Medicare hasn't covered long-term care traditionally. That's beginning to change. Well, sort of. 

The Centers for Medicare and Medicaid Services are letting Medicare Advantage insurers expanding into long-term care services. 

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Medicaid typically offers long-term care coverage for those who qualify. Medicaid coverage includes assisted living, nursing home and in-home care. However, you have to be eligible for Medicaid, which is for low-income people. See the differences between Medicare and Medicaid

That level of long-term care coverage isn’t available in Medicare. However, Medicare Advantage has expanded supplemental benefits that cover some long-term and at-home care.

The word "long-term care" can be somewhat misleading. Sometimes the care isn't really "long term." Insurance Information Institute (III) said the term pertains to actions called "activities of daily living" (ADLs):

  • Eating
  • Bathing
  • Dressing
  • Toileting 
  • Transferring
  • Maintaining continence 

"In general, if you can't do two or more of these activities, or if you have a cognitive impairment, you are said to need 'long-term care,'" III said. "Long-term care isn't a very helpful name for this type of situation because, for one thing, it might not last for a long time. Some people who need ADL services might need them only for a few months or less."

This care could be provided in a nursing home, but that’s not required. It can also be at an assisted living facility, adult day care center or home.

 

Does Medicare cover long-term care?

The short answer is no. Not in the technical sense of the term. 

III said it's vital to understand the difference between help with ADLs, which is referred to as "custodial care," and "skilled care." Skilled care is help with medical, rehabilitation services, nursing, testing or taking medication. This distinction is important because Medicare and most private health insurance pay only for skilled care -- not custodial care.

Medicare Advantage covers specialized care, such as stays in a skilled nursing facility, hospice and respite care and eligible home health services. Some Medicare Advantage plans now cover certain long-term care and at-home care services. These services include home-delivered meals and grab bars for home bathrooms.

"Medicare Advantage plans now have the flexibility to offer new supplemental benefits like in-home care support, but long-term care coverage is different," explained Cathryn Donaldson, director, Communications & Public Affairs, America's Health Insurance Plans (AHIP).

 

Long-term care alternatives

We’ve reviewed how Medicare Advantage is adding supplemental benefits to help with aspects of long-term care, but how can you get actual long-term care coverage? 

Medicaid is often how people get long-term care protection. However, you have to qualify in your state. Enrollment differs from state. Most states expanded Medicaid to allow people to enroll who are 138% of the federal poverty level. 

There are two other options if you don’t qualify for Medicaid, but you need to get coverage before you require long-term care protection:

  • Combination life insurance -- The most common way to get long-term care coverage is through a permanent life insurance policy with a long-term care rider. These policies are called combination life insurance. Any money not used for long-term care will go to the death benefit. 
  • Long-term care insurance -- Once a common way to get long-term care coverage, fewer people are buying long-term care insurance. One reason is only about a dozen insurers even offer long-term care insurance. Fewer insurers and members mean higher rates for those with coverage. Unlike combination life insurance, long-term care insurance rates increase as you age. 

Here’s more about comparing the long-term care options. No matter what you choose, keep in mind that Medicare Advantage may help, but you’ll need more long-term care coverage.