Most health insurance does not cover nursing home care, but Medicare, Medicaid, and long-term care insurance may
Whether your nursing home stay is covered depends on the type of insurance you have and the reason you need care. Medicare covers some nursing home costs but only after a hospital stay and only for a limited time. Medicaid covers long-term nursing home care for people with limited income and assets, and it is the largest payer of nursing home bills in the United States. Long-term care insurance, if you have it, may cover part or all of your nursing home costs. Regular health insurance through an employer or the marketplace does not cover nursing home care.
The key difference is between skilled nursing care (medical care you need after an illness or surgery) and custodial care (help with daily living because of age or chronic illness). Medicare covers skilled nursing; Medicaid covers both. Understanding which type of care you need and which insurance might pay for it can save you thousands of dollars and help you plan ahead.
Key Takeaways
- Medicare covers up to 100 days of skilled nursing home care after a hospital stay of at least three days, but you pay a daily copay after day 20.
- Medicaid covers long-term nursing home care for people who meet income and asset limits, which vary by state.
- Long-term care insurance pays a daily or monthly benefit toward nursing home costs if you bought a policy before you needed care.
- Regular health insurance and Medicare Advantage plans do not cover nursing home care, though some Advantage plans may cover short-term skilled nursing.
- If you have no insurance coverage, you pay out of pocket; many people eventually turn to Medicaid after spending down their savings.
Medicare coverage for nursing home stays
Medicare covers skilled nursing home care only after you have been in a hospital for at least three consecutive days. The stay must be for the same condition you were hospitalized for, and your doctor must order the nursing home care as part of your recovery. Medicare will pay for up to 100 days in a skilled nursing facility per benefit period (the benefit period resets 60 days after you leave the facility).
You pay nothing for days 1 through 20. Starting on day 21, you pay a daily copay (the amount changes each year; in 2024 it is $200 per day). After day 100, Medicare pays nothing and you are responsible for all costs. Most people do not stay the full 100 days; the average Medicare-covered stay is about 30 days.
Medicare does not cover custodial care or long-term nursing home stays. If you need help with bathing, dressing, or meals but do not need skilled medical care, Medicare will not pay. Medicare Advantage plans (Part C) may cover some skilled nursing stays, but coverage varies by plan; you should check your plan documents or call your plan to ask about nursing home coverage before you need it.
Medicaid coverage for long-term nursing home care
Medicaid is the primary payer for long-term nursing home care in the United States. Unlike Medicare, Medicaid covers both skilled nursing care and custodial care, and it has no time limit. You can stay in a nursing home for months or years and Medicaid will continue to pay, as long as you remain may be able to access.
To be may be able to access for Medicaid nursing home coverage, you must meet your state's income and asset limits. Income limits vary widely by state, but asset limits are often around $2,000 to $3,000 in countable resources (the rules about what counts as an asset are complex and vary by state). Your home, one vehicle, and some personal items do not count. If you have more assets than your state allows, you may need to spend them down before Medicaid will pay.
Medicaid also requires a spend-down period in some cases. If you have been giving away money or assets to family members in the months or years before you explore, Medicaid may penalize you by delaying coverage. The rules about this are strict and state-specific; if you think you may need Medicaid nursing home coverage, it is worth talking to an elder law attorney or your local Medicaid office before you give away assets.
Long-term care insurance and what it pays
Long-term care insurance is a private insurance policy you buy while you are still healthy, and it pays a daily or monthly benefit if you later need nursing home care, assisted living, or home care. The benefit amount, length of coverage, and waiting period (how long you must pay out of pocket before the insurance kicks in) depend on the policy you bought.
A typical policy might pay $150 to $300 per day toward nursing home costs, with a 90-day waiting period and coverage for three to five years. You pay the difference between the benefit and the actual cost of care. Nursing home costs vary by region; in some areas they are $6,000 to $8,000 per month, so a $200-per-day benefit covers only part of the bill.
Long-term care insurance is expensive and becomes more expensive the older you are when you buy it. Most people buy it in their 50s or early 60s. If you already have a policy, check the details to see what it covers and what your daily benefit is. If you do not have a policy and are thinking about buying one, talk to an insurance agent or financial advisor about whether it makes sense for your situation.
Regular health insurance and nursing home care
Health insurance through your employer, the marketplace, or a retiree plan does not cover nursing home care. These plans cover hospital stays, doctor visits, and some rehabilitation, but not the ongoing custodial or skilled care that a nursing home provides. If you are admitted to a nursing home, your health insurance will not pay the facility bill.
Some people confuse nursing home care with rehabilitation after surgery or injury. If you need a few weeks of physical therapy after a hip replacement, that may be covered by Medicare or your health plan as skilled nursing care. But if you need ongoing help with daily living because of dementia, arthritis, or age, that is custodial care and is not covered by regular health insurance.
What happens if you have no insurance coverage
If you enter a nursing home and have no insurance coverage, you pay out of pocket. Nursing home costs are high: the average cost is $8,000 to $10,000 per month, though it varies by location and the level of care you need. Many people pay privately for a year or two, then explore for Medicaid once their savings are depleted.
This is called "spending down" to Medicaid. You pay until your assets fall below your state's limit, then Medicaid takes over. The nursing home can help you understand the process and may have a social worker who can guide you through a Medicaid process. Some states have programs that help people plan ahead to preserve some assets for their spouse or family, so it is worth asking about these options before you spend everything.
Planning ahead: what you can do now
If you think you may need nursing home care in the future, there are steps you can take now. First, understand what insurance you have. Call Medicare or your health plan and ask specifically whether they cover nursing home care and under what conditions. Read your policy documents or ask for a summary.
Second, talk to your family about long-term care planning. Do you want to stay in your home as long as possible, or are you open to a nursing home? How much can your family help with care? What are your financial resources? These conversations are hard but they make decisions easier later.
Third, if you have significant assets and are concerned about nursing home costs, consider talking to an elder law attorney about your options. They can explain Medicaid planning, trusts, and other strategies that may help you protect your assets while still getting the care you need. This is especially important if you are married, because Medicaid has rules to protect a spouse's income and assets.
Frequently Asked Questions
Will Medicare pay for my nursing home stay if I did not have a hospital stay first?
No. Medicare only covers nursing home care after a hospital stay of at least three consecutive days for the same condition. If you go directly from home to a nursing home, Medicare will not pay. Medicaid may cover the cost if you meet your state's income and asset limits.
Can I use my regular health insurance to pay for nursing home care?
No. Health insurance from an employer, the marketplace, or a retiree plan does not cover nursing home care. These plans cover hospital and doctor visits, but not the ongoing care a nursing home provides. Medicare and Medicaid are the main sources of payment for nursing home care.
What is the difference between skilled nursing and custodial care?
Skilled nursing care is medical care ordered by a doctor, such as wound care, physical therapy, or medication management after surgery or illness. Custodial care is help with daily living—bathing, dressing, meals, toileting—because of age or chronic illness. Medicare covers skilled nursing; Medicaid covers both. Regular health insurance covers neither.
How much does a nursing home cost per month?
Costs vary by location and level of care, but the average is $8,000 to $10,000 per month. Some facilities cost more, some less. Call nursing homes in your area to ask about their rates. These costs are why many people eventually turn to Medicaid to pay for long-term care.
If I run out of money, can I switch to Medicaid?
Yes. Once your assets fall below your state's Medicaid limit, you can explore for Medicaid and it will cover your nursing home care going forward. The nursing home's social worker can help you with the process. Be aware that Medicaid has rules about money you gave away in the months before you explore, so it is worth understanding these rules before you spend down your savings.