One of the biggest misconceptions about Medicare is that it provides long-term nursing home coverage. It doesn't.

Medicare covers only limited periods of inpatient care, only in a skilled nursing or rehabilitation facility following a hospital stay, and only under strict guidelines. Still, Medicare nursing home coverage can be vital if the person you're caring for has just been hospitalized. Medicare can pay for costly short-term, intensive rehabilitation, which in turn can give you a chance to arrange for longer-term care if it's needed.

Medicare or Medicaid?

One of the reasons many people mistakenly believe that Medicare covers long-term custodial care is that they confuse Medicare with Medicaid, which is a completely separate program only available to people who have very low income and few assets other than their home. Unlike Medicare, Medicaid can cover long-term care, either in a nursing home or at home.