Most Americans think Medicare covers long-term care, the regimen of daily help that many seniors will eventually require.\u00a0<\/p>\n
It does not.\u00a0<\/p>\n
That basic misunderstanding has retirement experts worried. It suggests millions of Americans may have no plan to cover the high costs of aging.\u00a0\u00a0<\/p>\n
Long-term care is a range of services for people who need help with everyday activities, such as bathing, dressing or eating. More than 80% of us will need that help<\/a> at some point, according to a recent study from the Center for Retirement Research at Boston College.\u00a0\u00a0<\/p>\n Americans are badly misinformed about the basics of long-term care, a point driven home in numerous surveys and studies. One of the latest, released in June<\/a> by Nationwide, found that 58% of U.S. adults wrongly believe Medicare covers long-term care.\u00a0\u00a0<\/p>\n \u201cSeventy percent of the people who reach 65 are going to need long-term care,\u201d said Holly Snyder<\/a>, president of Nationwide Life Insurance. \u201cAnd if you get there, people seem to think there are public safety nets that will take care of you.\u201d\u00a0<\/p>\n Long-term care costs can be staggering<\/p>\n Many seniors need long-term care for years. Costs can be staggering. The average assisted living facility charges $5,350 a month<\/a>, according to T. Rowe Price. A typical nursing home charges $9,733.\u00a0<\/p>\n Those prices should alarm older Americans. The problem, according to Snyder and others, is that many people assume Medicare will cover them.\u00a0<\/p>\n \u201cPeople just don\u2019t distinguish between long-term care and health care,\u201d said\u202fGal Wettstein<\/a>, a senior research economist at Boston College.\u202f\u202f\u00a0<\/p>\n Some confusion is natural. Medicare, the federal health insurance program for seniors, does cover some short stays in nursing homes<\/a>.\u00a0\u00a0<\/p>\n But Medicare generally does not cover longer stays. The reason: Most long-term care is not considered medical care.\u00a0\u00a0<\/p>\n \u201cSomeone to make sure Mom eats her food, takes her medicine and, when she wakes up, she doesn\u2019t walk out the door: That\u2019s custodial care,\u201d said Patrick Simasko<\/a>, an elder law attorney in Michigan.\u00a0\u00a0<\/p>\n And here\u2019s where things get really confusing: While Medicare doesn\u2019t cover most long-term care, Medicaid does.\u00a0<\/p>\n Medicaid, the government health insurance program for Americans of limited means, generally covers long-term care for seniors who spend down their assets. In fact, Medicaid is the nation\u2019s largest payer<\/a> of long-term care.\u00a0\u00a0<\/p>\n Many Americans \u201cconfuse Medicare and Medicaid,\u201d Simasko said.\u00a0<\/p>\n Why don’t more Americans have long-term care insurance?<\/p>\n The pervasive belief that Medicare covers long-term care may also help explain why so few Americans own long-term care insurance.\u00a0<\/p>\n Long-term care insurance does just what the name implies: It covers costs of long-term care. Yet, by one industry estimate<\/a>, only about 4% of older Americans hold policies.\u00a0\u00a0<\/p>\n Why do so few Americans purchase long-term care insurance?\u00a0<\/p>\n \u201cBecause so many people think Medicare covers it,\u201d Wettstein said. \u201cThey don\u2019t want to buy a product that they think they already have.\u201d\u00a0<\/p>\n The notion that Medicare covers long-term care is one of several prevalent misconceptions about the costs of aging.\u00a0<\/p>\n In the Nationwide survey, 41% of respondents said they doubt they will live long enough to use long-term care insurance. In fact, most seniors will eventually need it. The Nationwide survey reached 1,324 adults, ages 29 and up, with household incomes of at least $75,000.\u00a0<\/p>\n Another survey<\/a>, fielded in 2024 by the Employee Benefit Research Institute (EBRI), found that only 4 in 10 workers believed they would need long-term care.\u00a0\u00a0<\/p>\n In that survey, employees also vastly underestimated the costs of long-term care, with most believing the tab would not exceed $50,000.\u00a0<\/p>\n \u201cThere\u2019s been so much focus on saving for retirement, accumulation, but there\u2019s not much talk about addressing the risks associated with aging,\u201d said\u202fBridget Bearden<\/a>, research and development strategist at EBRI.\u00a0<\/p>\n Americans underestimate long-term care as a retirement risk<\/p>\n Many older Americans underestimate long-term care as a retirement risk. In a 2024 survey of affluent older Americans, Boston College researchers found<\/a> long-term care ranked fifth among financial worries in retirement, behind stock market turbulence, Social Security cuts and other concerns.\u202f\u00a0<\/p>\n Many Americans don\u2019t grasp the implications of tapping Medicaid to cover long-term care, Wettstein said. To qualify for the benefit, as a rule, you must spend all of your money.\u00a0\u00a0<\/p>\n \u201cIt\u2019s an insurance product that has \u2018everything you own\u2019 as a deductible,\u201d Wettstein said. \u201cYou have to spend everything you own in order to use it.\u201d\u00a0<\/p>\n Medicaid requirements yield a long-term care industry of haves and have-nots, according to Wettstein and others. Only affluent Americans can easily afford long-term care costs out of pocket. And only impoverished Americans get it for free.\u00a0<\/p>\n \u201cWhen you get old, you\u2019d better have a lot of money, or you\u2019d better be broke,\u201d Simasko said. \u201cIt\u2019s those in-between people who are having a hard time.\u201d\u00a0<\/p>\n If this report has you worried about long-term care, here are a few expert tips.\u00a0<\/p>\n Consider long-term care insurance\u00a0<\/p>\n Many Americans consider long-term care insurance prohibitively expensive, Snyder said.\u00a0\u00a0<\/p>\n In fact, long-term care policies come in many varieties. Costs rise and fall dramatically according to the dollar amount of the benefit, the length of care covered, and other variables.\u00a0\u00a0<\/p>\n A typical policy, providing a $165,000 benefit for a single adult of 55, might cost $950 a year for a man, $1,500 for a woman, the National Council on Aging reports<\/a>.\u00a0\u00a0<\/p>\n One big drawback to many traditional long-term care policies: You collect no money if you get no care.\u00a0\u00a0<\/p>\n But the industry is evolving. Under various \u201chybrid\u201d policies<\/a>, if you don\u2019t exhaust the long-term care benefits, they go to your beneficiaries when you die.\u00a0\u00a0<\/p>\n Shop around for long-term care\u00a0<\/p>\n Long-term care costs vary widely depending on where you live. Assisted living costs average<\/a> $8,093 a month in Albany, New York, but only $4,600 in Boulder, Colorado, according to the National Council on Aging.\u00a0\u00a0<\/p>\n