How Do I Pay for Long-Term Care?

Jory Cross by Jory Cross | Licensed since 2012
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This article was updated on: 10/06/2018

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If you’re wondering if you may need long-term care in your later years, there is a probability that you will. According to the U.S. Department of Health and Human services, someone turning 65 today has almost a 70% chance of needing some type of long-term care services in their remaining years. Women need long-term care an average of 3.7 years and men need long-term care an average of 2.2 years.

Learn more about what is long-term care.

What is the cost of long term care?

You could see your monthly living costs skyrocket when you are paying for long-term care. According to the U.S. Census Bureau, the median asking for rent for vacant units was $910 a month in late 2017. The monthly cost for a nursing home is on average more than eight times the median cost of rent across the United States. According to the U.S. Department of Health and Human Services (HHS), the average cost for a private room in a nursing home is $7,698 per month in 2016. In more expensive states like Massachusetts, the cost of long-term care is even higher, with a median private room in a nursing home costing $12,471 per month.

Assisted living facilities are significantly less expensive than nursing homes but still much more expensive than average rent costs. According to HHS, the national average cost of an assisted living facility (for one-bedroom unit) in the United States is $3,628 per month in 2016.

If you are able to live at home and require the help of a home health aide, you may pay $20.50 an hour for this help (in 2016), according to HHS. If you need 24 by 7 home health care, this could cost you $15,252 per month.

Does Medicare pay for long-term care?

Medicare generally only covers medical care. Much long-term care is custodial care rather than medical care. Non-skilled personal care, such as help bathing, dressing, eating, using the toilet, and moving around would be considered custodial care. Medicare generally doesn’t cover custodial care if that’s the only care you need. Medicare does, however, generally cover:

  • Long-term hospital care
  • Skilled nursing facility care in a skilled nursing facility
  • Some home health services like physical therapy or speech-language pathology services
  • Hospice and respite care

Medicare coverage of hospital and medical costs applies to you both if you are living independently and if you are living in a long-term care facility. For example, if you need durable medical equipment, such as a walker, when you are living in a long-term care facility, Medicare will generally cover it. If you have Medicare Part D you also may have coverage for prescription drugs you take in a long-term care facility.

Learn more about Medicare coverage of long-term care.

What are other ways to pay for long-term care?

There several ways to cover the cost long-term care including:

  • Long-term care insurance
  • Life insurance
  • Reverse mortgages

Unlike Medicare, long-term care insurance will cover custodial care, such as eating, bathing, and dressing, according to the U.S. Department of Health and Human Services (HHS). Long-term care insurance is offered by private insurance companies and reimburses you a daily amount for long-term care. If you are already receiving long-term care services, you may not qualify for long-term care insurance. Also be aware that some long-term care insurance policies may only cover you for a pre-determined amount of time, such as two to five years.

Some life-insurance policies allow you to receive a tax-free advance on your life insurance death benefit while you are still alive, according to HHS. You may be able to use your life-insurance policy to pay for long-term care services this way. You may be eligible for what is called “accelerated death benefits” if you are terminally ill, need long-term care, or are permanently confined to a nursing home. Sometimes you must pay an extra premium to add the feature of accelerated death benefits to your life insurance policy.

According to HHS, a reverse mortgage allows you to receive cash against the value of your home without selling it. For most reverse mortgages you can spend the money without restrictions and pay for long-term care with it. You could receive a lump-sum payment, a monthly payment, or a line of credit, and retain title and ownership of the house.

Do you have more questions about Medicare coverage of long-term care?

I can help get you answers. You can then reach out to me by clicking one of the other buttons below. You can either set up some time for a phone call, or have me email you with personalized information. If you’re interested in looking at Medicare plan options in your area, use the Compare Plans buttons on this page. If you have more specific questions and want to speak to someone right away, call and ask for me at the number below.

The product and service descriptions, if any, provided on these Medicare.com Web pages are not intended to constitute offers to sell or solicitations in connection with any product or service. All products are not available in all areas and are subject to applicable laws, rules, and regulations.

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