Medicare Coverage for Nursing Home and Long-Term Care

Long-term care is one of the most significant financial risks in retirement, and Medicare's role in covering it is frequently misunderstood. The short version: Medicare covers short-term skilled nursing care but does not cover long-term custodial care. Understanding that distinction could save your family from a very expensive surprise.

What Medicare Actually Covers in a Nursing Home

Medicare Part A covers care in a Medicare-certified skilled nursing facility (SNF) under specific conditions. This is rehabilitative care following a hospital stay -- the goal is to help you recover and return home, not to provide indefinite residence.

To qualify for Medicare-covered SNF care, three requirements must be met. First, you must have had a qualifying inpatient hospital stay of at least three consecutive days (not counting the day of discharge). Second, your doctor must certify that you need daily skilled nursing or skilled therapy services for the condition you were hospitalized for. Third, you must be receiving care in a Medicare-certified SNF.

Coverage structure:

• Days 1 through 20: Medicare covers 100% of covered costs
• Days 21 through 100: You pay approximately $204 per day in coinsurance; Medicare covers the rest
• Day 101 and beyond: Medicare covers nothing; you pay all costs

This coverage resets with each benefit period (after you have been out of a hospital or SNF for 60 consecutive days).

What Medicare Does NOT Cover: Custodial Care

Medicare does not cover custodial care -- the assistance with daily activities like bathing, dressing, eating, and mobility that many people need in a nursing home long-term. If the care you need is primarily help with these activities rather than skilled medical or therapeutic care, Medicare does not cover it regardless of how much you need it or how long you have paid into the system.

The average cost of a private room in a nursing home in 2026 is over $100,000 per year nationally. Medicare does not cover this. For most people, these costs must be covered by personal savings, long-term care insurance, or Medicaid (once savings are spent down to Medicaid eligibility levels).

Medicaid and Long-Term Care

Medicaid is the primary payer for long-term nursing home care in the United States. It covers nursing home care for people who have limited income and assets. The asset limits for Medicaid eligibility vary by state but are generally quite low -- sometimes as little as $2,000 in countable assets for a single individual.

People who have savings above the Medicaid threshold must spend down those assets on care costs before Medicaid will pay. This is a significant financial planning issue for middle-class families. Medicaid planning -- legally protecting assets while preparing for potential long-term care needs -- is a specialty area of elder law that many families benefit from consulting about in their 50s and 60s, well before they might need care.

Long-Term Care Insurance

Long-term care insurance is private insurance designed to cover the costs Medicare and Medicaid do not cover. Premiums are substantially lower when purchased in your 50s or early 60s than when you are older and your health status may reduce your ability to qualify. Policies vary significantly in what they cover (home care, assisted living, nursing home care, or all three), benefit amounts, inflation adjustments, and elimination periods.

Long-term care insurance has become more expensive and less available than it was 20 years ago as insurers recalibrated their pricing. Hybrid life insurance policies with long-term care riders have emerged as an alternative that provides both death benefit protection and long-term care coverage, with premiums that do not increase over time.

Home and Community-Based Care Under Medicaid

For people who want to receive care at home rather than in a nursing facility, Medicaid's home and community-based services (HCBS) programs can fund personal care, adult day services, and other supports. These programs are often administered through Medicaid waivers, and in many states there are waiting lists for services. Planning ahead and applying early is important.