Deciding which long-term care services are best suited for us depends on having a knowledge of those services, as well as a willingness and ability to pay for them. When thinking of what financing is available, we may make assumptions that are inaccurate. For instance, someone may assume that original Medicare covers long-term care services, though the reality is much more complicated. The resources for paying for long-term care may change depending on someone’s financial situation or care needs over time.
We want to share the basic information you should know about paying for long-term care.
Activities of Daily Living (ADLs) and Instrumental Activities of Daily Living (IADLs)
ADLs and IDLs are activities that determine an individual’s ability to live independently and to their fullest. When an individual requires a level of assistance with IDLs such as shopping, housekeeping, or money management, they may seek outside resources to maintain their independence at home. However, when individuals need assistance with ADLs such as bathing, dressing, or moving from a seated to a standing position, those needs may require a higher level of care.
If a higher level of care is needed, one should consider long-term care services provided at home or in a facility. Both IDL and ADL services are considered custodial, non-medical services that are provided by individuals without professional medical training or licensing. These services are typically more difficult to finance and usually require out-of-pocket costs.
Original Medicare vs Medicare Advantage
Original Medicare Part A and B do not cover long-term care services unless medical care is needed and prescribed. Therefore, they do not cover services related to ADLs or IDLs.
The eligibility rules are complex. For example, original Medicare Part A and B will only pay for services prescribed by your Medicare-assigned physician for skilled level medical care either in the home or at a facility that is for part-time or short-term care. These services are provided by a licensed clinician.
As of 2018, Medicare Advantage plans have more flexibility to provide supplemental benefits that address the social and environmental factors of Medicare beneficiaries. The most popular supplemental benefits in 2020 included non-medical transportation services, food and produce, and even pest control. The benefits of every Medicare Advantage plan vary by state. There is more flexibility over original Medicare Part A and B to provide services related to ADLs or IDLs. These services are expanding and will continue to develop. In fact, some Medicare Advantage plans may cover partial adult day care services.
Original Medicare Part A and B have less flexibility for long-term care services than Medicare Advantage. It is important to evaluate your or your loved ones needs and identify the resources that are available.
Medicaid
Medicaid is the nation’s primary payer for long-term care services. As of February 2024, 83,387,167 million Americans were enrolled in Medicaid. Through Medicaid, low-income families including children and pregnant women, individuals with disabilities, and the older adult population, receive health coverage and long-term care services.
Medicaid will cover most long-term care costs from medical services to non-medical services. Administered by the states, with Medicaid each state has different eligibility requirements and waiver programs. Waiver programs help provide community services to eligible individuals that require skilled nursing level care. There are Medicaid-funded programs for adult day care that are included in the state health plan. Be sure to research what services are available within your state.
Some examples of long-term care services Medicaid covers in the community:
Adult day care services are provided to older adults in a group setting in a community center. These services are provided during the day time and include caregiver relief. While each state is different, generally there are three types of adult day care services. Some states may provide more or less comprehensive services.
- Social Adult Day Care—Adult Day Services—focuses on quality of life through recreational and social activities and meals. They typically do not provide medical services.
- Adult Day Health Care—Adult Day Medical Care—provides medical services such as medication management, assistance with activities, and other therapies. In addition to the medical services, it also provides social interactions and nutritious meals.
- Specialized Adult Day Care is generally for Alzheimer’s patients or those with other dementias. The focus with this care is to decrease agitation and prevent wandering and injury. Additionally, it also provides nutritious meals.
Program of All-Inclusive Care for the Elderly (PACE) programs provide comprehensive medical, non-medical and social services to older adults with chronic care needs that live in the community. Most individuals that are eligible for PACE services are frail older adults who are enrolled in both Medicare and Medicaid. PACE programs are provided in a community center and usually provide transportation to and from the center. The PACE program has an interdisciplinary team of health professionals that coordinates care for the older adult.
