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Nearly 70% of Americans aged 65 and older will require some form of long-term support or services in their lifetime. Yet most of us don’t think about long-term care until the need is staring us in the face.
Long-term care isn’t something only the very old or frail require. The need can arise post-op, after an accident, or as we age.
Americans are living longer, but that doesn’t always mean their lives are healthy or without complications. Mobility issues, chronic conditions, and cognitive decline don’t necessarily send you to the hospital, but they can make everyday living difficult without support.
As physicians, we already know this, but most of the time, we forgo thinking of ourselves or those close to us as vulnerable.But the scenarios are familiar. An aging parent who once lived independently can no longer manage the stairs or cook safely. A spouse recovering from hip surgery needs help getting in and out of the shower. Or you, still in your working years, begin noticing how quickly time moves and how unprepared you might be for your own eventual needs.
Despite the frequency with which long-term care becomes necessary, few Americans have planned for it. Many assume, quite reasonably, that Medicare, our nation’s health insurance program, will cover it.
After all, Medicare is there for retirement, right?
The reality is more sobering. Medicare covers a lot, but it doesn’t cover most of what we think of as long-term care. Particularly not the kind that’s non-medical, ongoing, and needed day after day, i.e., custodial care, personal care, or assistance with the activities of daily living.
In this article, we’ll discuss exactly what’s covered, what isn’t, and what alternatives are available for the discerning doc who knows it’s always better to be safe than sorry, especially in terms of care.
Read about the Nine Retirement Myths you shouldn’t fall for.
Why You Should Pay Attention to Long-Term Care (LTC) Planning Now
As mentioned earlier, according to the U.S. Department of Health and Human Services, 7 in 10 Americans over the age of 65 will need what the report terms as Long-Term Services and Supports (LTSS). But only 48% of those receive some paid care.
This care may include help with basic personal tasks at home, an assisted living facility, or full-time care in a nursing home.
According to the 2025 Nationwide Retirement Institute Long-Term Care survey, 58% of adults mistakenly believe that Medicare covers long-term care, including assisted living.
This misconception is more than just a harmless myth; it’s a misunderstanding that can derail entire retirement plans, drain family resources, and create chaos during moments that are already emotionally overwhelming.
Understanding exactly what Medicare does and doesn’t pay for is a critical step in preparing for aging with dignity and control.
What is Considered “Long-Term Non-Medical Care?”
Long-term non-medical care is often referred to as custodial care. It refers to assistance with Activities of Daily Living (ADLs), such as:
- Bathing
- Dressing
- Eating
- Toileting
- Transferring (e.g., from bed to chair)
- Managing incontinence
This type of care can be provided in-home, in assisted living communities, or in nursing homes, but is not considered technically medically necessary. That distinction of medical vs. non-medical is exactly where Medicare draws the line.
In case you missed it: Planning for Healthcare Costs in Retirement as a Physician
What Does Medicare Cover?
Medicare is a federal program primarily designed to cover acute and medical care, not supportive long-term living assistance. Here’s what Medicare typically includes:
| Service | Covered by Medicare? |
| Hospital inpatient care | Yes (Part A) |
| Skilled nursing facility (short-term) | Yes, up to 100 days |
| Home health care | Yes, if deemed medically necessary |
| Hospice care | Yes (Part A) |
| Doctor visits, preventative services | Yes (Part B) |
| Prescription drugs | Yes (part D or via Medicare Advantage plans) |
| Custodial care (ADLs) | No |
| Assisted living | No |
| Long-term nursing home residency | No, unless skilled nursing is required temporarily |
Data Source: Medicare.gov
Medicare only covers skilled care, and that too, only for a limited time. Medicare Part A fully covers the first 20 days of a qualifying nursing home stay. From day 21 through day 100, you’re responsible for a daily coinsurance. Beyond 100 days, all costs fall to you.
What Medicare Does Not Cover
Here’s a list of things Medicare explicitly does not cover:
- Long-term residence in assisted living facilities.
- Non-medical, custodial help with ADLs.
- Ongoing care for dementia or Alzheimer’s in a memory care unit.
- Private rooms in nursing homes, unless medically necessary.
- Meal delivery, housekeeping, or 24/7 supervision.
This often leaves seniors and families caught off guard when they realize they’re responsible for the full cost of care, especially in assisted living settings, which are increasingly the norm for aging Americans with chronic, non-acute health issues.
According to Genworth and CareScout’s 2024 Cost of Care Survey, the median annual cost for a home health aide providing personal, hands-on support with tasks like bathing, dressing, and eating is $77,792.
For non-medical help, such as meal preparation, housekeeping, and errands, the median annual cost came in slightly lower at $75,504
Where Does Medicaid Fit In?
When Medicare falls short, many turn to Medicaid. But Medicaid is a means-tested program, not an entitlement, and you have to spend most of your assets to qualify.
Eligibility requirements vary by state, but in general
- Single individuals must have less than $2,000 in countable assets.
- Income limits are often tied to a percentage of the federal poverty level.
- Spending down assets (like liquidating savings or even a home) is common.
- There’s a five-year look-back rule for asset transfers.
Some states have Medicaid waiver programs that help seniors receive care in-home or in assisted living rather than in institutional settings. However, access is limited, and long waitlists are common.
What About Medicare Advantage?
Some Medicare Advantage (Part C) plans may offer limited supplemental benefits for non-medical needs, like transportation, meal delivery, or brief personal care visits.
But these offerings vary widely by plan and are often limited in scope and duration. They do not substitute for full custodial or residential long-term care.
In 2020, CMS allowed Medicare Advantage plans more flexibility to offer supplemental benefits for chronically ill enrollees. But again, these services are narrowly defined and not guaranteed.
Other Options to Cover Long-Term Care Costs
So what’s a pragmatic individual, especially a high earner, to do when it becomes clear that Medicare won’t foot the bill for long-term custodial care?
When the government safety net doesn’t reach far enough, it’s time to consider alternative strategies. Here’s a closer look at the options.
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Long-Term Care Insurance
Long-term care insurance can help cover custodial care in a variety of settings, including home care, assisted living, and nursing facilities.
But policies:
- Must be purchased before you need care.
- Get more expensive as you age.
- Often include waiting periods and benefit caps.
According to the American Association for Long-Term Care Insurance (AALTCI), the average annual premium for a 60-year-old couple in good health, purchasing a policy where benefits grow at 2% yearly, is around $4,500.
-
Hybrid Life Insurance with LTC Riders
Some permanent life insurance policies now include long-term care riders, allowing you to tap the death benefit for care needs.
These tend to be less restrictive than traditional LTC policies and can be more cost-effective for those who don’t end up needing long-term care.
-
Health Savings Accounts (HSAs)
HSAs can be used tax-free to pay for long-term care services and premiums for LTC insurance.
But you must have contributed during your working years, and you need a qualifying high-deductible health plan to open one.
Now, let’s compare:
| Option | What It Covers | When You Must Act | Pros | Cons |
| Long-Term Care Insurance | Custodial care in home, assisted living, and nursing facilities | Must purchase before you need care | Dedicated coverage; protects assets; customizable benefit periods | Costly premiums; prices rise with age; may include waiting periods |
| Hybrid Life Insurance w/ LTC Rider | Allows access to death benefit for LTC expenses | Best to purchase in your 40s–60s | Provides LTC coverage and life insurance; more flexible than LTC-only | Can be expensive; reduces death benefit if LTC funds are used |
| Health Savings Account (HSA) | Qualified LTC services and LTC insurance premiums (tax-free withdrawals) | Must contribute during working years | Triple tax benefit (pre-tax contribution, tax-free growth & withdrawals) | Must have high-deductible health plan; contribution limits apply |
Planning Ahead
You can’t count on Medicare to handle long-term non-medical care, but you can prepare.
It’s best to start planning and preparing as early as possible, because the younger and healthier you are, the lower the insurance premiums will be.
Planning might include looking into LTC insurance, understanding your state’s Medicaid eligibility rules, and discussing your future care preferences with family members before a crisis makes those conversations harder.
Some individuals even set aside a dedicated savings fund specifically for long-term care to maintain flexibility and control over future choices.
The bottom line? Medicare will not pay for the kind of long-term support most people will need, the kind that helps you stay independent but isn’t deemed medical.
Understanding this now, while you have the time and flexibility to plan, is essential.
You may not know exactly how your health will unfold. But you can stack the odds in your favor by confronting the reality head-on.
Be sure to read about 8 Healthcare Options For Early Retirees
Frequently Asked Questions
Q: Does Medicare pay for assisted living?
No. Medicare does not cover assisted living facilities unless you are receiving skilled care following hospitalization, and even then, only temporarily.
Q: What’s the difference between skilled care and custodial care?
Skilled care involves medically necessary treatments by nurses or therapists. Custodial care involves help with daily activities (like bathing or dressing), which Medicare doesn’t cover.
Q: Will Medicare Advantage plans cover long-term care?
Not fully. Some plans may offer limited benefits for short-term personal care or services like transportation or meals. But they don’t cover extended custodial care or assisted living.
Q: Can I use Medicare for in-home care?
Yes, but only for medically necessary home health services. Routine custodial care at home is not covered.
Q: Is there any situation where Medicare covers long-term care?
Only in specific cases. Up to 20 days in a skilled nursing facility are fully covered; for days 21 to 100, you are responsible for coinsurance. After that, coverage ends.
