Medicare Long-Term Care Benefits, Eligibility, and Reform

Introduction to Long-Term Care and Medicare

Long-term care is defined as "a variety of services that includes medical and non-medical care to people who have a chronic illness or disability" (HHS.gov, 2009). Medicare has contributed substantially to the well-being of the nation's elderly and people with disabilities. Over the past four decades, Medicare has helped to improve the health of its beneficiaries and support their financial well-being. However, Medicare also has significant gaps. Chief among them is the fact that Medicare does not pay for long-term care in a comprehensive sense. While Medicare does pay for nursing home and home care services, it is designed primarily to cover treatment of acute, short-term illness. These services are available only to beneficiaries who need skilled nursing care or therapies and are often time-limited (Georgetown University, 2007).

Nearly one-third of individuals receiving Medicare benefits "has some physical or cognitive limitation that makes it difficult for them to perform certain activities of daily living, such as getting dressed, moving around the home, and using the bathroom." Medicaid is available to provide assistance to some Medicare beneficiaries who are poor or who cannot afford the high cost of long-term care services, but most long-term care remains a family responsibility. Individuals and families provide a substantial amount of unpaid care and pay for care out of personal resources. Long-term care accounts for the single largest out-of-pocket expense of Medicare beneficiaries (Georgetown University, 2007).

Medicare Nursing Home and Home Health Care Benefits

Medicare pays for most of the medical care costs of people who need long-term care service providers — including home health agencies and nursing homes. However, Medicare's coverage of home care and nursing home care is very limited (Georgetown University, 2007). Medicare pays for up to one hundred days of nursing home care for beneficiaries with a prior hospital stay who need skilled nursing care or rehabilitative therapy. Medicare covers the full costs of care for the first 20 days of a nursing home stay. After the first twenty days, beneficiaries make a substantial copayment of $124 per day (as of 2007) (Georgetown University, 2007).

Medicare also pays for home health care; however, these services are limited to people with skilled care needs. Requirements include that the beneficiary must be homebound, must need intermittent skilled nursing or therapy services, and must be under the care of a physician who prescribes their plan of care. Home health aide services covered include:

(1) assistance with dressing; (2) assistance with transferring; (3) assistance with toileting; and (4) other activities of daily living (Georgetown University, 2007).

Individuals who do not have skilled care needs but who nevertheless require assistance completing daily activities are not eligible under Medicare to receive home health care (Georgetown University, 2007).

Figure 1 below shows Medicare Spending by Service (2005), and Figure 2 shows Medicare's Share of Long-Term Care Spending (2005). These figures illustrate the relatively modest portion of long-term care costs that Medicare directly finances.

Eligibility for Medicare

The Centers for Medicare & Medicaid Services (CMS) administers Medicare. Medicare is the United States' largest health insurance program, covering nearly 40 million Americans (HHS.gov, 2009). Generally, an individual is eligible for Medicare if they or their spouse worked for at least 10 years in Medicare-covered employment, if the individual is at least 65 years of age, and if the individual is a citizen or permanent resident of the United States. Eligibility can be verified through the official Medicare eligibility tool available on the Medicare.gov website by entering personal information that helps establish coverage status.