What Does Social Security Cover for Long-Term Care?

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What Does Social Security Cover for Long-Term Care? 
If you need to place a parent or other loved one in a long-term care facility — or if you are contemplating this move for yourself — money is no doubt one of the factors on your mind. Whether you choose in-home care or stay in a nursing home or other long-term care (LTC) facility, the costs are likely much more than your average bills, especially if you’ve already paid off your home mortgage and don’t drive a car.

The average cost of a home health aide for 44 hours a week is $6,292, while moving to assisted living costs an average of $5,350 per month. If you require a nursing home facility for round-the-clock care, it can run $8,669 for a semi-private room and $9,733 for a private room, according to InsuranceBusinessMag.

“With the costs of long-term care rising, people living longer, and a focus on preserving generational wealth and not being a burden to your kids, we are seeing an uptick in the need for long-term care policies,” said Michael Cohen, president and CEO of The DBL Center, an insurance wholesaler specializing in employee benefits. If you don’t have long-term care insurance, you might consider relying on Social Security benefits to cover those costs.

What Does Social Security Cover for Long-Term Care? 
Before we talk about how much of your Social Security payment covers LTC, let’s look at the different types of Social Security benefits available for older adults.

Understanding the Difference Between Social Security Benefits and SSI
Before we talk about how much of your Social Security payment covers LTC, let’s look at the different types of Social Security benefits available for older adults. Social Security, sometimes called Old Age and Survivors Disability Income (or OASDI), is funded by payroll contributions and the federal government. It is based on your average lifetime earnings and averaged $1,763 per month in 2023, according to the Social Security Administration.

Supplemental Security Income (SSI) benefits are designed for lower income adults who don’t quality for Social Security Disability benefits and have few resources. Some Americans may collect Social Security and SSI, with SSI benefits reduced by the amount of Social Security available.

Does Social Security Cover Long-Term Care?

Whether you receive OASDI benefits, SSI, or a combination, these benefits are most likely not going to cover your full LTC needs. If you’re collecting Social Security, those payments might cover 18% to 21% of a nursing home stay, according to A Place For Mom.

For seniors who need help with “activities of daily living” (ADL), but are otherwise relatively healthy, their Social Security income might cover as much as one-third to one-half of their assisted living costs.

When someone moves into assisted living, they are likely not to have many other bills, such as costs associated with a vehicle, utilities, and other monthly payments. Reducing these expenses substantially can help pay for assisted living with Social Security income. Even so, Cohen said, “Social Security isn’t likely to cover the full costs of assisted living.”

What Medicare Pays for Regarding LTC

Medicare may cover expenses tied to medical care while you’re in an LTC facility — and it will also pay for short-term nursing home stays. For lower-income seniors, Medicaid will cover medical costs related to nursing home care.

“Medicare has caps on the amount it will pay toward long-term medical care,” Cohen pointed out. “And Medicaid only covers costs once other assets have been depleted. For an older adult who wants to leave a legacy and preserve wealth for their children, they will want to consider other options.”

Cohen continued, “A long-term care insurance policy."