Today, the average 65-year-old has a 70 percent chance of needing long-term care in the future.1 Most long-term care happens at home from family, friends, and caregivers. But sometimes, people need 24-hour, professional care in a nursing home, whether due to a chronic condition, disability, or illness. Unfortunately, it's expensive. Nursing homes cost an average of $8,0002 a month. But the exact cost varies by state and provider and can go up to $10,000 a month.
Medicare and Medicaid help pay for nursing homes. But many people don't realize they do not cover 100 percent of the cost for everyone. Each program pays for different care types, and both have specific eligibility requirements, even for older adults over 65. This article untangles the differences between Medicare and Medicaid nursing home coverage, what they each pay for, and how to qualify.
Yes, Medicare does cover nursing home costs, but only for short, approved visits. Medicare Part A (hospital insurance) covers some specific, short-term services within a skilled nursing facility (or at home) if deemed medically necessary. For example, it covers skilled treatment for an injury or illness in a nursing home.
Original Medicare (Part A and Part B) only pays for nursing home care up to 100 days maximum (the average stay is 22 days). Some Medicare Advantage Plans (Part C) also offer partial coverage, but only if the nursing home contracts with that plan.
Medicare does not cover long-term nursing home care, also known as custodial care. This includes the routine, sometimes “unskilled” services like help with bathing, dressing, or bathroom use. Medicare does cover a limited number of services within nursing homes for patients who meet specific criteria.
Original Medicare nursing home coverage is intended for rehabilitation, not long-term care. It only covers a portion of nursing home expenses for a maximum of 100 days. Medicare calculates nursing home rates by time period, so your out-of-pocket cost changes over time. Below is a breakdown of what you'll pay per benefit period during those 100 days:
Since Medicare nursing home benefits run out after 100 days per illness, it's essential to know your longer-term options. When Medicare stops paying, you may want to have one of the following options in place.
Both federally and state-funded, Medicaid helps cover medical costs for people with limited incomes. Income and asset limits vary by state. Most people don't qualify for Medicaid right away and often start off paying for nursing homes with private insurance and personal funds. If you do qualify, Medicaid covers most basic long-term healthcare costs. Not all nursing homes accept Medicaid, so be sure to confirm with the facility you want.
In addition to income, Medicaid also takes some (not all) of your assets into account, including bank balances, CDs, stocks and bonds, secondary property (non-primary residences), and non-primary vehicles. You can check Medicaid eligibility and find approved providers in your state on Medicaid's website.
You can buy insurance policies to cover many long-term healthcare costs. Policy choices (and premiums) vary considerably. Some just cover nursing home care, while others cover everything from adult day care to medical equipment. But buyers beware:
Many people start off paying for nursing home care with their savings and/or through LTCI. Even with Medicaid, Medicare, and private insurance, most people end up paying for at least some nursing home expenses out of pocket.
Here are a few tips for finding the right nursing home for your needs.
Yes, Medicaid covers nursing home costs if you qualify. Medicaid is the largest fund-source for nursing home care. For eligible seniors, Medicaid covers long-term nursing home care in Medicaid-certified facilities4 when medically necessary. You'll have to be under a certain income level and meet other state-specific requirements to qualify.5
All 50 states offer Medicaid, but nursing home services, cost coverage, and eligibility requirements vary widely by state. For example, New York has a Medicaid income limit of $15,750,6 while Mississippi's limit is $4,000. Not all nursing homes accept Medicaid, so check with each facility.
Unlike Medicare, Medicaid does not impose an official time limit on nursing home stays as long as they're in a licensed and certified Medicaid nursing facility.
Some Medicaid services are covered 100 percent, but others are not. Because individual states manage their own Medicaid programs, the extent of coverage depends on your facility's location. For example, different states might cover routine dental services or have higher cost allowances. The federal government does require Medicaid-certified nursing homes to provide the same minimum services.
*Level of service varies by state
Below are a few resources and tips for finding a Medicaid-approved nursing home in your area.
Scott founded Select Home Care Portland in 2009 and has been helping seniors live their best life at home or in their local senior community ever since. As an advocate for seniors, the primary philosophy has been to listen, educate and provide… Learn More About Scott Witt
Since graduating from Harvard with an honors degree in Statistics, Jeff has been creating content in print, online, and on television. Much of his work has been dedicated to informing seniors on how to live better lives. As Editor-in-Chief of the personal… Learn More About Jeff Hoyt
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LongTermCare.gov. (2021). How Much Care Will You Need?.
Genworth. (2021). Cost of Care Survey.
Medicare.gov. (2021). Medicare & Coronavirus.
Centers for Medicare and Medicaid Services. (2021). Quality Safety & Oversight – Guidance to Laws & Regulations.
Medicaid.gov. (2021). Eligibility.
New York State. (2021). Medicaid in New York State.