The official average cost of one day of nursing home care in Pennsylvania (2025) is $399.80. This amounts to over $12,000 each month or close to $146,000 a year! And, to the surprise of many, Medicare and health insurance don’t pay for this. There are helpful financial products persons can buy when healthy and before the need for care arises to help offset this cost. But for most seniors, these financial products are not enough, both in terms of how much they pay out and how long they last. Ask yourself what $150,000 – $180,000 a year (typical actual cost in many parts of Pennsylvania) in unreimbursed long-term care costs would do to your retirement plan.
When Money Runs Out Long-Term Care Costs Defer to Medical Assistance Programs
So, what happens if someone’s money runs out and he or she can no longer pay for needed long-term care? Medicaid, also called Medical Assistance, a federal program administered by each state, steps in. Medicaid will pay for long-term care for as long as needed without any monetary cap. But impoverishment is the price for admission to the Medicaid program. For all but the very wealthy, prudent retirement and estate planning must include legal measures to protect against the catastrophic cost of long-term care by enabling one to qualify for Medicaid while preserving home and savings for loved ones.
But what about Medicare? Don’t confuse this with Medicaid. Medicare is health insurance for the elderly (age 65 or older) and for younger persons who are disabled workers or their dependents. It pays for medically necessary “acute,” that is, short-term, care such as that provided by doctors and hospitals. It is operated and funded in full by the federal government, primarily through tax dollars and, to a lesser extent from premiums paid by recipients.
Medicare does pay for physician-prescribed rehabilitation services in a nursing home to a very limited extent, IF the following conditions are met:
- An immediately-prior 3-day hospitalization (“observation status” stays don’t count)
- For a maximum of 100 days (usually terminated on or before 30 days)
- With a co-pay after day 20 of $209.50 (2025) per day
Private health insurance, so-called “Medigap” or “Medicare Supplemental Health Insurance,” helps only to the extent of picking up Medicare deductibles and co-pays. The $209.50 co-pay referenced above does not cover those with policies not classified as Plan C or better. When Medicare ends private health insurance also ends.
