If you have few retirement assets, then spending downing until qualifying medicare is a common strategy.
If you have a large retirement asset base, that may pay for the three or so years of care you need. Your heirs may disagree. This is called self-insurance.
Finally there is the difficult middle- those who neither want to gamble with poverty, nor quite have large retirement accounts. Perhaps LTC insurance is appropiate for this.
Post-o? Medicaid, not Medicare, is what covers room and board at qualified skilled nursing homes for folks who are impoverished enough.
Indeed, the greedy little leeches. ;-) Hence better arrange for a power-of-attorney who takes over at the appropriate time and who will do as you wish.
I am not sure it is fair to suggest the 'poverty option'--a Medicaid bed--is so gosh-awful compared to an alleged hoity-toity, 'no Medicaid beds' nursing home. I had relatives in each, and I did not find the two categories all that different on my visits. Factor in the state of mind of the person and how ambulatory they are, too. I think the 'gamble,' as you call it, may not be so terrible. Fact is life is terrible period when one cannot get one's self to the bathroom, communicate one's needs, and so on. How the surroundings are dressed up seems irrelevant, especially given how the government has cracked down in the last few decades on the Medicaid bed nursing homes. They are much more brightly decorated, much more closely watched (including requisite "patients' rights advocates to whom relatives may go with concerns), much more 'snap to it' when there is a complaint.
Just a few cents of thoughts. I do not look forward to this period in my life--who does?--and am pretty sure the way to go is to arrange through a POA living will etc. no extraordinary measures and also come to terms with what it means to be close to death, so it's a peaceful experience rather than, worst case, a violent one. Certain nursing homes specialize in this, for one.
Here's a general comment. Individual situations may vary.
Until we get some clarification on the health insurance debate currently in progress, I'd prefer folks sock money away in their 401k (as opposed to buying LTC coverage.)
The need for nursing home care goes up after age 80, so one could get an immediate annuity at that age to take care of anticipated costs.
Most people won't have to enter a nursing home for any appreciable length of time, so a little self-insurance may work for those younger than 80 if they are healthy.
-- Ron
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