Does Medicare Cover Long-Term Care? Clearing Up the Confusion About Coverage
- Elder Love USA
- Jul 15, 2025
- 4 min read
Long-term care is something most of us will need at some point in our lives.
Whether it’s due to a sudden illness, like a stroke, or gradual health decline from chronic conditions, many older adults find themselves requiring extra assistance.
According to the Urban Institute and the Department of Health and Human Services, 70% of people turning 65 will need long-term care during their lifetime.
As our ability to perform daily activities independently decreases, our reliance on care services increases.
However, the big question is: Will Medicare cover it?
The Cost of Long-Term Care
The reality is that long-term care can be very expensive, and those costs continue to rise.
For example, in California, the annual median costs for different services are:
Homemaker services: $89,552
Home health aide: $91,909
Adult day health care: $24,102
Assisted living community: $90,846
Nursing home care (semi-private room): $144,553
Nursing home care (private room): $187,599
These costs vary depending on your location, the level of care needed, and how long care is required. On average, people need about three years of long-term services and support during their lives.
The cost of care isn't getting any cheaper. With inflation and a healthcare workforce shortage, the price for these services could continue to rise.
Post-pandemic, healthcare inflation has spiked from 5-8% annually to 10-20%.
Can Older Adults pay for Long-Term Care on their own?
Many people pay for long-term care with personal savings, pensions, income from investments, or proceeds from the sale of assets. However, most Americans aren’t prepared for these costs. A 2023 survey by the Kaiser Family Foundation found that nearly 70% of adults ages 50-64 have not set aside money for future care needs, and even 48% of those over 65 have not saved for it. Most people find the costs of long-term care nearly impossible to cover: 90% of respondents said they couldn’t afford the $100,000 needed for one year in a nursing home, and 83% said the same about $60,000 for a home health aide. The financial burden is not only on the people receiving care, but also on their caregivers as well. The same KFF survey found that 56% of caregivers cut back on essentials like food and clothing due to the cost of care, with 49% of those in lower-income households struggling to pay rent or utilities.
The Medicare Confusion
Here’s where the confusion sets in. A study by Nationwide found that 58% of U.S. adults mistakenly believe Medicare covers long-term care, but it doesn’t.
Most long-term care services, like help with daily activities (eating, bathing, dressing, medication reminders, and companionship), are considered custodial care, not medical care, and therefore are not covered under Medicare.
Because many people mistakenly believe that Medicare will cover long-term care, many don’t invest in private long-term care insurance.
Only about 3-4% of Americans have long-term care insurance, according to LIMRA.
Insurance companies have also started limiting options, with many pulling stand-alone long-term care policies from the market.
These policies specifically cover the cost of nursing home care, home health care, and assisted living services, but rising costs and the increasing risk for insurers have made them less appealing to sell.
Medicaid - Free Care For Those Who Need It The Most
While Medicare does not cover most long-term care, Medicaid is the largest payer of long-term care in the United States. Medicaid can cover custodial care, including help with eating, bathing, dressing, toileting, mobility, and continence. However, Medicaid only covers those with very limited income or assets, meaning it is not an option for many older adults.
What Does This Mean For The People In The Middle?
For those who cannot afford the high cost of long-term care, but are also not financially eligible for Medicaid, it is important to start learning about your options and planning for long-term care as early as possible. One of the first steps is to reach out to a financial planner who can help you assess the potential costs of long-term care along with your retirement planning. They can help you understand what options are available and help you make an informed decision about financing your care.
Private financing options, such as reverse mortgages, life insurance policies, annuities, and trusts, may offer solutions to help cover the costs of long-term care. A financial planner can provide guidance on which might be right for your situation.
In addition, it’s important to inquire about state and federal programs that can provide financial help. These programs often have different eligibility requirements, so it's crucial to understand what assistance may be available to you. You can visit the Costs & Who Pays page on the LongTermCare.gov website to learn more about the benefits and programs offered.
Another option to explore is insurance policies, including hybrid policies or Critical Care and Critical Illness Insurance, which may help offset long-term care expenses.
Elder Love USA was started for the people just above the cut off and who qualify for nothing, but have nothing.
Elder Love USA is here to help with affordable in-home care services. Our founder was inspired by the need for quality care and affordable services for the individuals who fall in the category of not being rich enough to afford care on their own but not too poor to be eligible for free care. You can read more about our mission and how we can support your loved ones here.
The bottom line is that there are many options available to help you plan and prepare for long-term care. What's clear is the importance of planning ahead. The earlier you start, the better equipped you'll be to handle the financial aspects of aging.
As the only nonprofit agency in California offering home care services, we are dedicated to providing compassionate affordable in-home care.
Our dedicated care professional can help you think through your options and explain what types of support may be appropriate based on your specific needs.
All caregivers undergo thorough background checks and training with certification.
Our rates are lower than other providers thanks to partnerships, donations, grants, and revenue from our cleaning program.
Our caregivers can assist with personal care, shopping, cooking, transportation, housekeeping, and case management.
We proudly serve Riverside County, CA, San Diego County, CA, San Bernardino County, CA, Orange County, CA, Imperial County, CA, and Phoenix, AZ. For more information, contact us at 888-336-8322 or send an email to info@elderloveusa.org
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