Private insurance rarely covers the full cost of nursing home care
Most private health insurance plans do not pay for long-term nursing home stays. They may cover a short rehabilitation stay after a hospital visit — usually 20 to 100 days depending on your plan — but they do not cover custodial care, which is the day-to-day information with bathing, dressing, eating, and toileting that most nursing home residents need.
The distinction matters because it determines who pays. If you need skilled nursing care (wound care, medication management, physical therapy) right after surgery or a hospital stay, your insurance may cover part of it. If you need a nursing home because you can no longer live alone, insurance will not cover it. You or your family will pay out of pocket, or you will need to look at Medicaid, which does cover long-term nursing home care once your assets fall below your state's limit.
Key Takeaways
- Private insurance may cover 20 to 100 days of skilled nursing care after a hospital stay, but the exact number depends on your specific plan.
- Insurance does not cover custodial care — the personal information with daily living that most long-term nursing home residents receive.
- Once your private insurance coverage ends, you pay the full nursing home bill yourself until your savings are depleted enough to meet your state's Medicaid threshold.
- Medicaid, not private insurance, is the program that covers long-term nursing home stays for people who have spent down their assets.
- You should review your insurance plan's skilled nursing facility coverage before you need it, because the rules vary widely between plans.
How private insurance covers skilled nursing after hospitalization
When you leave a hospital and cannot go straight home, your doctor may send you to a nursing home for rehabilitation. This is called a skilled nursing facility (SNF) stay. Your private insurance may cover this if three conditions are met: you spent at least three consecutive days in the hospital, you were admitted to the nursing home within a certain number of days (usually 30), and the care you need is skilled care — not just help with daily tasks.
Your insurance plan will specify how many days it covers. Some plans cover 20 days fully, then require you to pay a daily copay for days 21 through 100. Others cover fewer days or have different cost-sharing arrangements. You need to know your plan's exact terms before you need the care, because you cannot change them once you are in the nursing home.
The nursing home must also be in your insurance network or be one your plan recognizes as acceptable. If you go to a facility your insurance does not work with, you may have to pay the full bill yourself, even if your plan would normally cover that type of stay elsewhere.
What happens when your insurance coverage runs out
Once your private insurance coverage ends — whether that is day 20, day 100, or whenever your plan's limit is reached — you become responsible for the full cost of the nursing home. The facility will not discharge you; instead, you or your family must pay the bill directly. Nursing home costs vary by state and by facility, but they commonly range from $6,000 to $10,000 per month or more.
At this point, you have three options: pay out of pocket if you have the savings, look into whether you meet your state's Medicaid rules for nursing home coverage, or discuss with the facility whether they have financial information programs or payment plans. Some facilities will work with families on payment arrangements, but this is not may provide.
This is why many people end up on Medicaid for nursing home care. They use their private insurance for the first part of their stay, exhaust their savings paying the facility directly, and then become poor enough to meet Medicaid's asset limits. At that point, Medicaid takes over the bill for as long as they remain in the nursing home.
The difference between skilled care and custodial care
Insurance companies distinguish between skilled care and custodial care because skilled care requires a nurse or therapist, while custodial care is help with activities of daily living. Skilled care includes wound dressing changes, intravenous medication, catheter management, physical therapy, occupational therapy, and speech therapy. Custodial care includes bathing, dressing, toileting, eating information, and medication reminders given by a nursing aide.
Many nursing home residents need both. A person recovering from a hip fracture might need skilled physical therapy for the first month, then custodial care for years afterward. Insurance covers the first month; you pay for the years that follow. The nursing home staff will document what type of care you receive, and your insurance company will use that documentation to decide what to pay.
If you disagree with your insurance company's decision about what counts as skilled care, you can file an appeal. The nursing home's social worker or case manager can help you understand the appeal process and gather the medical records your insurance company needs to reconsider.
Long-term care insurance is different from health insurance
Some people have a separate policy called long-term care insurance. This is not the same as private health insurance. Long-term care insurance is designed specifically to cover nursing home stays, assisted living, and in-home care for people who need help with daily activities. It covers custodial care, which regular health insurance does not.
Long-term care insurance is purchased separately, usually when you are younger and healthier, and you pay premiums for it just like you do for health insurance. If you have this type of policy, check your documents or call the insurance company to find out what it covers. If you do not have it, you cannot buy it once you are already in a nursing home or have been diagnosed with a condition that would make you ineligible.
Many people do not have long-term care insurance because it is expensive and not everyone can afford it. If you do not have it, you will need to rely on your savings, Medicaid, or family support to pay for a nursing home stay.
What to ask your insurance company before you need nursing home care
Call your insurance company and ask for the specific details of your skilled nursing facility coverage. Write down the answers to these questions: How many days of skilled nursing care does my plan cover? Do I have to pay a copay or coinsurance for those days? Does the facility have to be in-network? What counts as skilled care under my plan? What do I need to do to make sure my stay is covered — do I need pre-authorization?
Ask the company to send you the information in writing, or take notes during the call and follow up with an email asking them to confirm what you discussed. This creates a record you can refer to if there is a dispute later about what your plan covers.
If you are already in a nursing home or facing one soon, ask the facility's social worker or case manager to contact your insurance company on your behalf. They do this regularly and know what questions to ask.
When to talk to a social worker or financial counselor
If your insurance coverage is about to end and you do not have savings to cover the full cost of the nursing home, talk to the facility's social worker or financial counselor as soon as possible. They can tell you whether you might meet your state's Medicaid rules, help you understand what assets count toward the limit, and explain the process for explore. They can also tell you about any other programs or resources that might help.
Do not wait until your insurance runs out to have this conversation. The sooner you know what your options are, the more time you have to plan and gather the documents you will need.
Frequently Asked Questions
Will Medicare cover my nursing home stay?
Medicare covers up to 100 days of skilled nursing care after a hospital stay, under the same conditions as private insurance — you must have spent three days in the hospital first. After 100 days, Medicare stops paying and you pay out of pocket or turn to Medicaid if you meet the income and asset limits.
Can I use my health insurance to pay for assisted living instead of a nursing home?
No. Health insurance does not cover assisted living facilities. Assisted living is custodial care, not skilled care. If you need assisted living, you pay out of pocket or use long-term care insurance if you have it. Medicaid does not cover assisted living in most states either.
What if the nursing home says my insurance will not cover my stay?
Ask the facility to put that decision in writing and to tell you which insurance company made the decision. Then contact your insurance company directly to confirm. If your insurance company says they will not cover it, ask them why and request the specific policy language that applies to your situation. You have the right to appeal their decision.
Do I have to use a nursing home my insurance approves, or can I choose any facility?
You can choose any facility, but if it is not in your insurance network or not recognized by your plan, your insurance may not pay for it. Before you choose a facility, check with your insurance company to confirm they will cover a stay there. If you choose an out-of-network facility, you may have to pay the full bill yourself.
What happens to my private insurance if I move to Medicaid for nursing home care?
Your private insurance does not go away. You keep it for other medical services like doctor visits and prescriptions. Medicaid covers only the nursing home care. You may have both at the same time, and they coordinate to cover different services.