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. The median cost for nursing home care is $7,908 per month for a semiprivate room in the U.S.2 Exact costs vary by state and provider.
Medicare and Medicaid may offer some coverage 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.
Table of Contents:
- Does Medicare Cover Nursing Homes?
- How Much Does Medicare Cover for Nursing Homes?
- What Happens when Medicare Stops Paying for Nursing Home Care?
- How to Find Nursing Homes that Accept Medicare Near Me
- Does Medicaid Cover Nursing Homes?
- How Much Does Medicaid Pay Towards a Nursing Home?
- How to Find Nursing Homes that Accept Medicaid Near Me
Medicare may cover some 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 may cover 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) may 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 may cover a limited number of services within nursing homes for patients who meet specific criteria.
What Is Covered by Medicare
- Medical and nursing care up to 100 days in a skilled facility
- Prescription medication covered under Medicare Part A
- Room and meals
What's not Covered by Medicare
- Long-term, custodial care
- Dental care
- Routine eye exams
- Cosmetic procedures
- Hearing aids and related exams
- Routine podiatry (foot care)
- Enrolled in Medicare Part A (hospital insurance).
- Available days in your benefit period.
- Qualifying hospital stay: three or more days hospitalized as an inpatient (unless waived by COVID-19 Medicare3 policy).
- Enter a Medicare-approved facility within 30 days of qualifying hospital stay.
- A doctor determines you need daily skilled care.
- The skilled nursing facility is Medicare-approved.
- Hospital-related medical condition treated during a qualifying stay.
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 may pay per benefit period during those 100 days:
- Days 1-20: $0 (Medicare pays 100 percent)
- Days 21-100: $194.50 per day coinsurance
- Days 101 and beyond: All expenses (Medicare covers 0 percent)
FYI: If you're new to Medicare or just want to learn more about the program, head to our 2022 Medicare guide. It covers everything you need to know about coverage and enrolling, and it answers the most frequently asked Medicare questions.
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 health care 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.
Private Long-Term Care (LTC) Insurance
You can buy insurance policies to cover many long-term health care 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:
- Only buy from a reputable carrier licensed in your state.
- If you have a preexisting condition, ask if coverage is limited or more expensive.
- Check for discounts. Retirees, veterans, and government employees may qualify for group rates.
Many people start off paying for nursing home care with their savings and/or through LTC insurance. Even with Medicaid, Medicare, and private insurance, many 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.
- If you like your doctor, ask if they provide services for any local nursing homes.
- Ask friends, family, and colleagues you trust if they or their family members have had good experiences with a particular nursing home.
- Search for locally certified nursing homes.
- Search Medicare's eldercare locator.
- Poll your local senior community center.
- While in the hospital, talk to a social worker about post-discharge care plans.
- For extra guidance, call or chat with Medicaid.
Medicaid covers nursing home costs if you qualify. Medicaid is the largest fund-source for nursing home care. For those who are eligible, 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, each state sets its own income limit to determine if you are eligible for Medicaid. 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.
What Is Covered by Medicaid
- Long-term care (health-related only) covers nursing home stays for qualifying patients needing ongoing care for a chronic mental or physical condition.
- Skilled nursing and related medical care.
- Rehabilitation from illness, injury, or disability.
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.
Medicaid Pays For*
- Nursing services
- Room and board
- Dietary services
- Medically-related social services
- Pharmaceutical services
- Routine hygiene products and assistance
- Dental (routine and emergency dental up to state limit)
- Professionally directed activities
- Specialized rehabilitation (for mental illness or disability)
*Level of service varies by state
Medicaid Does not Pay For
- Private rooms (unless medically necessary)
- Special food (beyond what the facility already prepares)
- Personal comfort items (telephone, TV, radio, computers, reading materials, tobacco, alcohol, flowers and plants, etc.)
- Cosmetics or extra grooming products
- Social activities beyond the facility's activity program
- Special care outside Medicaid-contracted coverage
Below are a few resources and tips for finding a Medicaid-approved nursing home in your area.
- Use Medicaid's search tool. This online tool lets you look for pre-vetted facilities by Zip Code.
- Ask your doctors if they service any Medicaid-certified nursing homes.
- Ask friends, family, and colleagues you trust.
- Contact an Aging and Disability Resource Center (ADRC).
- If you're in the hospital, talk to a social worker about post-discharge care planning.
- They may be affiliated with or know reputable, certified Medicaid nursing homes.