9 Dec 2025
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Many people assume that if they have long-term care insurance, it will pay for everything when they move into a nursing home - including their daily medications. That’s not true. Long-term care insurance doesn’t cover prescription drugs, not even generic ones. It pays for room and board, help with bathing, dressing, and eating - the daily support you need when you can’t live independently. But your pills? Those come from somewhere else.
Why Long-Term Care Insurance Doesn’t Cover Medications
Long-term care insurance was never designed to pay for medical treatments. It’s meant to cover custodial care - the kind of help that keeps you safe and clean, not the kind that fixes your illness. If you need insulin, blood pressure pills, or antibiotics, those are considered medical expenses. And medical expenses? They fall under health insurance, not long-term care coverage. This isn’t a loophole. It’s by design. Since the 1970s, when modern long-term care policies first appeared, insurers have kept medical care and custodial care separate. That changed in 2006 with Medicare Part D, which created a clear path for drug coverage in nursing homes. But long-term care insurance never got an update to include prescriptions. Even today, if you’re in a nursing home and your policy says it covers "all care," read the fine print. It’ll say something like "room, board, and personal assistance" - not "medications."Who Actually Pays for Your Generic Drugs in a Nursing Home?
If not long-term care insurance, then who? For most people in nursing homes, the answer is Medicare Part D. About 82% of prescription drugs in U.S. nursing homes are paid for by Part D plans. That’s not a small number - it’s the backbone of drug coverage in this setting. Generic drugs make up about 90% of all prescriptions given in nursing homes. They’re cheaper, just as effective, and Part D plans love them. Why? Because they cost less. Most Part D plans charge a lower copay for generics - often $1 to $5 per prescription - compared to $10 or more for brand-name drugs. That’s good news for residents, but only if they’re enrolled. For people with low income, Medicaid steps in. If you’re dually eligible - meaning you get both Medicare and Medicaid - Medicaid covers your drugs if you’re not in a Medicare-covered stay. For veterans, the Veterans Administration handles it, but that’s only 0.2% of cases. The scary part? Around 9% of nursing home residents - nearly 30,000 people - have no drug coverage at all. They pay out of pocket, or get help from charity programs that run out. That’s not a glitch. It’s a system failure.How Medicare Part D Works in Nursing Homes
Part D doesn’t just hand out pills. It works through a complex web of rules. Each plan has a formulary - a list of approved drugs. Not every generic is covered on every plan. Some plans limit which brands of a drug they’ll pay for. Others require prior authorization before you can get a certain pill. Nursing homes have to figure out which plan each resident is on. Then they have to check if their pharmacy works with that plan. Then they have to see if the resident’s meds are on the formulary. If not, they file an exception request. That process can take days. During that time, the resident might go without their medication. One study found that facilities spend 10 to 15 hours a week just managing drug coverage issues. That’s over $28,000 a year in staff time. And that’s not counting the stress on families trying to understand why their parent’s blood pressure pill was suddenly denied.
The Formulary Problem
Just because a drug is generic doesn’t mean it’s automatically covered. Part D plans can still block it if it’s not on their list. And they often do - especially if a cheaper alternative exists. For example, if a resident takes a generic version of a blood thinner, but the plan only covers a different generic brand, the facility has to request an exception. The resident might get a new prescription, or worse - go without for days while the paperwork moves. Medicare requires plans to cover all drugs on the national Part D formulary, but they can still restrict access. And they’re not required to approve exceptions quickly. For nursing home residents, delays can mean hospital visits - and higher costs for everyone. The good news? Starting in 2025, the Inflation Reduction Act will cap out-of-pocket drug costs at $2,000 a year. That’s a big win. But it doesn’t fix the formulary mess. It just limits how much you pay if you get stuck with an expensive drug.What Happens When You Don’t Have Coverage?
If you’re one of the 9% without drug coverage, you’re on your own. Some families pay out of pocket. Others rely on state assistance programs, which vary wildly by location. A few get help from pharmaceutical companies’ patient assistance programs - but those often require paperwork, income proof, and waiting lists. One 2020 study showed that residents without Part D got far fewer prescriptions than those who had it. Not because they didn’t need the drugs - because they couldn’t afford them. That’s not just inconvenient. It’s dangerous. Missed doses of heart meds, diabetes pills, or antibiotics can lead to hospitalization, infections, or even death.
What Should You Do Before Moving Into a Nursing Home?
If you or a loved one is considering long-term care:- Check if you’re enrolled in Medicare Part D. If not, sign up immediately. Late enrollment penalties can add up.
- Ask the nursing home which pharmacies they work with. Not all pharmacies accept all Part D plans.
- Get a copy of your current drug list. Bring it with you.
- Ask the facility’s social worker or pharmacy liaison: "Which Part D plans do you accept? What’s the process if a drug isn’t covered?" Write it down.
- Don’t assume long-term care insurance covers meds. It doesn’t. Plan for it separately.