Turns Out, Medicare DOES Cover Long-Term Care

Nearly 70% of Americans turning 65 will need long-term care services and support. You see this number. It shows

support. You see this number. It shows

up in finance articles, in insurance ads, and AARP campaigns. And it makes it sound like the vast majority of us are headed for long-term care or a nursing

facility, probably with a six-figure bill attached. And maybe your retirement

bill attached. And maybe your retirement plan is going to blow up somewhere around year 20. Here's the problem. That

statistic is technically true, but almost universally misunderstood. And

that gap between what it actually says and what people think it says has convinced a huge number of near retirees that they are more likely than not to

end up in a long-term care facility when the real data says something very different. And this isn't just scary

different. And this isn't just scary from a health perspective, it's scary from a financial perspective because Medicare doesn't cover this, does it?

Today, I want to do three things. First,

I'm going to show you exactly what that 70% stat includes because it's not what most headlines imply. Second, I'm going to show you how outlets covering this

topic, including some very well-known names, have taken that number and stretched it into something scarier than the research supports. And third, I'm

going to walk you through what Medicare actually pays for in this space because most people have no idea that Medicare covers a meaningful chunk of long-term

care costs. This video leans heavily on

care costs. This video leans heavily on an article from Andrew Biggs. And he's a researcher I trust because he consistently pushes back on these fear-based headlines with real numbers.

His article is linked below, and I want to give him full credit for the data we are about to walk through. You know

what's also below? The subscribe button.

And if you like videos that push back against scare tactics with real data, I hope you hit it and join me here. So,

let's dive in. Start with the definition, because how it is presented isn't really accurate. When researchers

talk about long-term care in this context, they're usually talking about something called long-term care services and supports, or LTSS. This phrase

covers an enormous range of situations.

It could be having someone do grocery shopping for you following a surgery. It

could be a 2-week stay in a rehab facility following a hip replacement. It

could be hiring someone to help out in your home, maybe with cooking and cleaning. And yes, on the other end of

cleaning. And yes, on the other end of the spectrum, it could be a full-on stay in a nursing facility. That 70% figure comes from a Department of Health and

Human Services research brief. And it

estimates that 56% of Americans turning 65 are likely to develop a condition requiring some form of long-term care.

Other methodology puts this number closer to 70%. Now, that number is not saying that seven in 10 retirees will end up in a nursing facility or long-term care facility. It is not

saying that seven in 10 retirees will require custodial care. It is describing an entire spectrum of support, and the overwhelming majority of that spectrum

is short-term, in the home, and often provided by a family member. It probably

doesn't make you panic in the same way if we say you might need help for a week following a minor surgery, compared to saying you're more likely than not to end up in a long-term care facility. So,

this really isn't a minor technicality.

So, how does a nuanced research finding turn into a panic headline? Let's look

at a couple of examples. The first is a CBS news piece from March 2025.

It opens with the 70% HHS statistic, and immediately illustrates it with a story of an 83-year-old woman with Parkinson's and dementia. She's cared for around the

and dementia. She's cared for around the clock by three generations of family.

So, this is a real story and it's pretty moving. But, notice what this article

moving. But, notice what this article does. It takes a statistic that mostly

does. It takes a statistic that mostly represents light and occasional support and anchors it to the worst possible outcome. So, by the end of the article,

outcome. So, by the end of the article, you're left thinking 70% of people are likely to end up in a situation similar to this. The second example I'm going to

to this. The second example I'm going to use is from an insurance company website. And this one is a little bit

website. And this one is a little bit more subtle. It actually defines

more subtle. It actually defines long-term care correctly. Then one

paragraph later, it states that roughly 70% of adults turning 65 will need some form of long-term care. So, it's

presenting it in a way that this figure represents the narrow definition that they just gave you, rather than the wide range of services that are actually covered by the statistics, the entire

spectrum. And this interpretation is

spectrum. And this interpretation is happening on a website that sells long-term care insurance. So, the

scarier they can make the statistic, the better it is for business. And these are just two examples. I have seen the 70% statistic show up in numerous videos and articles all across the internet. I

think there are really two explanations here. Truly, most of the media

here. Truly, most of the media presentations of the statistic, I don't think are made in bad faith most of the time. One is incentives. First and

time. One is incentives. First and

foremost, fear drives clicks. And when

we consider an insurance company, the scarier the statistic, the more urgent it makes it feel that you have to buy their product. So, this is really how

their product. So, this is really how business and content works. The other

explanation is simpler, carelessness. A

writer sees a scary number, doesn't trace it back to the actual methodology, and then tries to figure out what's the best headline we can make from this. So,

I don't think that they're doing this intentionally. I just don't think

intentionally. I just don't think they're doing the research. Either way,

the effect is the same. You end up planning your entire retirement around the worst-case scenario that really only applies to a minority of people, rather than the more common outcome. And if you

want a couple of my videos that have done some deep dives on this stat, I will link them below. Medicare is a huge piece of the retirement puzzle. Retirees

rely on it to cover their health care costs in retirement. And while we're talking about Medicare, it's a great time to mention my partner Chapter.

Chapter is a completely unbiased Medicare advisory platform. They can

help you compare Medicare Advantage plans and Medigap plans across dozens of carriers and find the plan that best fits your budget, your health care needs, your doctors, your prescriptions,

you name it. And the thing a lot of people don't realize until they're on the brink of signing up for Medicare is that it can be kind of confusing. So, it

can really help to have someone walk you through these decisions and make the best possible one for you. So, if you're on the brink of signing up for Medicare or perhaps you've already signed up and you want to consider other plans or

you're helping a family member or a friend with this big decision, give Chapter a call. I have a phone number and a link down below and just know if you use that link, I may receive compensation. And when we look at our

compensation. And when we look at our Medicare plan as we go into retirement, we tend to think that there's one big problem with it, that it doesn't cover long-term care services or support,

right? A 2025 nationwide survey found

right? A 2025 nationwide survey found that 58% of adults believe exactly that, that Medicare doesn't cover long-term care. So, you're really on your own

care. So, you're really on your own here. But, what if that isn't really

here. But, what if that isn't really true? And this is where we need to talk

true? And this is where we need to talk about what the media often leaves out.

And it comes straight from Andrew Biggs' research. Medicare does cover a

research. Medicare does cover a meaningful amount of long-term care.

There are really two categories of long-term care. The first is primarily

long-term care. The first is primarily driven by aging. You're getting older and you lose your ability to do the daily tasks and you need someone to help out Or maybe you develop a memory condition like Alzheimer's or dementia.

In this situation, you might move into a long-term care facility or a memory care facility. And in these situations,

facility. And in these situations, Medicare truly doesn't cover this. So,

this is where the line Medicare doesn't cover long-term care is accurate. The

second category is tied to a medical event. Rehabilitation after a fall,

event. Rehabilitation after a fall, skilled nursing following a hospital stay, home health after a surgery, or hospice. And Medicare does cover a lot

hospice. And Medicare does cover a lot of this. Let me use an example from

of this. Let me use an example from Biggs' article. A senior takes a fall

Biggs' article. A senior takes a fall and breaks a hip. She spends a few days in the hospital, which is fairly common at this age, and then she moves to a skilled nursing facility for a short

stint. A typical day in a skilled

stint. A typical day in a skilled nursing facility runs about $325.

For the first 20 days in that facility, she pays a one-time deductible of $1,736 and nothing more. For days 21 through

100, she pays $217 a day, with Medicare covering the rest.

The typical stay in a nursing facility is one to five weeks following a hip fracture. So, the out-of-pocket expense

fracture. So, the out-of-pocket expense here would be somewhere between $1,736 and about $5,000 in this scenario.

Medicare's skilled nursing facility benefit of 100 days matters a lot more than people might think. When we look at median stays in a nursing facility for

those who enter, maybe not due to fall, but more because they need nursing care, the typical stay is about five months.

Two-thirds of people pass away before the one-year mark. For the first 20 days, in our situation, she would pay a one-time deductible of $1,736

and nothing more. For days 21 through 100, she pays $217 a day, with Medicare covering the rest.

So, even a full 100-day stretch runs about $19,000 out of pocket rather than the $38,000 to $53,000 it could cost

with no coverage at all. Now, once those 100 days do pass, Medicare does stop paying entirely. But, here's a really

paying entirely. But, here's a really important thing. You don't get one

important thing. You don't get one stretch of 100 days. Once you leave the facility and if you're out for 60 days and then reenter, that 100-day period starts over. So, Medicare does have a

starts over. So, Medicare does have a meaningful impact here, especially when it comes to costs. Now, let's zoom out on national numbers. The Congressional

Research Service tracked total spending on long-term care services and supports in 2023. That number, $564

in 2023. That number, $564 billion.

Medicare covered 18% of that total, or roughly $102 billion.

That's still a pretty big number for services that supposedly aren't covered at all. That's more than the $81 billion

at all. That's more than the $81 billion households paid entirely out of pocket, which was only 14% of the total. When we

break it down further, the same pattern holds. In 2024, Medicare spent $47

holds. In 2024, Medicare spent $47 billion on nursing home care, which is roughly 3/5 of what Medicaid spent in that same

category. On home health services,

category. On home health services, Medicare spent $56 billion compared to the $38 billion from Medicaid. And

here's another example. A report from the Department of Health and Human Services projects that 91% of seniors will spend less than $100,000 on

long-term services and supports over their entire retirement. And about 2/3 of seniors will spend nothing out of pocket at all in this category. One more

piece based on national spending data and IRS data, seniors spent about 2% of their income on out-of-pocket nursing

care and long-term care support and services in 2023. Back in 1970, that number was closer to 4%, so this number is coming down, and it's largely because

Medicare, Medicaid, and private insurance is absorbing more of the cost.

So, let's get really clear on this.

Medicare will not pay for an indefinite stay in a care facility purely due to aging. You have to have a rehab or

aging. You have to have a rehab or medical component attached to it. If you

move into a long-term care facility, a nursing care facility, or a memory care facility based on a lifestyle choice, they will not cover that. If your only need is ongoing help with daily

activities, Medicare is not your safety net. But, if a nursing home stay or

net. But, if a nursing home stay or in-home care need is triggered by a hospitalization, surgery, or medical event, and a lot of long-term care

actually is, Medicare covers a real portion of that. And it's a lot more generous than a lot of retirement content would otherwise suggest. Let's

also fix the duration question, because long-term care implies years and years.

And for most people, that is just not accurate. For a nursing home

accurate. For a nursing home specifically, the average stay across all residents is roughly 1 year. That

number gets pulled down because a lot of nursing home admissions are due to short rehab events rather than open-ended custodial care. Assisted living tends to

custodial care. Assisted living tends to run longer, often in the range of 2 to 3 years. Memory care sits in a similar

years. Memory care sits in a similar range, though dementia-driven cases can extend well beyond that. I can interject a personal note here. My dad has vascular dementia, and we're just about

to enter year three of his care. If you

look at long-term services and supports as a whole, including care delivered at home, the average paid care duration is closer to 3 years. But, that number

includes a lot of home-based support, not 3 years inside a facility. And this

matches the real-world progression that Andrew Biggs describes. Very rarely do people suddenly enter into a nursing facility. Most people tend to follow a

facility. Most people tend to follow a progression. They might have unpaid help

progression. They might have unpaid help from a family member at home. Then maybe

they pay for someone to come into the home for a few hours at a time. If

things get worse, maybe they enter a long-term care facility. And if things progress beyond that, maybe they enter into a nursing care facility. But most

people do not reach those end stages of the progression. And none of this means

the progression. And none of this means the risk is zero. I don't want this video to swing too far in the other direction that we don't end up planning at all. Because there is a risk and we

at all. Because there is a risk and we do want to pay attention to that.

Roughly 10% of people 65 and older will need paid care lasting between two and five years. Another 4.5% will need paid

five years. Another 4.5% will need paid care lasting longer than five years. And

that smaller group is where costs can become threatening to a retirement plan, especially when you consider that the typical nursing home runs an average of over $100,000 a year. So the point is

that this risk is concentrated in a minority of retirees. It is not the median outcome. And that should

median outcome. And that should influence how you plan for it. So maybe

you don't have to plan for self-funding the worst case scenario, which might be a decade-long stay in one of these facilities. But maybe you still set

facilities. But maybe you still set money aside in case this were to ever happen. And you have real conversations

happen. And you have real conversations about it. The last piece, and this one

about it. The last piece, and this one matters even for people who think they will never touch Medicaid. There is a typical progression that can happen if someone enters a nursing facility. Maybe

they private pay in their initial entry after a Medicare covered short rehab stay. If they end up staying for years

stay. If they end up staying for years and their assets get depleted, often they transition to Medicaid. But this

transition may not be what you think. If

the facility is Medicaid certified, the resident generally does not have to leave and often does not even have to change rooms when they transition from private pay to Medicaid. Federal nursing

home regulations restrict when a facility can involuntary charge a patient and one of the areas it specifically addresses is when this patient becomes Medicaid eligible. And

keep in mind that a Medicaid certified facility is not the same thing as a straight Medicaid facility. It could

very well be the exact same facility that was charging you $100,000 or more a year when you were doing private pay.

For example, my dad is in a facility that costs about $10,000 a month, but it is Medicaid certified and if he were to fully deplete his assets, Medicaid would kick in and he would not have to leave

the facility or his room. So, the big takeaway here is that if you have a loved one or a family member that is entering into a nursing facility, make sure you ask if it is Medicaid certified

and to what extent, even if you're going to do private pay at first. Choosing a

facility that accepts Medicaid from day one means that if the stay runs longer than expected and assets are depleted, you would not have to move your loved

one from this facility. The 70% stat that is often presented is incomplete on its own and that incompleteness has done real damage to how people plan for

retirement, pushing an entire generation of near retirees toward panic-driven saving and decisions based on a worst-case scenario that applies to a relatively small share of the

population. So, here's a better

population. So, here's a better interpretation. For most seniors, the

interpretation. For most seniors, the aging process is handled independently.

Some do rely on family and friends for some mild support. Maybe they even get to the point where they're having paid help in the home. For most people, it does not involve a long-term stay in a

facility and if we get to that point, for the vast majority of people, the stay is measured in months rather than years. Medicare does cover a real share

years. Medicare does cover a real share of long-term care services and supports, but it does not cover those primarily driven simply due to aging and lifestyle

choices. And Medicaid can be a useful

choices. And Medicaid can be a useful backstop even though it does have limitations. Now, I don't want you to

limitations. Now, I don't want you to ignore long-term care in your planning, but I hope this helps to make the planning more accurate and less fearful.

Huge credit to Andrew Biggs for the research behind most of the numbers in this video. Again, I will link his full

this video. Again, I will link his full article below along with the other pieces we walked through today. And if

someone in your family has walked through this progression and if you're comfortable, maybe you share a little bit about that story down below. It can

help others and I do read every comment.

I post new videos every single week and if you got anything at all out of this one, please give it a like. If you're

new here, please consider subscribing and if you know of someone who might get something out of this type of content, please consider sharing. And I do want to say that if your finances have gotten

to a point that you no longer want to DIY your approach or maybe there's a level of complexity that you don't feel like you can comfortably handle this independently, I work with Root

Financial. They have a wonderful team of

Financial. They have a wonderful team of advisers who can help you through this process. So, I will link them down below

process. So, I will link them down below and I will see you guys in the next one.

Let's nail this on the first try. My

hair is like frizzy right here. It is so humid. I keep putting gel in, but like

humid. I keep putting gel in, but like we don't want it to look crusty. It's a

fine line.

Frizz or crusty? Like

man, maybe I just need better hair products.

[laughter] It shows up in retirement. Retirement.

Well, we didn't make it through on the first try. Maybe the second one. Here we

first try. Maybe the second one. Here we

go. Number three.

[laughter] I didn't know if I had that extra finger up because I can't feel my right hand.

I'm in pain. Oh my goodness.

[gasps] It shows up in [laughter] It's a great start to a Monday.

Yeah, it's Monday. I'm filming three videos today. I can feel this hand.

videos today. I can feel this hand.

[music] Garbage trucks are going to be driving by. So.

by. So.