Typically Medicare does not cover nursing home care. In some instances, Medicare may cover very limited periods for rehabilitation after a hospital stay of at least three days in a nursing home. Generally, you should not rely on Medicare for any coverage of an extended nursing home stay.
When thinking about Medicare nursing home coverage, it is important to distinguish custodial care and nursing care. Custodial care is assistance with the activities of daily living (ADLs), such as cleaning, cooking, using the toilet, getting dressed, and so on. Nursing care is care provided by professionals under medical supervision with the aim of curing or mitigating diseases or limitations of functioning.
One way to think about Medicare and custodial care is that Medicare pays for custodial care only while you are in a rehabilitation or skilled nursing facility for medical care. And the duration of that care is limited to 99 days.
Are nursing homes the same thing as skilled nursing facilities (SNFs)?
All Skilled Nursing Facilities (SNFs) are nursing homes, but not all nursing homes are SNFs. There are also nursing homes called Intermediate Care Facilities (ICFs), which provide nursing care, but at a lower level of staff skills than SNFs.
The hierarchy, in terms of the skill requirements for the nursing staff, are SNFs, ICFs, and then custodial care homes, which are generally referred to as “nursing homes” by most people (many people regard nursing homes and assisted living facilities as one in the same) and focus on help with custodial care (sometimes called “personal care”) which focuses on activities of daily living assistance.
Related: Assisted Living vs Nursing Homes
Nursing homes are typically long-term care facilities while SNFs and ICFs can be long-term care for patients who need ongoing extensive medical care, or transitionally for patients who are recovering from an injury or accident.
Related: Skilled Nursing vs Assisted Living
Be aware that one physical facility may provide skilled nursing care, intermediate care, and custodial care under one roof; the difference is in the level of staffing and the staff skill levels.
More Details: Skilled Nursing Facilities vs Nursing Homes
Generally, Medicare Does Not Cover Nursing Homes
Medicare makes a very firm distinction between medical care (or skilled care) and custodial care. Individuals may be unable to care for themself because of medical care, such as a period after surgery, or when a patient needs to learn to walk again after a hip replacement. In that case, custodial care given in conjunction with medical care is covered, but for no more than 99 days.
And Medicare further assumes that when a senior needs custodial care because of medical care, that period will be limited. Therefore, post-hospital care for rehabilitation is covered only as long as the patient is making satisfactory progress towards rehabilitation. If that progress stops, the coverage stops.
When Does Medicare Cover Nursing Homes?
Medicare Part A covers medically necessary SNF care when skilled nursing services are needed. Again, please note that SNF, ICF, and custodial care may all be provided under one roof – it is the level of skill needed to care for the patient that makes the difference. Examples include the need for sterile dressings, maintenance of surgical drains, etc. Custodial care may be covered by Medicare Part A when it is medically necessary.
Medicare Part B covers the service of physicians and other medical professionals such as nurse practitioners, nurses, respiratory therapists, and physical therapists. These services are covered regardless of location; the fact that they are provided in a SNF, ICF, or in a custodial care facility is irrelevant. Part B of Medicare will also cover durable medical equipment and medical supplies if they are medically necessary. But Medicare Part B does not cover any purely custodial services.
Medicare Part C, also known as Medicare Advantage, allows plans to offer some services that are not offered under Original Medicare coverage (Parts A and B.) Medicare Advantage plans may offer nursing home care that Medicare will not cover. This is totally dependent on policies of your individual plan; check with the plan.
Medicare Part D covers prescription drugs only, regardless of the location where they are taken, but does not cover any nursing home stays.
Does Medicaid Cover Nursing Homes?
Yes. But Medicaid is a state/Federal partnership, and states have wide latitude to place conditions on the services they provide. What is a covered service in one state may not be covered at all in another, and the extent of services varies widely as well. In general, though, if a senior simply cannot live alone without custodial care and is Medicaid-eligible, nursing home care is covered.
In 1965 when Congress created both the Medicare and Medicaid programs, it decided that Medicare would cover only limited, short-term rehabilitative care in a nursing facility, while long-term custodial care would be the responsibility of Medicaid.
Related: Does Medicare Cover Assisted Living
The Medicaid eligibility requirements meant, essentially, that a senior must have very limited financial income and assets in order to receive government-funded custodial-only care. These financial restrictions vary by state but income limits are typically between $1,500 – $3,000 per month and resource limits are often max out around $2,000 – $3,000.
This remains the case today. In addition, Medicaid is a joint state/Federal program, and many states impose a five-year “lookback” period on transfers of assets by Medicaid recipients and will seize assets, such as homes, to pay for custodial care when the patient dies. There are lawyers who specialize in ways of protecting assets from Medicaid.
What Are the Disadvantages of Using Medicaid for Nursing Home Coverage?
As noted above, the chief disadvantage of using Medicaid to cover nursing home care is that Medicaid takes essentially all of a person’s assets as compensation, both during and after life.
During life, all Social Security and pension money is taken; only $35 per month is allowed for personal expenses, and property may be seized after death. Inherently, residents have zero economic leverage over the nursing home, making correction of deficiencies problematic, especially if seniors have no advocates in the community, such as family.
Depending on the laws of a senior’s state, a lawyer skilled in senior law may be able to craft a plan to protect assets and pass them on to heirs, but this is not guaranteed.
How Much Does a Nursing Home Cost?
The median (middle of the pack) nursing home cost in the US is around $9,000 per month for a private room and around $7500 per month for a semi-private room – the annual equivalents being $108,000 and $90.000. Few families in the US can bear costs like that when the median family income is around $68,000 per year.
Related: How Much Does Assisted Living Cost?
How to Pay for Nursing Home Care
There are a few primary ways to pay for nursing home care:
- Personal savings
- Help from family members
- Long-term care insurance
Long-term care insurance is becoming increasingly necessary as most individuals and families do not have the means to cover $100k per year in nursing home costs, though long-term care insurance plans typically cost anywhere from $2,000 – $9,000 per year. A final alternative is take out a reverse mortgage or outright sell your home if you own the home you are living in.
Long-term care insurance is cheap at first and becomes more and more expensive to acquire as you age. A 55-year-old man may pay around $1,700 per year. A recent study showed that women will be charged around $1,000 more per year, on average. There are, of course, numerous health conditions that can disqualify individuals from long-term care insurance.