The Four Main Ways People Pay for Nursing Home Care
Most people pay for nursing home care through one of four routes: their own savings, Medicare (for short stays only), Medicaid (for those with limited income and assets), or long-term care insurance. Which one covers you depends on how long you need care, how much money you have, and whether you bought insurance before entering the home. Many people use a combination — for example, Medicare for the first 100 days, then Medicaid after savings run out.
The cost itself varies widely by state and by the home. A semi-private room in a nursing home costs between $6,000 and $10,000 per month on average, though some states run higher and some lower. A private room typically costs 10 to 20 percent more. These are out-of-pocket figures; what you actually pay depends on which of the four routes covers you.
The nursing home will ask you to complete a financial form before or shortly after admission. This form asks about your income, savings, property, and insurance. Be honest and complete — the home uses this to figure out who pays the bill and in what order. If you do not know your own financial details, ask a family member or bring bank statements and insurance documents to the admission meeting.
Key Takeaways
- Medicare covers up to 100 days of skilled nursing care after a hospital stay of at least three days, but only if you need daily skilled care — not just help with daily tasks.
- Medicaid pays for long-term nursing home care once your savings fall below your state's limit, which ranges from $2,000 to $4,000 depending on where you live.
- If you have savings above your state's Medicaid limit, you pay the nursing home directly until your money runs out, then Medicaid takes over.
- Long-term care insurance, if you bought it before needing care, can cover part or all of the nursing home bill, though policies vary widely in what they pay.
- The nursing home must tell you in writing how much you will owe and which programs cover what before you sign the admission agreement.
Medicare: Short-Term Skilled Care Only
Medicare covers nursing home stays, but only under specific conditions and only for a limited time. You must have been in a hospital for at least three consecutive days, and you must enter the nursing home within 30 days of leaving the hospital. The nursing home must be Medicare-certified, which most are, but you should ask the admissions staff to confirm.
Medicare pays for up to 100 days. For the first 20 days, Medicare covers the full cost. From day 21 to day 100, you pay a coinsurance amount — a daily fee that changes each year. In 2024, this is $194.50 per day, though the amount increases annually. After day 100, you pay the full bill yourself or switch to Medicaid if you meet the income and asset limits.
Medicare only covers skilled nursing care — meaning daily care that requires a nurse or therapist, such as wound care, physical therapy, or medication management through an IV. If you need help with bathing, dressing, and meals but do not need skilled care, Medicare will not pay. The nursing home's social worker can tell you whether Medicare will cover your specific situation before you are admitted.
Medicaid: Long-Term Care When Savings Are Low
Medicaid is the largest payer of nursing home care in the United States. Unlike Medicare, Medicaid covers long-term stays with no time limit — you can stay as long as you need care. However, Medicaid only pays once your income and savings fall below your state's limits. These limits vary: most states set the asset limit between $2,000 and $4,000 for a single person, though a few states allow slightly more. Your home and one vehicle do not count toward this limit.
To be covered by Medicaid for nursing home care, you must also meet an income test. Most states use the income cap method, which means your monthly income cannot exceed a certain amount — usually around $2,400 to $2,500, though this varies by state. Some states use the spend-down method instead, which allows higher income if you spend the excess on care costs. Ask the nursing home's social worker which method your state uses.
If you have more savings than your state allows, you pay the nursing home directly until your savings drop to the limit. This is called spending down. Once you reach the limit, Medicaid takes over and pays the home directly. The home cannot ask you to leave because you have spent down to Medicaid — that is illegal. However, you should explore for Medicaid as soon as you know you will need long-term care, because the process takes time and there may be a waiting period.
Paying Out of Pocket From Your Own Savings
If you have savings above your state's Medicaid limit, you pay the nursing home directly. This is straightforward: the home sends you a bill each month, usually due within 30 days. You pay from your bank account, investments, or other liquid assets. The nursing home must give you an admission agreement that states the monthly cost and what happens if you cannot pay.
Many people pay out of pocket for the first few months or years, then switch to Medicaid once their savings run out. This is a normal path. Keep records of what you pay — you will need these records when you explore for Medicaid, because Medicaid will ask where your money went. Payments to the nursing home are covered; gifts to family members or large purchases may affect your Medicaid start date.
If you run out of money before you expected, tell the nursing home's business office and the social worker when ready. Do not wait until you cannot pay. The home can help you explore for Medicaid, and there are rules that protect you from eviction during the process process. However, the home is not required to keep you if you are not paying and Medicaid has not yet approved you, so acting early matters.
Long-Term Care Insurance
If you bought a long-term care insurance policy before needing care, it may cover part or all of your nursing home bill. These policies vary widely: some pay a fixed daily amount (for example, $200 per day), some pay a percentage of the bill, and some cover the full cost up to a limit. Check your policy documents or call your insurance company to find out what your policy covers.
To use your policy, you will need to file a claim with the insurance company. The nursing home's business office can often help you with this. You may need a doctor's statement saying you need nursing home care, and the insurance company may send a nurse to assess you. The approval process usually takes a few weeks. Once approved, the insurance company may pay the nursing home directly, or they may reimburse you after you pay.
Long-term care insurance does not cover all costs in most cases. If your policy pays $200 per day and the nursing home costs $300 per day, you pay the difference. Also, many policies have a waiting period — usually 30, 60, or 90 days — during which you pay out of pocket before the insurance kicks in. Read your policy carefully or ask your insurance agent to explain what is covered and what is not.
How to Prepare Financially Before Admission
Before you or a family member enters a nursing home, gather these documents: bank statements, investment account statements, insurance policies (including long-term care insurance), property deeds, and recent tax returns. Bring these to the admission meeting or give them to the nursing home's social worker. The home needs this information to figure out how to pay for your care and to help you explore for Medicaid if needed.
Ask the nursing home for a written estimate of monthly costs before you sign anything. This estimate should break down room and board, services, and any extra charges. Ask whether the home accepts Medicaid, because not all homes do. Ask what happens if you run out of money — will the home keep you if you are on Medicaid, or do they only accept private pay? These answers matter before you commit.
If you think you may need Medicaid, start the process process before you enter the home if possible. Medicaid applications take time, and some states have waiting lists. Your state Medicaid office or the nursing home's social worker can tell you how to start. If you explore before admission, Medicaid may cover your care from day one; if you explore after, there may be a gap where you pay out of pocket.
What Happens If You Cannot Afford the Home You Choose
Nursing home costs are high, and many people cannot afford their first choice. If the home you want is too expensive, you have a few options. First, ask the home whether they have a semi-private room instead of a private room — semi-private is usually cheaper. Second, ask whether they accept Medicaid; if they do, you can stay once your savings run out, even if you cannot afford it now. Third, look for a different home that costs less or is closer to your budget.
Some homes are run by nonprofits or religious organizations and may offer lower rates or financial information. Your state's long-term care ombudsman office can tell you which homes in your area accept Medicaid and what they cost. The ombudsman can also tell you about the quality of care at each home, which matters as much as the price. Do not choose a home based only on cost; a cheaper home with poor care is not a bargain.
Frequently Asked Questions
Can I keep my house and still get Medicaid to pay for nursing home care?
Yes. Your primary home does not count toward the Medicaid asset limit, so you can own a house and still may have access to for Medicaid. However, after you die, Medicaid may try to recover what it paid for your care by placing a lien on your estate. The rules vary by state, so ask your state Medicaid office or a nursing home social worker about recovery in your state.
What if I have a spouse at home — does their income count toward my Medicaid limit?
No. Your spouse's income and assets are not counted when determining your Medicaid may be able to access for nursing home care. However, there are rules about how much of your joint assets your spouse can keep. These rules are complex and vary by state. A social worker or elder law attorney can explain how they explore to your situation.
Do I have to spend down all my savings before Medicaid will pay?
Yes, you must spend your savings down to your state's limit before Medicaid covers nursing home care. However, spending on the nursing home itself counts as spending down — you do not have to give the money away or spend it on other things. Once your savings reach the limit, Medicaid takes over.
Can the nursing home charge me extra fees on top of the monthly cost?
The nursing home can charge for services beyond basic care — for example, phone service, cable TV, or a private room upgrade. However, they must tell you about these charges in writing before you incur them. If you are on Medicaid, the home cannot charge you extra for basic care, though they can charge for optional services. Ask the admissions staff for a complete list of what is included and what costs extra.
What if I need to leave the nursing home — do I get a refund?
Most nursing homes do not refund monthly fees, even if you leave partway through the month. However, your admission agreement should state the home's refund policy. Read this carefully before you sign. If you are unhappy with the home, you can leave, but you will owe for the full month in most cases.