Family caregivers are often shocked to learn that Medicare does not pay for the type of care most beneficial to family members who need care and support to remain at home.  Medicare A and B pay for hospitalizations, rehabilitation in nursing homes, medical care and procedures and medical office visits.  When individuals age and need help with physical activities, like bathing, dressing, toileting and continence and support walking and moving about safely, this type of care often called custodian care, is paid for privately.  One exception to this guideline is long term care insurance.

Individuals with foresight and planning who purchase long term care insurance are able to use these policies to reimburse for the type of care that Medicare does not; custodial care and assistance with activities of daily living.  Long term care insurance pays for a variety of support and assistance:  in home care, day programs, assisted living and skilled nursing care.  Long term care insurance provides individuals with a wide range of options for care that allow greater choice in where care is provided.  Long term care insurance supports independence.  These policies also allow individuals to preserve retirement savings as policies are purchased for a number of years with a corresponding financial limit.

Early policies were often limited to narrow types of care, for example nursing home only policies.  Individuals often failed to purchase inflation protection which means that policy values increase each year with inflation.  Inflation protection, usually set at 5% per year, increases annual policy premiums.  Yet without this protection plans will be unable to keep up with annual costs of care and by the time a policy is accessed the daily amount payable will be at a rate so low that the policy owner is paying for the majority of care costs.

The benefit of knowing that Medicare does not pay is that caregivers will understand the importance of long term care planning and rather than relying on the Government to pay for care, will take the initiative to plan for paying for their own care.

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