Most of us hope to grow old in the comfort of our own home. But aging in place isn’t always practical—or even possible—for people living with significant health, mobility, or cognitive challenges.

Nursing homes offer a safe alternative for older adults who need high-level, long-term care beyond what assisted living can provide. Still, expenses can add up quickly. And that leads many people to ask, does Medicare cover nursing home costs?

“Many older adults and their caregivers assume it does,” said NCOA's Rosalind Newsholme, Program Associate, Center for Economic Well-Being. “Unfortunately, we see time and again how costly that assumption can be.”

Before you or someone under your care enters a nursing home, it’s essential to understand what Medicare will and will not cover, Newsholme advised. In this guide, you’ll find the answers you need to make an informed financial decision.

Understanding Medicare and nursing homes 

What is Medicare?

Medicare is a federally funded health insurance program that covers services ranging from inpatient hospital care to outpatient doctor’s visits and more. All Americans age 65 and older, and some younger people who live with a qualifying disability or health condition, are eligible for this benefit. 

Keep in mind that Medicare differs from Medicaid. Medicaid is a public health insurance program, administered by individual states, that reduces barriers to care for low-income people of all ages. 

What are nursing homes?

Also known as skilled nursing facilities, nursing homes provide ongoing medical attention and personal care services for people who need that support and can’t get it at home.

In addition to housing and three daily meals, nursing home residents benefit from a full range of services, including (but not limited to):

Assistance with activities of daily living (ADLs)

Personal care attendants help with things like:

• Eating
• Bathing
• Dressing
• Using the toilet
• Getting into and out of bed

Care from a registered nurse (RN)

Qualified practitioners provide medical support such as:

• Wound care
• Medication management
• Blood pressure monitoring
• Temperature checks
• Injections

Rehabilitative care

Trained professionals work to address injury, illness, and certain disabilities through:

• Physical therapy
• Occupational therapy
• Speech therapy
• Respiratory therapy
• Cognitive therapy

For some people, a nursing home stay is temporary; for example, they’ve been discharged into short-term care following a hospitalization or surgery and need a little extra help to recover. But most nursing home residents remain there permanently because they require ongoing personal care.

Does Medicare cover nursing home costs?

Generally, no. But there are limited exceptions.

“The most important thing to understand is that Medicare will not pay for long-term care of any kind, including nursing home care,” Newsholme explained. “That’s because long-term care services are not considered medically necessary and don’t require a registered nurse to provide.”

However, certain short-term stays do qualify for Medicare coverage. And Medicare enrollees who are permanent nursing home residents “can absolutely use their health care benefits for their intended purpose,” said Newsholme. Depending on the plan, those benefits can include outpatient services, diagnostic testing, durable medical equipment, and prescription medications.

Let’s dig into the details.

Original Medicare: Narrow coverage for nursing home costs

As with other forms of long-term care, nursing home care typically is not not needed to diagnose or treat an illness, injury, or disease or to provide relief of related symptoms (i.e., medically necessary).^1,2 That means Medicare won’t pay for it … except in one specific situation: following a qualifying hospital stay.³ 

According to Medicare.gov, a qualifying hospital stay describes an inpatient admission that lasts at least three consecutive days, not counting the day of discharge. If a patient meets this requirement, original Medicare will pay for nursing home costs as long as:

• The patient is enrolled in Medicare Part A (hospital insurance)
• A doctor orders the skilled nursing care
• That care occurs in a Medicare-certified facility
• The patient begins receiving care within 30 days their hospital discharge

There are limits to this coverage. Notably, Medicare only pays for up to 100 days of care in a skilled nursing facility during each benefit period.⁴ And, after 20 days, patients are partially responsible for the costs. In 2024, patients without supplemental coverage pay $204 in coinsurance for every covered day between 21 and 100.

“Benefit periods and coinsurance can lead to unexpected out-of-pocket expenses for patients in short-term nursing home care,” Newsholme explained. “Two hundred and four dollars a day adds up fast, which is why we want older adults and caregivers to be clear: just because Medicare covers qualifying skilled nursing care, that care isn’t totally free.” 

Medicare Advantage and nursing homes: It depends on your plan

Medicare Advantage plans, also called Medicare Part C plans, are private health plans that contract with Medicare to provide benefits. People who get their health care insurance through one of these plans receive, at a minimum, the same coverage as people who opt for original Medicare.

That said, not every Medicare Advantage plan offers identical choices in skilled nursing facilities. Patient out-of-pocket costs can vary, too.⁴ Some Advantage plans require a copay for the first 20 days of a covered nursing home stay.⁵ Other plans may offer more coverage.

“I always advise that people check with their Medicare Advantage administrator before making any decisions about skilled nursing home care,” Newsholme said.

Medicare Supplement (Medigap) and nursing homes: Out-of-pocket help

Medigap is optional additional coverage purchased through private insurers. These supplemental plans help bridge the gap between what original Medicare will pay for, and what those services cost out-of-pocket.

“Some Medigap policies will cover a patient’s nursing home coinsurance for days 21 through 100,” Newsholme pointed out. “And that can add up to significant savings.”

As with Medicare Advantage, policy details can differ. Be sure to check yours to understand how coverage will impact your budget.

Nursing home costs and payment options

What do nursing homes cost? 

Nursing home care is expensive. According to Genworth’s interactive Cost of Care Survey, the monthly median cost in the United States is $7,908 for a shared room in a nursing home. Private rooms are even pricier at $9,034.⁵

These numbers are hardly affordable for many Americans—especially those who live on limited or fixed incomes. Older adults who need to stay in a skilled nursing facility for longer than 100 days understandably may wonder, what happens when Medicare stops paying for nursing home care?

Alternative ways to pay for nursing home care

Other options exist to help pay for nursing home care. These include:

• Medicaid. Medicaid pays 100% of nursing home costs for people who qualify. However, rules are strict, and each state dictates its own eligibility requirements and coverage limitations. Contact your state’s Medicaid office to learn about the program guidelines in your state.
• Veterans benefits. The Veterans Administration (VA) Health System covers long-term care in VA nursing centers, non-VA nursing homes, and State Veterans Homes. Benefits depend on medical need, service-connected disability status, and the veteran’s insurance coverage. Reach out to a VA social worker for guidance. 
• Long-term care insurance. Most plans will cover the costs of living in a nursing home, including skilled and non-skilled care. However, certain conditions apply before benefits kick in, and waiting periods can range from 30 to 90 days. Be sure to do some research before signing up for a policy.
• Reverse mortgages. Reverse mortgages convert home equity into cash that can be used to pay for long-term care. Beware, however: if the homeowner needs to move into a nursing home for more than 12 consecutive months, the mortgage may immediately be due in full.⁶
• Private assets. Many people requiring long-term nursing care also must dip into personal savings, or use Social Security income, pension payments, retirement accounts, and other funds (such as a loan from a relative) to cover the expense.

Medicare coverage for other care options 

Does Medicare cover nursing home care for dementia? What about other types of long-term care? Here are some alternatives.

• Home health care
  Some older adults who wish to age in place may successfully do so with in-home care. Home health care provides the same skilled nursing as nursing homes do. In certain circumstances, Medicare can help cover some of the costs.
• Assisted living
  Assisted living provides older adults with a higher level of daily living support than independent living communities do—but less skilled care than a nursing home. In general, Medicare will not cover assisted living costs.
• Hospice care
  Older adults with a terminal condition may choose to receive end-of-life pain management and comfort care at home. Also known as hospice care, Medicare generally will pay for these services for people enrolled in Part A.
• Memory care
  Older adults with an official Alzheimer’s or other dementia diagnosis are eligible for memory care services. As with nursing homes, Medicare won’t pay the costs of memory care facilities—though certain services do qualify for coverage.

How to enroll in a Medicare plan

Although coverage for long-term nursing home care is limited, Medicare provides other important benefits for nursing home residents. Part B covers certain medically necessary services (such as diagnostics and treatment) as well as the costs of physical, occupational, and speech therapy after 100 days of being in the facility.^7,8 Part D covers prescription drugs, usually filled by a long-term care pharmacy that contracts with the nursing home.⁹ That’s why it can make good sense to apply for Medicare benefits if you’re eligible. 

Timing is critically important when enrolling in Medicare. There are three specific opportunities to be aware of: 

• Initial Enrollment Period (IEP): This is when eligible older adults can first sign up for Medicare. Initial enrollment includes a person’s 65th birthday month, as well as the three months leading up to it and the three months following.
• Special Enrollment Period (SEP): This allows eligible beneficiaries who missed their IEP to join Original Medicare and sign up for a Part D prescription drug plan. Specific rules apply.
• Open Enrollment Period (OEP): Running annually between Oct. 15 and Dec. 7, this timeframe allows eligible beneficiaries to join, switch, or drop their health and/or prescription drug coverage. 

Signing up for Medicare may feel confusing, but it doesn’t have to be. To learn more about Medicare, visit NCOA’s resource page. You can also talk to a licensed broker who meets NCOA’s Medicare Standards of Excellence. They’ll guide you through and explain your options—without pressuring you into buying a specific plan.

Also, State Health Insurance Assistance Programs (SHIPs) offer free and unbiased insurance counseling and assistance to Medicare-eligible individuals, their families, and caregivers.

And be sure to visit NCOA’s BenefitsCheckUp to browse for other benefits programs that can help pay for health care, food, prescription drugs, utilities, and other basic living costs. 

The bottom line 

Medicare will pay for nursing home costs on a very limited basis. Benefits only apply to short-term stays of 100 days or less following a qualifying hospitalization. Even then, patients often are responsible for out-of-pocket costs that quickly can add up to a significant unexpected expense. 

Medicare will not cover the costs of long-term personal (non-skilled) care, which is what most nursing home residents need. And that care is expensive: on average, $9,032 monthly for a private room in the U.S. If you or someone you know is considering nursing home care, make sure you fully understand what services Medicare does and does not pay for. It’s also important to explore other options for covering the cost of long-term care. 

Sources

1. Medicare.gov. Long-term care. Found on the internet at https://www.medicare.gov/coverage/long-term-care 

2. Administration for Community Living. What is Covered by Health & Disability Insurance? Found on the internet at https://acl.gov/ltc/costs-and-who-pays/what-is-covered

3. Medicare.gov. Medicare and skilled nursing facility care. Found on the internet at https://www.medicare.gov/publications/11359-Medicare-Skilled-Nursing-Facility-Care-Getting-Started.pdf

4. Medicare.gov. Medicare coverage of skilled nursing facility care. Found on the internet at https://www.medicare.gov/Pubs/pdf/10153-Medicare-Skilled-Nursing-Facility-Care.pdf

5. Genworth. Cost of Care Survey. Found on the internet at https://www.genworth.com/aging-and-you/finances/cost-of-care.html

6. Consumer Financial Protection Bureau. When do I have to pay back a reverse mortgage loan? Found on the internet at https://www.consumerfinance.gov/ask-cfpb/when-do-i-have-to-pay-back-a-reverse-mortgage-loan-en-236/

7. Experience.care. Medicare Part B reimbursement in long-term care. Found on the internet at https://experience.care/blog/medicare-part-b-reimbursement-in-long-term-care/ 

8. Department of Health and Human Services. Memorandum Report—Medicare Part B Services for Nursing Home Residents: 2002 (OEI -05-05-00240). Found on the internet at https://oig.hhs.gov/oei/reports/oei-05-06-00240.pdf 

9. Medicare.gov. Health care & prescriptions in a nursing home. Found on the internet at https://www.medicare.gov/what-medicare-covers/what-part-a-covers/health-care-prescriptions-in-a-nursing-home