How To Pay For Nursing Home Care
Medicare pays for short-term skilled nursing care and rehabilitation following hospitalization, but does not cover nursing home or assisted living costs. For that, you may need Medicaid, private long-term care insurance or Veterans Affairs benefits.
Nursing home care is extremely expensive in the U.S. Costs can run from $5,000 to an astronomical $25,000 per month, according to Caring.com.1
Many people think that Medicare covers long-term nursing home coverage. But unfortunately, that’s not true.
Medicare covers limited, short-term periods of inpatient care, and only in a skilled nursing facility (SNF) or rehabilitation facility after a hospital stay. There are strict guidelines about what types of nursing care Medicare will and won’t cover.
What Nursing Care Does Medicare Cover?
Medicare will pay for nursing home care when you have just been released from a hospital. It will pay for short-term, intensive rehabilitation after release.
Medicare covers the care, services and medical supplies while you’re in the nursing home recovering from a serious illness, injury or medical condition. The care must be provided in one of the following facilities:
- The skilled nursing facility wing of a hospital
- A stand-alone skilled nursing or rehabilitation facility
- The skilled nursing or rehabilitation unit within a “multilevel” facility
According to the Centers for Medicare and Medicaid Services (CMS), Medicare covers nursing home care in two ways:
- Original Medicare Part A covers short-term, medically necessary skilled care at a nursing home (or in your home with a home health care aide) for an illness or injury and you meet certain conditions. Medicare does not cover most nursing home care that’s called custodial care, which means assistance with activities of daily living like bathing, dressing and using the bathroom.
- Medicare Advantage Plans (Part C) may cover some nursing home care. CMS says that plans typically don't pay for this care unless the plan has contracted with the nursing home. Talk to your plan carrier about nursing home coverage before you make any arrangements to enter a nursing home. Also ask your plan if they review the contracted nursing home’s quality of care.
When Does Medicare Pay for Nursing Care?
To qualify for nursing home coverage under Medicare, you must meet the following conditions:
- Recent hospital stay
Your care in a skilled nursing or rehabilitation facility bust begin within 30 days of an inpatient hospital stay of at least three days (not including the day of discharge).
- Physician-prescribed need:
Your physician must prescribe nursing home care for daily skilled nursing or physical rehabilitation. If you do not need skilled care every day, Medicare won’t cover nursing home care, though it may cover home care.
- Medicare-approved facility:
Inpatient skilled nursing or rehabilitation care must be provided by a Medicare-certified facility.
- Improving condition:
Medicare covers nursing home care only as long as you are getting better. Once your doctor, the facility and Medicare have found that your condition is stable, Medicare will no longer cover inpatient nursing home care.
How Much Does Nursing Care Cost With Medicare?
If you qualify for Medicare coverage of nursing care, Medicare Part A will pay for a limited amount of inpatient treatment for a limited amount of time in the facility (after you meet your Part A deductible, which is $2,484 per benefit period in 2021).
- Days 1 to 20 of an inpatient stay: Medicare pays all covered charges, except for extras like a telephone or television, or a private room that isn’t deemed medically necessary.
- Days 21 to 100 during any one benefit period: Medicare pays all covered charges except a daily coinsurance amount. In 2021, that amount is $185.50 per day. A private Medigap supplemental insurance policy might pay some or all of this coinsurance amount, as well as the full or partial amount of your Medicare Part A deductible for inpatient nursing facility care.
- After 100 days during any one benefit period: Medicare no longer covers any costs.
Some Medicare Advantage (Part C) plans may offer more coverage than Part A. Be sure to ask your plan carrier about its nursing home coverage and payments.
Medicare Prescription Drug Coverage (Part D) in Nursing Homes
Part D drug coverage does apply when you are in a nursing home or other institution, as long as you fill your covered prescriptions from a long-term care pharmacy that works with your plan. This long-term care pharmacy usually contracts with (or is owned and operated by) the facility.
If you do not have a Medicare Advantage Plan with prescription drug coverage, or if you have Original Medicare but no Part D Prescription Drug Plan, Medicare will automatically enroll you into a Medicare Prescription Drug Plan when you enter a long-term care facility.
If you move into or out of a nursing home or other institution, you are allowed to switch Medicare drug plans at that time. However, “other institutions” do not include assisted living, adult living facilities, residential homes or any kind of nursing home that’s not certified by Medicare or Medicaid. In addition, you can switch Medicare drug plans at any time while you’re living in the facility.
What Are Other Ways to Pay for a Nursing Home?
The other ways that people pay for nursing home care include:
Medicaid, a completely separate program from Medicare, is available to very low income people with few assets other than their house. If you meet the financial requirements, Medicaid can fully cover long-term care, either in a nursing home or at home.
- Private insurance
Long-term care insurance is offered by private companies to pay for nursing care at home or in a facility. Premiums can be expensive, especially for those who purchase LTC policies later in life.
- Veterans Affairs benefits
Those with VA benefits may be eligible for long-term care. Contact your local Department of Veterans Affairs office for details.
Tax Deductions for Nursing Home Care
The cost of room, board and all medical procedures received at a nursing home are tax deductible using the Medical and Dental Expense Tax Credit. Tax deductions work by lowering your taxable income, allowing you to give less money to the government in the form income taxes.
Deducting your expenses will not provide you will direct funds to pay for long-term care, but it can help reduce your overall financial burden and help you reallocate resources elsewhere.
- Finding Help With Senior Care - This comprehensive list of resources offers 300+ resources for finding help with senior care through private and government organizations and programs.
- Find a VA Nursing Home or Residential Care Facility - Locate a facility in your area and request information about qualifying for VA nursing home benefits.
- Money Follows the Person (MFP) Medicaid Program - Get information about this Medicaid program that funds state efforts to help seniors transition back home after assisted living.
- State Medicaid Offices - Contact your state Medicaid office for eligibility requirements and application information.
- State Medicaid Waivers - Find Medicaid waiver programs in your state to see if you are eligible for lower-cost assisted living or in-home care.
- Federal Long Term Care Insurance Program (FLTCIP) - Current or former federal employees may be eligible for discounted long-term care insurance through this national program.
- Aid and Attendance Benefits - Learn more about the eligibility requirements for aid and attendance benefits for veterans in need of long-term care.
Medigap Plans Can Help Pay Out-of-Pocket Costs for Medicare Nursing Care
If Medicare covers your inpatient care at a skilled nursing facility or nursing home, you'll typically be required to pay certain coinsurance and deductible amounts outlined above. Certain Medicare Supplement plans (also called Medigap) can help pay for all or some of these Medicare costs.
A licensed insurance agent can help you determine whether a Medigap plan can help cover the costs of your care, and they can help you apply for a plan if you qualify. You can also compare plans online for free and apply for a plan available where you live.
Compare Medigap plans in your area that pay for skilled nursing facility care.Find a plan
Or call now to speak with a licensed insurance agent: