EP Wealth Senior Financial Planner Adam Hale, CFP^®, who has worked extensively with families caring for aging loved ones, explains where Medicare's coverage ends, why long-term care policies so often pay less and later than families expect, and how to close the gap without losing sight of the person at the center of it.

Ask a Financial Planner: My Parents Said Their Care Was Covered. It Fell Short. Now What?

The plan seemed settled. Mom and Dad had long-term care insurance, Medicare would handle the medical side, and the kids were told not to worry. It's one of the most loving things parents say. It's also, for many families, the last time anyone looks closely at the plan until the day it's needed. The questions below come from families learning what that coverage actually provides, and Adam's answers aim to help others find out sooner.

Q: My mom is 82 and has been on Medicare for years. Since my dad passed, she has slowed down, and my brother and I have started wondering whether she can keep living on her own. He's sure Medicare will pay for help if she needs it. I'm unsure, and I don't know what questions to ask. Where should we start?

A: First, I'm sorry about the loss of your dad. It makes sense that you and your brother are watching your mom more closely now. That kind of attention is where good care begins. Medicare is very good at what it was built to do: pay for doctors, hospitals, tests, and prescriptions. It was not built to pay for the kind of help your mom may need next, such as someone to make sure she eats well, bathes safely, and takes her medications on time. Medicare calls that custodial care, and when it's the only care someone needs, Medicare doesn't cover it.¹⁰ That gap surprises many families. It's far better to learn it now, on a calm phone call with your brother, than in a hospital discharge meeting.

What Medicare covers, and where it stops

 Recovery after a hospital stay. If your mom is admitted to the hospital for at least three days and then needs skilled care to recover, such as physical therapy after a fall, Medicare can cover up to 100 days in a skilled nursing facility. The first 20 days are fully covered. After that, she pays daily coinsurance, and coverage ends once she no longer needs daily skilled care.

One detail to watch: those three days must be as an admitted inpatient. Time spent under observation, even overnight in a hospital bed, doesn't count. If your mom is ever hospitalized, ask the staff directly whether she has been admitted or is under observation.

 Care at home. Medicare also covers some home health care: part-time skilled nursing, therapy, and an aide's help with bathing or dressing, as long as she is considered homebound and also needs skilled care. It doesn't pay for around-the-clock help, or for cooking, cleaning, and errands on their own.

 Comfort at the end of life.  If she ever reaches a point where comfort matters more than cure, Medicare's hospice benefit is generous. It covers medications for comfort, medical equipment, and regular visits from nurses, aides, and counselors, along with support for the family. What families often don't realize until they're in it is who provides everything in between. Hospice teams visit; they don't stay. Outside of brief periods of crisis, no one is at the bedside overnight unless the family is there or pays for someone to be.¹¹

In practice, that often means you or your brother becomes her caregiver. It's worth asking each other honestly, now: Could one of you step away from work for weeks, or possibly months? If not, can the family afford the hourly cost of in-home care when help is needed around the clock?

So, the honest answer for your brother is this: Medicare will help your mom recover. It won't pay for someone to help her day to day. That second part is something your family plans for together, which is where the next question picks up.

Use open enrollment as your opening

Medicare's annual open enrollment runs from October 15 through December 7, and it gives you a natural, low-pressure reason to sit down with your mom and look at her coverage together.

A few things worth reviewing together:

Whether her plan still fits her life. If she has a Medicare Advantage plan, confirm that her doctors and any new specialists are still in network, and ask how the plan handles skilled nursing and home health care. If she has Original Medicare with a Medigap supplement, know that switching can be harder later than it looks now. In many states, once her initial enrollment window has passed, a Medigap insurer can review her health and charge more or decline coverage.¹² For a parent whose health is changing, the plan that costs a little more today may be the one that keeps her options open.

Her prescriptions. Drug plans change their coverage and pricing every year, and Part D now caps annual out-of-pocket drug costs. Run her current medications through Medicare's plan finder before the deadline.

Her premiums. Medicare premiums rise with income, based on the tax return from two years earlier. If her income dropped after your dad's death, she may be paying a surcharge based on a household that no longer exists. She can ask Social Security to reconsider using its life-changing event form.¹³

Permission to help. If you and your brother will be calling on her behalf, have her sign Medicare's authorization form so her plan administrator can speak with you, and make sure she has a health care power of attorney in place. These can save enormous frustration later, especially if one of you is helping from a distance.

Q: Our parents always told my sister and I not to worry because they had long-term care insurance. After my dad's fall this summer, we called to start his benefits and learned the policy has a 90-day waiting period before it pays anything, and the daily benefit they chose in 2003 covers about half of what home care costs now. Now, we're scrambling to figure out how to pay for the gap. My sister lives nearby and can help, but I’m unsure how that all works. What do we do?

A: Your parents didn’t get this wrong. They bought coverage decades before most people think about it, and that policy is still going to matter. It was simply written for the care and costs of 2003. Many families discover the limits of a policy only at claim time. What matters now is making the policy do as much as it can.

Make the policy work as hard as it can

Understand the waiting period. That 90 days is called the elimination period, and it works like a deductible measured in time: the family pays for care before the policy begins. Ask the insurer two questions right away. Are the 90 days counted as calendar days, or only days when your dad actually receives paid care? And do the days Medicare is covering in rehab count toward the wait? Some policies say yes, which could mean the clock is already running.

Document his need for care. Most policies begin paying once a licensed health care practitioner certifies that he needs help with at least two of six daily activities, such as bathing, dressing, or moving from a bed to a chair, or if he has a severe cognitive impairment.¹⁴ Ask his care team to complete that certification and a plan of care before discharge, so the paperwork isn't another delay.

Check who the policy will pay. Many policies reimburse only licensed or agency caregivers, not family members. Confirm that before you hire anyone, and before your sister takes on more hours expecting the policy to help.

Look for provisions that help. Ask whether premiums stop once he's receiving benefits, which many policies allow, and whether there is an inflation rider or any other benefit you may have missed in the original paperwork. And whatever the frustration, don't let the policy lapse. Half of today's cost is still real money, every day.

Plan for the gap, together

Once you know what the policy will pay, you'll know what it won't, and that difference is what your family plans for. It usually comes from a combination of your parents' savings and income, the equity in their home, and the time and resources of the people who love them. If your dad served in the military, ask about VA benefits such as Aid and Attendance, which can help with the cost of care.

Having your sister nearby is beneficial, but over time it can also become a strain on her own family and finances, and possibly on the relationship between the two of you. That's why I often recommend a Personal Care Agreement, a written arrangement that spells out who provides care, roughly how many hours, and what the caregiver is paid. Putting it in writing can feel overly formal between family members, but it can actually help with the emotions of the situation. It recognizes her time as real work, and it spares everyone the private tally of who has given more, one of the most common sources of friction I see when siblings share a parent's care.

A few honest notes on the money. Pay should reflect what a professional caregiver would charge in your area, not more. Your sister would generally report what she's paid as income. And while some care costs can be deducted as medical expenses, the rules are stricter when the caregiver is a relative,¹⁵ so plan this with your tax professional rather than assume.

A Personal Note on Caring for Aging Parents

Answering these questions reminded me how much emotion sits underneath every coverage question. When families call me in a moment like this, the policy is rarely the whole story. What they're really saying is harder: I'm worried about my dad and I don't want my parents to feel they failed us.

"Don't worry, we're covered" comes from love. The next step is turning that reassurance into a plan the whole family understands, ideally before anyone needs it. If your parents have a policy, ask to read it with them this year. If your family has been saying, "we should really talk about this," open enrollment is as good a reason as any to begin.

You don't have to sort through it alone. If you're facing these decisions now, reach out to your Advisor, and let's talk about what comes next.

DISCLOSURES

¹⁰. Medicare.gov, Skilled Nursing Facility Care: qualifying inpatient stays, skilled nursing coverage, coinsurance, and 100-day limit. .

¹¹. Medicare.gov, Hospice Care: hospice benefits, respite care, and limits on continuous home care. 

^12. Medicare.gov, Buying a Medigap Policy: Medigap enrollment periods and underwritin 

^13. Social Security Administration, Form SSA-44: requesting an IRMAA adjustment after a life-changing event. 

¹⁴ .IRS Publication 502: tax-qualified long-term care services and chronic illness certification. 

¹⁵. IRS Publication 502: medical expense deductions and limitations involving family caregivers. 

This article is provided for educational purposes only and should not be construed as tax, legal, insurance, or investment advice. The questions and examples in this article are hypothetical and provided for illustrative purposes only. Medicare rules, insurance policy terms, costs, and tax laws vary and are subject to change. EP Wealth Advisors does not provide tax or legal advice. Please consult your tax and legal professionals regarding your specific situation.