Long-term care is expensive. Even a temporary stay in a nursing home can derail years of careful financial planning. Although costs may vary significantly depending upon where you live, the average national cost for care in a nursing home is more than $75,000 a year for a private room and more than $66,000 for a semi-private room.

Medicare: What It Can and Can’t Provide
Medicare is the federal government’s health insurance program for the disabled and for people age 65 and over. Many Americans believe Medicare will pay their long-term care bills. In fact, Medicare pays only under certain conditions and only for a limited number of days. Currently, Medicare may cover skilled care in a nursing home for (up to) the first 20 days, and a portion of the cost for (up to) the next 80 days if admission follows (at least) a three-day hospital stay and the individual needs skilled care. The "need" for skilled care is determined according to specific Medicare criteria. To receive home care benefits from Medicare an individual must also meet specific Medicare guidelines.

The biggest gaps in Medicare coverage are:

• No coverage for "custodial" care, either at home or in a nursing home. (Care is considered custodial when an individual’s condition is stable, care needs have not changed over a period, and care needs are not expected to change.)
• No coverage in a nursing home unless it immediately follows hospitalization of at least three days.
• No coverage for nursing home care after 100 days
• Coverage only through a facility or home health care agency approved by Medicare.

See For More Information for links to obtain more information about Medicare benefits and Medigap Plans, which are supplements to Medicare sold by insurance companies. They pay for some of the costs not covered by Medicare, including co-payments and deductibles. They do not, however, provide coverage for long-term care.

Medicaid
Medicaid is a joint federal/state program that pays for health care for people with limited income and assets. The federal government has established broad national guidelines under which each state can establish its own eligibility standards. In order to receive Medicaid benefits, the recipient must meet the state’s guidelines for income and asset eligibility. This means, for example, that most of your loved one’s assets will need to be "spent down" or used up before he or she becomes eligible. To obtain information about the Medicaid program, contact your local Medicaid office or Department of Social Services.