Does Medicare Pay for Nursing Home Costs?
Key takeaways:
Medicare Part A covers skilled care services in a nursing home setting for up to 100 days per benefit period. However, Medicare does not cover long-term care nursing home care.
The number of days you stay in a facility determines how much Medicare will pay.
The out-of-pocket costs for nursing home care can be high, especially if Medicare is your only source of coverage.
The idea of moving into a nursing home can be overwhelming, even before you start thinking about how to pay for the costs. But it’s helpful to know in advance what insurers, like Medicare, will cover.
Nursing homes offer two types of care: skilled and long term. Skilled care is provided by licensed professionals who treat medical conditions. Nursing homes that provide this kind of care are called skilled nursing facilities (SNFs). Long-term, or custodial, care focuses on assistance with “activities of daily living,” such as bathing and eating, and may not need to be performed by licensed professionals.
Original Medicare does not cover long-term nursing home care, but it offers limited coverage for skilled care services in an SNF.
How much does a nursing home cost?
On average, nursing homes can cost between $7,900 and $9,000 per month. But the costs can be much more or less depending on where you live. For example, you can expect to pay about $13,800 a month to stay in a nursing home in New York state. That’s almost twice the cost of a nursing home in Texas, which averages approximately $5,100 per month.
Other factors that impact the cost of a nursing home include:
Type of room you have
Quality of care you receive
Length of your stay
Extra medical care or services you receive
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Does Medicare cover nursing home costs?
Medicare Part A covers some skilled care services for up to 100 days per benefit period. But these services must be medically necessary and ordered by a healthcare provider. The covered services include:
Physical therapy
Speech-language pathology
Nursing care
Let's say you stay 14 days in an SNF for rehabilitation after hip replacement surgery, and Medicare covers the cost of skilled care services you receive during that time. If you leave the SNF and return 3 months later for additional therapy, Medicare will consider this a new benefit period. While you’ll still be covered, you may have to pay coinsurance at some point in your stay, even if you paid it during the previous benefit period.
Medicare does not cover long-term care services. If you need to stay in a nursing home to receive help with activities of daily living — such as bathing, dressing, and eating — or have a chronic condition that requires ongoing care, Medicare generally will not cover those costs. In this case, you may need to consider other options, such as Medicaid or private insurance.
What are the out-of-pocket costs you should consider?
The length of time you stay in an SNF affects how much Medicare will pay. The table below compares the potential out-of-pocket costs per benefit period, based on the number of days you stay in a facility.
Length of stay in an SNF | Medicare Part A coverage | Your out-of-pocket costs |
Days 1-20 | Full | $0 |
Days 21-100 | Partial | You’re responsible for a coinsurance of up to $200 daily. |
Day 101 and beyond | None | You’re responsible for covering all of the costs. |
For the first 20 days of the benefit period, Medicare Part A covers the full cost of the skilled care you receive in an SNF. As of Day 21, you may be responsible for paying up to $200 of coinsurance daily. If Medicare is your only source of coverage, you could face a bill of up to $16,000 if you remain in the SNF for up to 100 days.
Once you reach Day 101 of the benefit period, you will be responsible for all costs associated with your stay in the nursing home.
Remember that you may have to pay coinsurance during each new benefit period. Suppose you go into an SNF for 28 days and pay your share of the costs. If you leave and return to the SNF after a few months, you might have to pay the coinsurance again after Day 20.
How do I qualify for nursing home coverage under Medicare?
To be eligible for SNF benefits under Medicare, you must meet the following conditions:
You must have Medicare Part A coverage, typically obtained when you turn 65 or when you meet certain eligibility requirements.
Typically, you must have been admitted to a hospital as an inpatient for at least 3 days before entering the SNF. (This is known as the 3-day rule.) However, due to the COVID-19 pandemic, there are some exceptions that allow coverage to kick in without a prior hospital stay.
You must enter the SNF within 30 days of leaving the hospital.
The care you receive in the SNF must be directly related to the care you received during your hospital stay.
A healthcare provider must determine that you need daily skilled care, which must be provided by trained nursing or therapy staff.
The SNF you choose must be certified by Medicare. You can search and compare the quality of care of Medicare-certified nursing homes in your area with this tool.
You may qualify for SNF coverage if you have a health problem treated during a hospital stay, which then requires skilled care, even if it wasn’t the primary reason for your hospitalization. The same is true if you develop a new condition that requires skilled care while you’re already in an SNF for a hospital-related condition.
For example, suppose you were admitted to an SNF for hip replacement rehabilitation and you develop an infection that requires IV antibiotics during your stay. In that case, the skilled services you receive to manage the infection are covered.
If you leave the SNF and return within 30 days for further care, the 3-day rule doesn’t apply. The same is true if you temporarily stop receiving skilled care in the SNF but resume it within 30 days.
How do the different parts of Medicare cover nursing homes?
Here's a breakdown of how each part of Medicare handles nursing home coverage:
Medicare Part A: Part A generally covers hospital stays, SNF care, hospice care, and some home health services. However, Part A does not cover long-term stays in nursing homes.
Medicare Part B: Part B primarily covers outpatient medical services, like healthcare provider visits. It does not cover nursing home care or its associated costs.
Medicare Part C: Also referred to as Medicare Advantage, Part C offers an alternative approach to obtaining Medicare benefits by using private insurance companies. Some Medicare Advantage plans include coverage for SNF stays and long-term care in nursing homes.
Medicare Part D: While Part D does not cover nursing home care, it may cover prescription medications needed as part of a nursing home stay.
What services does Medicare cover in a nursing home?
Medicare generally covers the following services and items provided in an SNF:
A semi-private room shared with other patients
Meals and counseling to ensure your nutritional needs are met
Specialized medical care from licensed healthcare professionals
Physical therapy that’s aimed at improving strength, mobility, and overall physical function
Occupational therapy designed to help you perform daily activities independently and safely
Speech-language pathology services that help with communication, swallowing, and other related challenges
Support from professional social workers
Prescription medications
Necessary medical supplies
Ambulance transportation if required
Ultimately, the services you receive in an SNF will depend on your needs and the treatment plan that’s developed by your healthcare providers.
Does Medicare supplement insurance help cover nursing home costs?
Medicare supplement (Medigap) policies generally do not provide coverage for long-term care in nursing homes. However, most Medigap plans cover the costs of coinsurance for SNF stays. Out of the ten available Medigap plans, only Plan A and Plan B do not cover these costs. But plans C, D, F, G, K, L, M, and N cover some portion of SNF coinsurance costs.
The amount of SNF coinsurance costs covered varies by Medigap plan. For instance, Plan K only covers 50% of the coinsurance costs that kick in after Day 20 in an SNF. Plan L, however, covers 75% of these costs. Carefully review each Medigap plan's benefits to decide which best suits your needs.
How does Medicare Advantage coverage compare?
Medicare Advantage plans offer the same level of SNF care as original Medicare. However, the cost-sharing amounts and coverage limitations may vary depending on the plan. Some Medicare Advantage plans cover long-term custodial care as an optional benefit that typically requires an additional premium.
The bottom line
Medicare Part A covers up to 100 days of skilled care services in a nursing home per benefit period. However, Medicare doesn't pay for long-term care. So you may want to consider options like Medicaid or private insurance if you anticipate needing this type of care.
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References
American Speech-Language-Hearing Association. (n.d.). Who are speech-language pathologists, and what do they do?
Centers for Medicare & Medicaid Services. (n.d.). Compare Medigap plan benefits.
Centers for Medicare & Medicaid Services. (n.d.). Nursing home care.
Centers for Medicare & Medicaid Services. (n.d.). Skilled nursing facility (SNF) care.
Centers for Medicare & Medicaid Services. (2022). Items & services not covered under Medicare.
Centers for Medicare & Medicaid Services. (2023). Choosing a Medigap policy: A guide to health insurance for people with Medicare.
Genworth. (2022). Cost of care survey.
LongTermcare.gov. (n.d.). What is long-term care? Administration for Community Living.
National Cancer Institute Dictionary of Cancer Terms. (n.d.). ADL.
