Does Medicare Pay for Long-Term Care?

A research-focused look at care costs, coverage limitations and the effect long-term care can have on retirement assets.

Long-term care is not synonymous with a nursing home. It can include help with activities of daily living at home, adult day services, assisted living, memory support and nursing-home care. Medicare states plainly that it does not pay for most long-term custodial care when that is the only care a person needs. Medicare may cover limited skilled services when its conditions are met, but that is different from paying for years of ongoing help with bathing, dressing, eating, transferring or supervision.

The financial scale can be substantial. CareScout’s 2025 national medians report a non-medical caregiver at $35 per hour, or about $80,080 per year when modeled at 44 hours per week; assisted living at $6,200 per month, or $74,400 per year; a semi-private nursing-home room at $114,975 per year; and a private room at $129,575 per year. Actual costs vary materially by geography, care intensity and provider, but these figures show why long-term care is a retirement-income issue as much as a health issue.

Why the confusion happens

Medicare does cover many medical services used by older adults, and Part A can cover skilled nursing-facility care for a limited period when eligibility requirements are satisfied. That leads some families to assume Medicare will also pay for an extended nursing-home stay or years of help at home. Medicare’s own guidance says otherwise: long-term custodial care is generally not covered when it is the only care needed.

Skilled care and custodial care are different

Skilled care involves medical or rehabilitative services requiring trained professionals. Custodial care is assistance with everyday activities such as bathing, dressing, eating, toileting and transferring. Someone can need extensive, expensive custodial assistance without needing daily skilled medical treatment. That distinction is central to understanding the coverage gap.

Home health coverage is also limited

Medicare may cover qualifying part-time or intermittent home health services under specific conditions, but it does not generally pay for 24-hour home care, meal delivery or personal care when personal care is the only service needed. Families planning to “age in place” should therefore estimate the cost of non-medical support separately from Medicare-covered medical care.

How families commonly fund the gap

Options can include personal savings and retirement income, unpaid family caregiving, long-term-care insurance, life-insurance or annuity contracts with qualifying care benefits, Medicaid for eligible individuals, and combinations of these approaches. Each has tradeoffs. The purpose of planning early is to decide which resources should absorb the risk before a care event forces decisions under pressure.

References & further reading

1. Medicare.gov, Long-Term Care Coverage.
2. Medicare.gov, Nursing Home Care.
3. CareScout, 2025 Cost of Care Survey.