Medicare is not a complete system of health care. Even though it pays for many preventive services and covers most medically necessary services, Medicare pays for less than half of what seniors typically spend on their total health care expenses. For example, Medicare does not pay for routine dental, eye care, or hearing aids. More significantly, it does not pay for long-term care at home or in a nursing home when this care is primarily personal care services or custodial care.
It is important to plan for later years because not all are created equal. The idea is that SSI will take care of you or that your financial status is protected; think again; savings can be greatly diminished if you have not prepared for your healthcare needs, long-term needs, and income replacement needs.
Many people mistakenly believe that Medicare pays for long-term care. The truth is that Medicare does not pay for long-term care. Medicare is designed to cover medical expenses for acute conditions. For example, Medicare will pay for hospitalization and treatment if a person suffers a stroke or cancer. However, as soon as the beneficiary no longer requires a bed in an acute care facility, Medicare benefits cease, and the beneficiary is on their own.
Medicare does pay for medically necessary skilled nursing facility care for very short periods; however, beneficiaries must meet certain criteria. To qualify for this type of Medicare coverage, the following is required:
Medicare will not pay for personal care services or custodial care outside a nursing facility. However, suppose an individual qualifies for coverage based on the need for skilled nursing or rehabilitation as described. In that case, Medicare will cover all of their needs in the facility, including assistance with ADLs.
Even when an individual meets the requirements of having spent at least three full days in the hospital, needs skilled nursing care, and a physician has ordered the care, Medicare limits the number of days it will pay for care in a skilled nursing facility. Medicare covers SNF care as follows:
The supplemental coverage provided through a Medicare Advantage or Medigap plan may cover part or all of the beneficiary’s share of the SNF cost for days 21 through 100 when Medicare coverage requires a daily co-payment. However, when the underlying Medicare benefit ceases, the supplemental coverage also stops.
After 100 days, Medicare pays nothing for skilled nursing facility care. Once these limited Medicare benefits are exhausted, other options for payment are personal funds, a long-term care insurance policy (if the beneficiary had the forethought to pre-plan)
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Information presented on this website is not intended as tax or legal advice. You are encouraged to seek tax or legal advice from a qualified professional.
