When Medicare Won't Pay for Nursing Home Care

Medicare does not cover the cost of custodial long-term care, including nursing home care. Medicare will pay for a temporary stay (no more than 100 days) in a skilled nursing facility following an inpatient hospital stay. But custodial long-term care—meaning assistance with the activities of daily living, without a need for skilled nursing care—is never covered by the program.

It's important to understand whether Medicare benefits will cover care received in a nursing home, and under what circumstances, and what your options are if you need care that isn't covered by Medicare.

What Is a Nursing Home?

The Centers for Medicare and Medicaid Services (CMS) does not consider most nursing home care to be medically necessary. This is because nursing homes provide care that does not have to be performed by a skilled or licensed medical professional such as a doctor, nurse, or therapist (e.g., clinical psychologists, physical therapists, occupational therapists, and speech therapists).

For example, nursing homes often provide assistance with bathing, cleaning, cooking, dressing, hygiene, and even walking or mobilizing. Nursing home employees who provide this type of assistance do not have to have medical training.

Unfortunately, many seniors in nursing homes are there for reasons of safety. They are unable to live independently due to dementia or other medical conditions, and they may not have family or loved ones who can support them.

According to the February 2019 Vital Health Statistics report by the U.S. Department of Health and Human Services (HHS), the majority of people in nursing homes require care. The percentages of people needing help are considerable:

• Bathing: 96.7%
• Dressing: 92.7%
• Eating: 59.9%
• Toileting: 89.3%
• Transferring In or Out of Bed: 86.8%
• Walking: 92%

An Increasing Need for Nursing Home Care

According to a Centers for Disease Control (CDC) analysis, there were 1.6 million licensed nursing home beds available in 2020 and 1.3 million long-term residents in those beds. The average age of people moving into long-term care facilities is 84.

It is estimated that 10,000 baby boomers will turn 65 every day through 2030. Life expectancy is also on the rise. In 2022, life expectancy in the U.S. averaged 77.5 years (74.8 years for men, 80.2 years for women), an increase from 70.1 years in 1960. Living longer increases the odds of having multiple chronic medical conditions, and with this comes an increased risk of debility.

The Real Cost of Nursing Home Care

According to the Genworth Cost of Care Survey, the average monthly cost in the United States for a shared room in 2024 was $9,277 per month. For a private room, it was $10,646 per month. This means the average nursing home costs a resident $111,324 per year for a shared room and $127,752 for a private room.

The average payout for Social Security retirement benefits in January 2025 was $1,837.91 per month for a total of about $22,055 per year. This makes nursing homes too expensive for the average Social Security recipient, unless they have significant other income or assets. There are alternatives for people who need nursing home care, however, these are only available under specific circumstances.

Does Medicare Pay for Nursing Home Care?

Skilled nursing care is care provided by registered nurses under the supervision of a doctor. This type of care may be required if you or your loved one experiences a medical event such as a stroke, heart attack, or broken bone.

Medicare pays for care in a skilled nursing facility (which may be integrated with a nursing home, depending on the location) if you were recently admitted to the hospital and require daily skilled care. To qualify for this Medicare Part A coverage, you need to have been admitted to the hospital as an inpatient for at least three days. The day you are transferred to the skilled nursing facility does not count as one of the three days (note that there are some exceptions to this rule, so ask your doctor for details).

CMS defines inpatient care in very specific ways. Under the Two-Midnight Rule, Medicare only considers you an inpatient (as covered by Medicare Part A) if your stay is expected to last longer than two midnights and if your level of care is considered medically necessary. This means you cannot be in the hospital receiving care that could just as easily be administered elsewhere.

If you don't meet these qualifications, you will be placed under observation, care that is covered by Medicare Part B. If your care was considered observation rather than inpatient, you will not be eligible for skilled nursing facility coverage after you leave the hospital.

If you do get approval for skilled nursing care, Medicare Part A covers the first 20 days for you with no out-of-pocket costs. For days 21 to 100, you will pay $209.50 per day in 2025. After 100 days, you are required to pay for your own care. Many Original Medicare beneficiaries have supplemental coverage from Medigap, an employer or retiree plan, or Medicaid, all of which can help to pay the out-of-pocket costs for skilled nursing facility care.

What Services Does Medicare Pay For?

Some of the services Medicare will cover during your stay in a skilled nursing facility (while you're receiving daily skilled nursing care) include:

• Medical transportation between facilities
• Your room and meals 
• Care from a healthcare provider
• Physical, occupational, or speech-language therapy
• Dietary counseling
• Medications (Medicare Part D provides outpatient drug coverage, but Medicare Part A covers medications received in a hospital or skilled nursing facility, which means there are no additional costs during the first 20 days)
• Medical supplies and equipment
  

What to Do When Medicare Stops Paying for Nursing Home Care

If you're been in a skilled nursing facility for 100 days (following an inpatient hospital stay), Medicare will no longer cover the cost of your care. You may have other options to continue to receive care, depending on your circumstances.

Medicaid Coverage for Nursing Home Care

Because Medicare does not cover long-term custodial nursing home care, many people turn to Medicaid. According to the 2019 Vital Health Statistics report, 61.2% of residents in nursing homes used Medicaid as their payment source.

Not everyone qualifies for Medicaid, as the program is designed to help people with low incomes. For children, pregnant women, and adults under age 65, Medicaid eligibility is based solely only income. But for adults age 65 or older, Medicaid eligibility requires both a low income and very limited assets.

Assets include:

• Annuities
• Bank accounts
• Automobiles (excluding your primary vehicle)
• Bonds
• Cash amounts exceeding $2,000 (there is some state-to-state variation on this)
• Cash surrender value of life insurance policies (applies to "whole life" and "universal life" policies, not term life policies)
• Keogh plans
• IRAs
• Money market funds
• Mutual funds
• Pension funds
• Real estate (excludes your primary residence up to a certain value depending on the state)
• Stocks
• Stock options

Each state ultimately sets its own financial threshold for eligibility, but the federal government sets a minimum requirement for each state. You will need to look up requirements for your state to see if you qualify.

Many seniors spend down their assets to qualify for Medicaid. Others try to protect their assets by transferring them to family and loved ones.

If you choose the latter, make sure to consult an elder law attorney to discuss your options, since the transfer must not have occurred within 60 months of your Medicaid application. Transfers that occur during this look-back period could result in penalties from Medicaid, potentially delaying your care coverage for months to years. This will depend on how much money you transfer and in what state you live.

Private Coverage for Nursing Home Care

It is possible to purchase long-term care (LTC) insurance to help pay for nursing home care. These insurance plans are used to pay for around 10% of nursing home expenses in the United States.

LTC insurance can be helpful if you need care, but premiums tend to be expensive and out of range for many people. These premiums usually get higher the older you get, especially if your health is on the decline. Individuals over 65 years old and who have chronic medical problems could see monthly premiums in the thousands of dollars.

Insurance companies can also deny coverage based on pre-existing conditions, so private long-term care coverage has to be purchased well before you're in need of long-term care and while you're relatively healthy.

Long-term care insurance pays out when you have a triggering event that requires nursing home or long-term home health care. Typically this means you need assistance with at least two activities of daily living—bathing, walking dressing, toileting, eating, or transferring to or from bed.

Those payouts can be put towards care-specific services, but the amount will be based on your specific LTC insurance plan. They may or may not cover the full cost of care, and the payouts may only last a certain length of time.

Other Options to Pay for Care

If you can't afford to pay out of pocket for nursing home care and don't qualify for Medicaid, there may be other options for obtaining care. These options will depend on how much support you have from family and what alternatives are available in your state or local area. For example:

• At-home care may be an option if it is safe for you to continue living in your home and/or you have a support network that can help ensure your well-being. Medicare does pay for certain home health therapies and services such as physical therapy, home health aide, and medical equipment. These services could help make it possible for you to continue to live independently. The at-home care covered by Medicare must be medical care, rather than custodial care. Custodial care can be covered in conjunction with skilled medical care, but Medicare will not pay for at-home custodial care on its own.
• Non-profit care is available in some places. These facilities provide physical therapy and other services to people who qualify. Some disease-specific foundations may also offer financial assistance if you need care but can't afford it. 
  

Summary

The cost of nursing home care far exceeds the average Social Security retirement benefit, leaving the cost out of reach for many people.

Unfortunately, Medicare only covers skilled nursing facility care for a short period and only after an inpatient hospital stay. Medicare doesn't cover custodial long-term care, either at home or in a nursing home.

The majority of people turn to Medicaid for coverage but this could require you to spend down your assets to become eligible. Some people may turn to private long-term care insurance instead, but this coverage is expensive and has to be purchased years in advance of when it will be needed.