Insurance coverage for nursing home care depends on the type of insurance and your specific situation

Most health insurance — including Medicare and employer plans — does not pay for long-term nursing home stays. Medicare covers only the first 100 days under strict conditions, and only if you need skilled nursing care after a hospital stay. Private insurance rarely covers custodial care, which is the day-to-day information most nursing home residents need. Medicaid, which is not health insurance but a state-run program, does pay for nursing home care if you meet income and asset limits — and this is how most people actually fund extended stays.

The difference between what gets covered and what doesn't comes down to one question: Is the care skilled nursing (medical treatment a nurse must provide) or custodial care (help with daily living that a trained aide can provide)? Insurance pays for the first. Almost nobody's insurance pays for the second, and that is what most nursing home residents need.

Key Takeaways

  • Medicare covers up to 100 days of nursing home care only if you were hospitalized for at least three days first and need skilled nursing or rehabilitation.
  • Private health insurance and employer plans almost never cover long-term nursing home stays, whether skilled or custodial.
  • Medicaid pays for nursing home care if your income and assets fall below your state's limits, and this is the primary payer for most nursing home residents.
  • Long-term care insurance, if you have it, may cover nursing home costs, but the policy terms vary widely and many people do not have this coverage.
  • Most nursing home costs are paid out of pocket, through Medicaid, or through a combination of Medicare (for the first 100 days) and then Medicaid or personal funds.

What Medicare covers in a nursing home

Medicare covers skilled nursing facility care for up to 100 days, but only under specific conditions. You must have been admitted to a hospital for at least three consecutive days before entering the nursing home. The nursing home must be a Medicare-certified skilled nursing facility. And you must need skilled nursing care — not just help with bathing, dressing, or meals, but actual medical treatment that a registered nurse or physical therapist must provide.

Medicare pays the full cost for days 1 through 20. From day 21 through day 100, you pay a daily copay (the amount varies each year) and Medicare covers the rest. After day 100, Medicare pays nothing. If you need to stay longer — which most people do — you must pay out of pocket, use Medicaid, or rely on other resources.

The clock resets only if you leave the nursing home for at least 60 days and then return. Many people use their 100 days of Medicare coverage, go home or to another setting for two months, and then return to the nursing home to get another 100 days. This is a real option, but it requires that you actually leave and that you meet the three-day hospital stay requirement again if you return.

What private insurance and employer plans cover

Standard health insurance — whether you buy it yourself, get it through an employer, or have a Medicare Advantage plan — does not cover nursing home care beyond what Medicare covers. These plans pay for hospital stays and doctor visits, not for the room, board, and daily information that make up most of a nursing home bill.

Some Medicare Advantage plans include limited skilled nursing facility coverage that mirrors Medicare's 100-day benefit, but they do not extend beyond that. If your employer offers retiree health coverage, check your plan documents to see what it says about nursing home care — most say nothing, which means it is not covered.

The only exception is long-term care insurance, a separate policy you buy specifically to cover nursing home, assisted living, or in-home care. If you have this policy, check your documents for the daily benefit amount, the maximum number of days or dollars covered, and any waiting period before coverage begins. Long-term care insurance is uncommon — most people do not have it — but if you do, it can pay a significant portion of nursing home costs.

How Medicaid pays for nursing home care

Medicaid is the primary payer for long-term nursing home care in the United States. Unlike Medicare, which is based on age and work history, Medicaid is based on income and assets. Each state sets its own limits, but generally you must have a monthly income below a certain threshold (often around $2,000 to $2,500, though this varies) and assets below a limit (often around $2,000 in countable resources, though again this varies by state).

Your home, one vehicle, and certain personal items do not count toward the asset limit. Money in a bank account, stocks, or other investments does count. If you are married, your spouse's income and assets are treated differently — your state's Medicaid office can explain the exact rules for your situation.

Medicaid pays the nursing home directly, and the amount it pays varies by state. Some states pay more than others, and some nursing homes accept Medicaid while others do not. Before choosing a nursing home, ask whether it accepts Medicaid and whether it has Medicaid beds available.

Paying out of pocket before Medicaid

Many people pay for nursing home care out of pocket until their savings run out, then turn to Medicaid. This is called "spending down." You pay the nursing home bill each month until your assets fall below your state's Medicaid limit, at which point you become Medicaid-may be able to access and Medicaid takes over.

The nursing home bill varies widely depending on location and level of care, but can range from $4,000 to $8,000 or more per month. At that rate, savings deplete quickly. Some families plan for this by setting aside funds for nursing home care early; others discover the cost only when a parent or spouse needs care.

If you are considering a nursing home stay, ask the facility for a written estimate of monthly costs and ask whether they can tell you what Medicaid would cover if you became may be able to access. Some facilities have social workers who help families understand the financial path forward.

Veterans benefits and nursing home care

If you or your spouse is a military veteran, the Department of Veterans Affairs may help pay for nursing home care through the Aid and Attendance benefit or through VA nursing homes. VA nursing homes are free to may be able to access veterans, but there is often a waiting list. The Aid and Attendance benefit is a monthly payment that can help cover the cost of a private nursing home.

To explore whether you may have access to, contact the VA directly or ask the nursing home's social worker whether they have experience working with VA benefits. The process is separate from Medicare and Medicaid, and many people do not know this option exists.

What happens when insurance runs out

When your Medicare coverage ends at day 100, or when your long-term care insurance benefit is exhausted, you have several options. You can continue to pay out of pocket if you have the resources. You can turn to Medicaid if you meet the income and asset limits. You can move to a less expensive setting, such as assisted living or home care. Or you can discuss with the nursing home whether they offer a payment plan or whether they can help you understand Medicaid.

Many nursing homes are experienced in helping residents transition from private pay to Medicaid. They have social workers on staff who understand the process and can guide you through it. Do not wait until your savings are gone to have this conversation — start it early so you understand your options.

Frequently Asked Questions

Does Medicare pay for nursing home care if I did not have a hospital stay first?

No. Medicare skilled nursing facility coverage requires a hospital stay of at least three consecutive days when ready before admission to the nursing home. If you go directly to a nursing home from home or from a doctor's office, Medicare will not pay. Some people are admitted to the hospital specifically to meet this requirement before moving to a nursing home for rehabilitation.

Can I use my health insurance to pay for a nursing home after Medicare runs out?

No. Standard health insurance does not cover nursing home care beyond what Medicare covers. After your 100 Medicare days end, your health insurance will not pay for the nursing home. You would need to pay out of pocket, use Medicaid, or rely on other resources like long-term care insurance or Veterans benefits.

What if I have too much money to may have access to for Medicaid right now?

You can spend down your assets by paying for nursing home care out of pocket until you fall below your state's Medicaid limit. However, there are rules about how quickly you can give away money or transfer assets — Medicaid has a "look-back" period, usually five years, and transferring assets too quickly can delay your Medicaid may be able to access. Speak with an elder law attorney or your state's Medicaid office before making large transfers.

If I have long-term care insurance, will it cover all my nursing home costs?

It depends on your policy. Long-term care insurance policies vary widely in how much they pay per day, how many days they cover, and what types of care they cover. Some policies pay a fixed daily amount; others pay a percentage of the actual bill. Read your policy documents or call your insurance company to understand exactly what your coverage includes and what your out-of-pocket costs would be.

Can my family help pay for my nursing home without affecting my Medicaid may be able to access?

Yes, but it depends on how they help. If family members pay the nursing home directly on your behalf, that money does not count as your income or assets. However, if they give you money and you then pay the nursing home, that money counts as your income. The safest approach is to have family members pay the nursing home directly and to keep records of those payments.