Share/BookmarkPrint Entire Section

Medicare and Long-Term Care

Medicare, shaped by its creation at a time when the great fear was being bankrupted by a stay in the hospital, protects only against short spells of illness.

In Round Pegs and Square Holes: Medicare and Chronic Care, a report for the NASI Study Panel on Medicare and Chronic Care in the 21st Century, Bruce Vladeck (who ran the program under the Clinton Administration) writes, "Medicare, true to its origins, still does not cover services viewed as primarily 'custodial,' which it interprets as those services designed to assist impaired individuals with activities of daily living in any way not integrally connected to an identifiable acute illness or problem. Medicare's non-coverage of long-term nursing home care is the most widely recognized manifestation of these old conceptual habits,” according to Vladeck.

“The convoluted lines drawn in Medicare home care between ‘skilled' services, which Medicare will pay for, and ‘custodial' services, which Medicare will not pay for, are often even more frustrating and illogical,” he wrote. “These statutory limitations reflect Medicare's bias toward covering care according to the acute care model—a series of targeted, staccato, specific clinical interventions on behalf of someone who is temporarily incapacitated, rather than continuous interdisciplinary care."

Example: Mrs. Mathilde Jackson is suffering from progressive memory loss. She often leaves her apartment, wanders the neighborhood, and forgets how to return home. Once she almost started a fire in the apartment because she left the stove unattended. Luckily, a neighbor was visiting and smelled smoke in the kitchen. Mrs. Jackson's daughter takes her to a doctor, who gives her a physical examination, asks a series of screening questions and diagnoses incipient Alzheimer's disease. Mrs. Jackson's daughter places her in a nursing home. She does not have any acute ailment, and Medicare will not pay for any of the nursing home bills. Mrs. Jackson has long-term care expenses, but they are a personal responsibility for her and her family.

If Mrs. Jackson “spends down,” i.e., uses all her financial resources (checking accounts, savings accounts, stocks, and bond) for the nursing home (except for $2,000) she will qualify for Medicaid. This is the federal-state program for the poor, and Medicaid will pay for the nursing home, once she has used all but $2,000 of her resources. All her pension and Social Security income will be devoted to the nursing home bills. She is allowed to keep a personal allowance of $35 a month.

For a more detailed discussion of Medicare and long-term care related issues, see: