Most nursing home costs are not covered by standard health insurance
Medicare covers some nursing home stays, but only under specific conditions — and only for a limited time. Private health insurance (the kind you buy through an employer or the marketplace) typically does not cover nursing home care at all. Medicaid, the joint federal-state program for people with lower incomes, is the largest payer of nursing home bills in the United States, but you must meet income and asset limits to may have access to. Long-term care insurance, if you bought it before needing care, may cover part of the cost depending on your policy.
The gap between what insurance covers and what nursing home care actually costs is why many families face large out-of-pocket bills. Understanding which program covers what — and for how long — helps you plan ahead and know what to expect when a bill arrives.
Key Takeaways
- Medicare covers up to 100 days in a skilled nursing facility after a hospital stay of at least three days, but only if you need skilled care like wound care or physical therapy.
- Medicaid pays for long-term nursing home care if your income and assets fall below your state's limits, and it covers the largest share of nursing home bills nationally.
- Private health insurance and Medicare Advantage plans do not cover custodial care — help with daily tasks like bathing and dressing — which is what most nursing home residents need.
- Long-term care insurance covers nursing home costs only if you bought the policy before you needed care, and coverage varies widely by policy.
- Many nursing home residents pay out of pocket, sometimes until their assets are depleted enough to may have access to for Medicaid.
What Medicare covers and for how long
Medicare covers a skilled nursing facility stay 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, or a condition that developed during your hospital stay. Medicare then covers up to 100 days, but the coverage is tiered: days 1 through 20 are fully covered, and days 21 through 100 require you to pay a daily copay (the amount changes each year).
The key word is skilled care. Medicare pays only if you need medical or rehabilitation services that require a nurse or therapist — wound care, intravenous medication, physical therapy after a hip fracture, or management of a complex condition. If you need help with bathing, dressing, toileting, and meals but do not need skilled medical care, Medicare does not cover it, even if you are in a nursing home. This type of care is called custodial care, and it is the most common reason people live in nursing homes long-term.
Once your 100 days end, Medicare coverage stops. If you still need custodial care, you pay out of pocket or turn to Medicaid if you may have access to.
How Medicaid covers nursing home care
Medicaid is the primary payer for long-term nursing home care in the United States. Unlike Medicare, Medicaid has no time limit — it can cover your stay for years if you remain may be able to access. Medicaid covers both skilled care and custodial care, which is why it is the safety net for people who need nursing home care indefinitely.
To may have access to for Medicaid nursing home coverage, your income must be below your state's limit (usually around $2,500 per month, though this varies), and your assets must be below a threshold (typically $2,000 in countable assets, though the rules are complex). Your home, one vehicle, and some personal items do not count toward the asset limit, but savings, investments, and a second property do. Each state sets its own limits, so you need to check your state's rules.
Many people do not may have access to for Medicaid initially because their assets are too high. In that case, they pay the nursing home out of pocket until their savings are depleted to the Medicaid threshold — a process sometimes called "spending down." Once you reach the asset limit, you can explore for Medicaid, and it covers the remaining cost of care. Some people work with an elder law attorney to plan this transition, though it is not required.
What private insurance and Medicare Advantage do not cover
Standard private health insurance — whether through an employer, the marketplace, or a retiree plan — does not cover nursing home care. These plans are designed to cover acute medical care: hospital stays, doctor visits, surgery, and prescription drugs. Nursing home care, especially long-term custodial care, falls outside that scope.
Medicare Advantage plans (the private alternative to Original Medicare) also do not cover custodial nursing home care. Some Medicare Advantage plans offer supplemental benefits like meal delivery or transportation, but these are not the same as paying for a nursing home stay. If you have a Medicare Advantage plan and need skilled nursing care after a hospital stay, the plan follows the same 100-day limit as Original Medicare.
Long-term care insurance and what it covers
Long-term care insurance is a separate policy you buy before you need care — usually in your 50s or 60s. It covers nursing home care, assisted living, home care, and adult day care, depending on your policy. If you bought a policy years ago and are now entering a nursing home, your policy may cover part or all of the cost, depending on the daily benefit amount and how long you have been paying premiums.
The catch is that you must have bought the policy before you needed care. If you are already in a nursing home or have a diagnosis that would require nursing home care, you cannot buy a new long-term care policy. Additionally, long-term care insurance policies have waiting periods (usually 30 to 100 days) before they start paying, and they have daily benefit limits — meaning they cover up to a certain amount per day, and you pay anything above that.
If you have a long-term care policy, bring it to your nursing home's admissions office. They can help you file a claim and understand what your policy covers.
Veterans benefits and nursing home care
Veterans may be may be able to access for VA nursing home care through the Department of Veterans Affairs, or for a monthly benefit called Aid and Attendance that can help pay for nursing home costs. may be able to access depends on your service history, disability rating, and income. If you are a veteran, contact your local VA office or call the Veterans Benefits hotline to learn whether you may have access to for these programs.
Some veterans also may have access to for both VA benefits and Medicaid, which can cover gaps in VA coverage. An elder law attorney or a veterans service officer can help you understand your options.
Planning ahead: what you can do now
If you are thinking about nursing home care for yourself or a family member, knowing the coverage landscape helps you plan. If you are in your 50s or 60s and have assets to protect, you might consider long-term care insurance while you are still healthy enough to buy it. If you are already retired or near retirement, you might explore Medicaid planning with an elder law attorney to understand how your state's rules work.
If you are already in a nursing home or facing admission soon, gather your insurance documents — Medicare card, any private insurance cards, long-term care policies, and veteran discharge papers if applicable. Give these to the nursing home's billing department so they can file claims on your behalf. Ask the billing staff to explain what each insurance covers and what you will owe out of pocket.
Frequently Asked Questions
Will Medicare pay for my nursing home stay if I did not spend three days in the hospital first?
No. Medicare's skilled nursing facility benefit requires a hospital stay of at least three consecutive days when ready before admission. If you go directly from home or another setting to a nursing home, Medicare will not cover it, even if you need skilled care. You would need to pay out of pocket or use Medicaid if you may have access to.
Can I use my Medicare Supplement (Medigap) policy to pay for nursing home care?
No. Medigap policies cover costs that Medicare does not cover — like copays and coinsurance — but they do not cover services Medicare itself does not cover. Since Medicare does not cover custodial nursing home care, Medigap will not either. Long-term care insurance is a separate product designed for this purpose.
If I have Medicaid, do I have to give the nursing home all my monthly income?
Medicaid rules vary by state, but generally you keep a small personal needs allowance (usually $30 to $75 per month) and may keep some income for a spouse at home. The rest goes to the nursing home as a copay. Your state's Medicaid office can tell you the exact amount you keep.
What happens if I run out of money before I die?
If you have spent down your assets to the Medicaid limit and are receiving Medicaid, Medicaid continues to cover your nursing home care. The nursing home cannot discharge you because you have no money. If you are not yet on Medicaid, contact your state's Medicaid office about explore before your money runs out.
Can I transfer my assets to my children to may have access to for Medicaid faster?
Medicaid has a five-year "look-back" period. If you transfer assets for less than fair market value within five years before explore, Medicaid will penalize you by delaying coverage. An elder law attorney can explain your state's rules and whether any legal planning strategies explore to your situation.