One of the first questions people ask when they begin to explore senior living options is whether Medicare covers those costs. If the question pertains to independent or assisted living, the straightforward answer is that Medicare does not provide coverage for these services.
From there, however, the topic becomes a little more complicated. Paul T., regional director of operations at The Goodman Group, explains. “Medicare isn’t designed to pay for long-term senior living. It’s really for short-term, hospital, and post-hospital care,” he says.
In addition, for post-hospital care, certain requirements must be met. “One of the requirements is that you have to have a three-night hospital stay," Paul says. "That event qualifies you for skilled nursing benefits under traditional Medicare as long as that admission to a skilled nursing community occurs within 30 days.” That qualifies you for care as long as there’s a continued need for that skilled care, according to Paul. He adds, “It can cover up to 100 days, although the average stay is more like 30 days.”
Often the next question is, “Then what does Medicare cover?” Here’s a quick summary of how Medicare works and its basic benefits. Use the links to Medicare.gov, Medicare’s website, to get more detailed information.
Medicare Part A
According to the Medicare.gov website, Medicare Part A is hospital insurance that covers inpatient hospital care, skilled nursing (such as rehabilitation services following a surgery or accident), lab tests, surgery, home health care (under certain circumstances), and hospice care. The Medicare website lists the following coverage specifics:
In general, Part A covers:
Medicare Part B
Medicare Part B covers non-hospital medical services that are needed to diagnose and treat medical conditions and illnesses. This includes visits to doctors and other health care providers. It usually includes preventative services such as immunizations and an annual physical. With many policies, preventative services are provided without additional cost to you as long as you are seen by providers in the coverage network. The Medicare website lists the following coverage specifics:
In general, Part B covers:
- Clinical research
- Ambulance services
- Durable medical equipment (DME)
- Mental health
- Getting a second opinion before surgery
- Limited outpatient prescription drugs
Keep in mind that Medicare Part B does not cover 100% of costs. As a result, many people decide to buy supplemental insurance to cover Part B costs that are not covered by Medicare. These are often referred to as “supplemental Medicare” or “Medigap” plans.
Together, Medicare Part A and Part B are often referred to as “original or traditional Medicare” and occasionally as “Medicare Part C.” The specifics of coverage and benefits—both Parts A and B—are determined by:
- Federal and state laws
- Medicare decisions on whether or not something is covered
- Claims processing decisions made at the state level
Medicare Part D
Medicare Part D covers prescription drugs. In general, that means most drugs that you would receive from a pharmacy and take at home. Infusion drugs, such as chemotherapy, that are administered in a medical setting are, in general, covered by Part A. Part D benefits will vary by plan, and costs are dependent on the drugs that you take. There are two types of Part D plans.
Medicare Part D Plan
This is a stand-alone drug plan with its own premium, deductible (if applicable), out-of-pocket maximums, and benefits that are separate from original or supplemental Medicare coverage.
Medicare Advantage Plan
This is a type of supplemental Medicare policy that includes prescription drug coverage.
There are different ways that Part D works with other insurance coverage—such as employer or union health coverage—that you may want to explore.
Long-Term Care Insurance
If you're looking for long-term care insurance, usually skilled nursing care that extends past the 100 days covered by Medicare Part B, you have two options: Medicaid or private insurance.
Medicaid is a separate plan that is administered at the state level for those who otherwise cannot afford necessary medical care. States receive federal funding and have their own laws and regulations as to eligibility. If a community accepts Medicaid, it would pay for things like room and board. But every state does it differently. All states accept Medicaid for skilled nursing communities, but only some accept it for assisted living.
The Medicaid policy varies widely from community to community. For example, some assisted living communities fully accept Medicaid as a means of payment while others limit the number of units available to people using Medicaid. To learn if your state accepts Medicaid for assisted living and to locate communities that participate in the assistance program, visit the Medicaid website.
Another option is a private long-term care insurance policy. Paul notes, “These have become more common in the last 20 years. They pay a certain amount per day toward care needs.” In some cases, he adds, these policies cover home health care, but more commonly skilled nursing.
Shopping for Medical Coverage
Medicare is a complex topic, and this article covers only the basics. Whether you're new to Medicare or exploring supplemental plans like Medigap, it’s important to take time to compare all available options. Plans can vary significantly in both cost and benefits, and not all policies are offered nationwide.
The Medicare website contains a wealth of information to get you started. Click on any of the following links to start researching your options.
You may also want to contact insurance companies that offer Medicare coverage in your area, a medical insurance agent, or your healthcare provider to learn more about your options for comprehensive health coverage.
