Medicare and long-term care insurance may both be important to the person for whom you care. One of the big misconceptions about Medicare, though, is that it pays for long-term care. It does not. Medicare will pay for most hospital stays and outpatient health provider visits (if your loved one has the optional Part B coverage), and it may pay for skilled nursing care for a period of time; but, Medicare will not pay for long-term stays in a residential facility (nursing home, assisted living, etc.).

Many people may confuse Medicare (the federal health insurance program for persons over 65 and other qualified individuals) and Medicaid (the state and federal health insurance program for persons who meet certain income requirements). Medicare will not pay for long-term care, Medicaid may pay for long-term care if the individual meets certain income requirements.

Long-term care insurance can help guarantee that long-term care will be covered. However, sometimes long-term care insurance can be prohibitively expensive because monthly premiums are based on age. This means the older you are when you enroll, the more you will probably have to pay. Long-term care insurance usually allows you to choose a level of coverage, such as $100 per day, and may or may not adjust for inflation, depending on how your policy is set up.

As regulations may vary from state to state, check with your state's Department of Insurance, State Unit on Aging, or your local Area Agency on Aging for more information. Keep in mind, though, that you should choose a policy from a reputable company with a long history, one that is probably going to be in business for years to come. Also, buy your policy from an insurance agent you trust. Talk to friends, family members and neighbors who may have long-term care policies to see what their experience has been.