Medicare covers some medical care in a nursing home, but not the cost of living there long-term

Medicare will pay for a limited stay in a skilled nursing facility if you need medical care after a hospital stay — typically up to 100 days. It does not pay for custodial care, which is help with daily tasks like bathing, dressing, and eating. It does not pay for assisted living, memory care, or staying in a nursing home when you no longer need skilled medical services. If you need long-term care, you will need to pay out of pocket, use Medicaid, or have a long-term care insurance policy.

The gap between what Medicare covers and what long-term care actually costs is the reason many people end up spending down their savings or turning to Medicaid. Understanding exactly what Medicare will and will not pay for helps you plan ahead instead of discovering the limits when you are already in a facility.

Key Takeaways

  • Medicare covers up to 100 days in a skilled nursing facility after a hospital stay, but only if you need daily skilled nursing or rehabilitation services.
  • Medicare does not cover custodial care — help with bathing, dressing, toileting, and meals — even in a nursing home.
  • Once you no longer need skilled medical care, Medicare stops paying, even if you remain in the same facility.
  • Medicaid, not Medicare, is the primary government program that pays for long-term custodial care, but it requires you to spend down assets first.
  • Long-term care insurance, purchased before you need care, can cover costs that Medicare and Medicaid do not.

What Medicare Part A covers in a skilled nursing facility

If you spend at least three consecutive days in a hospital and are then admitted to a skilled nursing facility for continued care, Medicare Part A will cover your stay. The facility must be Medicare-certified, and you must need daily skilled nursing care or physical, occupational, or speech therapy — not just help with daily living tasks.

Medicare covers the full cost of days 1 through 20. From day 21 through day 100, you pay a daily coinsurance amount (the amount changes each year). After day 100, you pay all costs yourself. The clock resets if you leave the facility for 60 consecutive days and then return to a hospital for another three-day stay.

Skilled care means services that require a licensed nurse or therapist — wound care, medication management, physical therapy after a stroke, or monitoring after surgery. If a facility determines you no longer need these services and only need help with daily activities, Medicare stops paying even if you stay in the same building.

What Medicare does not cover

Medicare does not cover custodial care, which is the bulk of what long-term care facilities provide. Custodial care includes bathing, dressing, toileting, eating, grooming, and supervision — the daily information that people with dementia, advanced Parkinson's disease, or other chronic conditions need. Even if a nursing home resident needs this care 24 hours a day, Medicare will not pay for it once skilled nursing care ends.

Medicare also does not cover assisted living facilities, memory care units, adult day care, or care in your own home unless it is skilled home health care ordered by a doctor. It does not cover long-term residential care in any setting where the primary need is supervision and personal information rather than medical treatment.

How Medicaid covers long-term care differently

Medicaid, a joint federal and state program, is the primary payer for long-term custodial care in the United States. Unlike Medicare, Medicaid covers the cost of living in a nursing home or assisted living facility when you need help with daily activities — not just skilled medical care. However, Medicaid has strict income and asset limits that vary by state.

To may have access to for Medicaid coverage of long-term care, you typically must spend down your savings to a threshold set by your state — often around $2,000 to $3,000 in liquid assets, though the exact amount varies. Your home is usually not counted as an asset for Medicaid purposes, but your car, bank accounts, and investments are. Once you meet the asset limit, Medicaid covers nursing home costs, though you may be required to contribute your monthly income toward the bill.

Medicaid planning is complex and involves timing, so speaking with an elder law attorney or a Medicaid planner before you need care can help you understand your state's rules and protect assets for your spouse or heirs if that is possible under your state's law.

Long-term care insurance as an alternative

Long-term care insurance is a private insurance policy you purchase before you need care. It covers custodial care in nursing homes, assisted living, memory care, and sometimes care at home. Premiums depend on your age when you buy the policy, your health, and the benefits you choose — the younger and healthier you are, the lower the premium.

The trade-off is that you pay premiums for years or decades before you may ever use the benefit. Some people buy policies and never need them; others buy them and later cannot afford the premiums and must let the policy lapse. A few insurers have stopped selling long-term care policies or raised premiums sharply, so the market has become smaller and more expensive in recent years.

If you have substantial assets and want to protect them from being spent on long-term care, or if you want to avoid Medicaid's asset limits, long-term care insurance may be worth exploring. An insurance agent or financial advisor can help you understand whether it makes sense for your situation.

Planning ahead: what you can do now

If you are still working or recently retired, you have time to consider your options. Some people set aside savings specifically for long-term care. Others purchase long-term care insurance while they are young enough to get reasonable rates. Still others plan to rely on Medicaid and work with an elder law attorney to structure their finances accordingly.

Talk with your family about what kind of care you would want if you became unable to care for yourself, and where you would want to receive it. Discuss who would make decisions if you could not, and put that in writing through a healthcare power of attorney or living will. These conversations are difficult, but they prevent crisis decisions later and give your family clarity about your wishes.

If you are already retired or approaching retirement, review your Medicare coverage, check whether you have any long-term care insurance through a former employer, and consider speaking with an elder law attorney about your state's Medicaid rules. The earlier you understand the landscape, the more options you have.

Frequently Asked Questions

Does Medicare cover nursing home care for dementia?

Medicare covers a skilled nursing facility stay after a hospital admission if you need skilled care — such as wound care or physical therapy — even if dementia is your primary condition. Once you no longer need skilled services and only need supervision and help with daily activities, Medicare stops paying. Medicaid covers custodial dementia care if you meet your state's income and asset limits.

What happens if I run out of Medicare coverage while still in the nursing home?

You become responsible for all costs. The nursing home may ask you to pay out of pocket, or you may need to transition to Medicaid if you meet the asset limits. Some facilities will work with you on payment plans; others may ask you to leave. This is why understanding the limits ahead of time matters — you can plan for what comes next.

Can I use Medicare Advantage to cover long-term care?

Medicare Advantage plans follow the same rules as Original Medicare: they cover skilled nursing facility stays after a hospital stay, but not custodial long-term care. Some Advantage plans offer supplemental benefits like transportation or meal delivery, but these are not the same as coverage for long-term residential care.

Is there a way to protect my assets and still get Medicaid to pay for long-term care?

Medicaid planning strategies exist and vary by state. Some involve trusts, spousal protections, or timing of gifts. These are complex and require an elder law attorney who knows your state's specific rules. Planning before you need care gives you more options than planning after you are already in a facility.

How much does long-term care cost if I have to pay out of pocket?

Costs vary widely by location and type of facility. Nursing homes range from roughly $100 to $300 per day depending on the state and facility quality; assisted living ranges from $50 to $200 per day. A financial advisor or your local Area Agency on Aging can help you research costs in your region.