transition.
6. Create a Financial Plan for Long-Term Care Costs
A strong financial plan should include:
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A realistic budget for potential long-term care expenses
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Savings strategies tailored to your expected needs
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Investments that offer liquidity if care is required
Consulting a financial advisor can help you develop a strategy that fits your circumstances.
7. Legal Preparation: Advance Directives and Power of Attorney
Making legal preparations ensures your wishes are honored and decisions can be made on your behalf if necessary. Important documents include:
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A durable power of attorney for finances and healthcare
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A living will outlining your medical preferences
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Estate planning documents to protect your assets
Taking the Next Steps for Long-Term Care Planning
Medicare provides essential healthcare coverage, but it does not offer the long-term care benefits many people expect. By understanding the gaps in coverage and planning ahead, you can take control of your future care and financial security.
A licensed agent listed on this website can help you explore your options and ensure you have a solid plan in place for long-term care.
