Key Takeaways
- Long-term care means help with daily activities like bathing, dressing and eating, at home, in assisted living or in a nursing home.
- Medicare generally doesn’t pay for long-term custodial care; it covers limited skilled care after a qualifying hospital stay.
- Medicaid pays for nursing home care for people who meet strict income and asset limits, with a look-back on asset transfers.
- Other ways to pay include savings, long-term care insurance, hybrid life insurance policies and veterans benefits.
- Plan early, and make sure powers of attorney are in place so someone can manage care and finances.
What is long-term care?
Long-term care is ongoing help with “activities of daily living” (bathing, dressing, eating, using the toilet, moving around) or supervision because of cognitive decline. It’s provided:
- At home, by family or paid aides
- In adult day programs
- In assisted living communities
- In nursing homes (skilled nursing facilities)
Costs vary widely by location and level of care, and nursing home care is the most expensive.
Who pays for what?
| Source | What it may cover | Key limits |
|---|---|---|
| Medicare | Short-term skilled nursing or rehab after a qualifying hospital stay; some home health | Not ongoing custodial care |
| Medicaid | Nursing home care; some home and community-based care | Strict income and asset limits; look-back on transfers |
| Long-term care insurance | Care at home, assisted living or nursing home, per policy | Must buy before health declines; premiums can rise |
| Hybrid life or annuity policies | Long-term care benefits with a death benefit | Higher upfront cost |
| Veterans benefits | Certain care costs for eligible veterans and spouses | Service and financial requirements |
| Personal savings and home equity | Anything | Can be depleted quickly |
Medicare’s limits
Medicare is health insurance for people 65 and older, not long-term care insurance. It may cover a limited period of skilled nursing or rehab after a hospital stay, and some intermittent home health care, but it generally doesn’t pay for help with daily activities over the long term.
Medicaid and the look-back
Medicaid can pay for nursing home care once someone qualifies financially. Because people might give away assets to qualify, Medicaid reviews transfers made during a look-back period before applying; gifts during that period can delay eligibility. Rules vary by state and are complex, so this is an area where an elder law attorney is worth consulting. See the Medicaid look-back period explained.
Planning steps to take now
- Talk about preferences: where would your parent want to receive care?
- Review finances and insurance, including any long-term care policy.
- Sign powers of attorney so someone can manage finances and benefits applications. See power of attorney for an elderly parent.
- Sign health care documents: a health care POA, HIPAA release and living will.
- Get advice early if Medicaid may be needed, since timing matters.
Frequently asked questions
Generally no. Medicare doesn’t cover room and board or custodial care in assisted living.
Only for limited skilled nursing or rehab after a qualifying hospital stay, and only for a limited time. Long-term custodial care in a nursing home isn’t covered.
Rules vary. A home is often exempt while a parent or spouse lives there, but states may seek repayment from the estate after death. An elder law attorney can explain your state’s rules.
It depends on age and health. Premiums rise with age and coverage may be denied after a diagnosis, so it’s best considered in your 50s or early 60s.
No. A revocable living trust doesn’t protect assets from long-term care costs or Medicaid. Some irrevocable trusts can, if set up well in advance.
Keep reading
- Caring for Aging Parents: The Legal and Planning ChecklistA practical checklist for adult children helping aging parents: the legal documents to sign, the conversations to have, and how to plan for care and costs.
- Legal Planning After a Dementia DiagnosisAfter a dementia or Alzheimer's diagnosis, there's often still time to sign a power of attorney, will and advance directive. Here's what to do, and in what order.
- How to Talk to Your Parents About Estate PlanningPractical tips and conversation starters for talking to aging parents about wills, powers of attorney and end-of-life wishes, without it feeling like a takeover.
- How to Access a Parent’s Medical Records and Talk to Their DoctorsAdult children don't automatically have access to a parent's medical information. Learn how HIPAA releases, health care POAs and personal representative rules work.
- Medicaid Look-Back Period ExplainedThe Medicaid look-back period reviews gifts and transfers made before applying for long-term care coverage. Learn how it works, what triggers a penalty and common exceptions.
Don’t leave your family guessing
Put your health care wishes in writing with a living will, HIPAA release and medical authorization. The No Brainer Box adds a last will, a revocable trust and health care and financial powers of attorney.
- Answer a few simple questions online
- Download your completed, ready-to-sign forms
- Sign them and keep copies in your account
This guide is general educational information written by the No Brainer Forms Team. It is not legal advice, and No Brainer Forms is not a law firm. Laws and signing requirements vary by state; for advice about your situation, talk to a licensed attorney in your state.