What Does Medicare Cover, Anyway?

Medicare is the health insurance program run by the federal government for those who are 65 and older, as well as those under 65 who are disabled and collect Social Security Disability Insurance (SSDI).

When people learn that they need post-hospital care – home care, inpatient rehabilitation or a stay in a nursing home – they often assume that Medicare covers these services. But much like private insurance, there are limitations on the services that Medicare will cover.

Before you need this level of care, here is an overview of exactly what Medicare will cover.

If you are 65 or over you likely have Medicare coverage A and B. Medicare coverage part A is “hospital insurance.” It covers care you receive in the hospital. Skilled nursing (nursing home) or rehab care is covered ONLY if:

  • Your care is “medically necessary.”
  • You are expected to improve over time
  • You meet the 3 DAY inpatient hospital stay. This means you must be FORMALLY ADMITTED to the hospital. If you are in the emergency room for three days but not admitted to the hospital, or you are admitted to an “observation unit,” you will not receive insurance coverage for your rehabilitation or skilled nursing care.

Even if you feel you have great insurance to fill in the gaps of Medicare A and B coverage, if you do not satisfy the three-day admission rule, there is likely no insurance that will cover your rehabilitation or skilled nursing care.

How Much is Covered?

If you meet the three-day admission requirement, the first 20 days you spend in a skilled nursing facility is fully covered. On days 21 – 100, you are responsible for a co-pay of $167.50 per day. After the 100th day, you are responsible for all costs related to your stay in a skilled nursing facility.

What Isn’t Covered?

Custodial care, which provides assistance with performing the basic tasks of daily living, such as dressing, bathing or eating, is typically not covered by Medicare at all. You are responsible for the full cost of this type of care, which on Long Island can run upwards of $100,000 a year.

Questions? A healthcare advocate can help you navigate the system in order to maximize your benefits and help you sort out your options for care and payment.

You can learn more about Medicare Part A hospital and skilled nursing facility coverage. Visit medicarerights.org for additional information. Care Answered is available to answer your questions and help you make the best decisions based on your individual situation and needs. Contact us here or call (516) 584-2007.

 

Do you need a long-term care policy?

The statistics are staggering: up to 75% of those 65 and over may require a stay in a nursing home at some point in their lifetime[1]. Long Island is the most expensive region in the state to receive nursing home care; here it can cost an average of $390/day or $142,350[2] each year.

None of us is exempt; any illness or injury that robs us of the ability to care for ourselves can create the need for some type of long-term care at home, in an assisted living facility or a nursing home.

To help prepare for this possibility and protect their family’s assets, many people elect to purchase long-term care insurance or have a long term care rider on their life insurance policy. Long-term care insurance may cover some or all of the costs of care at home or in a facility.

“A long-term care insurance policy gives you a cushion to help prepare for the future financially without using the majority of your assets in a short period of time,” says Bonnie S. Laffie, CLU, ChFC, CLTC, a Long Island-based Investment Advisor Representative.

In addition to helping protect income and assets, some long-term care insurance premiums may be tax deductible. On the federal side, 10% of long-term care premiums are deductible up to certain limits that vary according to the taxpayer’s age. For example, those aged 40 and under may deduct up to $410; those 41 to 50 may deduct $770; between the ages of 51 and 60 the number jumps to $1530; and those between 61 and 70 may deduct $4090. Over the age of 70, the premium deduction is $5110[3].

Many people believe that there are government programs that will cover the cost of long-term care. Medicare will cover nursing home care for a limited time following a hospital stay of three days. Medicaid does provide coverage of some home care and nursing home care, however recipients are required to spend their own income and assets before they qualify for Medicaid. In this situation, the savings that you may have worked hard to accumulate will have to be spent down[4].

If you are considering purchasing long-term care insurance, speak with your financial advisor, lawyer, estate planner, and/or tax professional in order to fully understand your options. Care Answered can suggest some of afore mentioned professionals who have successfully assisted our clients.

Care Answered can help you navigate the healthcare system to select the most appropriate care setting should you need to obtain long-term care, either with or without a policy.  If you already have a long-term care policy and want to submit your claim, call us first to advocate for the full coverage you need. Contact us at any time.

[1] Genworth Financial, quoting 2015 Medicare & You Handbook, Centers for Medicare & Medicaid Services

[2] New York State Department of Financial Services: The Cost of Long Term Care in New York, http://www.dfs.ny.gov/consumer/ltc/ltc_about_cost.htm

[3] Deductibility of Long Term Care Insurance and the 2017 Limits, Ronald Fatoullah & Associates, https://www.elderlaw-newyork.com/deductibility-or-long-term-care-insurance-and-the-2017-limitations/

[4] Genworth Financial