Demystifying Medicare Coverage for Nursing Homes
Medicare's coverage for nursing home stays is highly restricted, primarily limited to short-term, medically necessary stays in a Skilled Nursing Facility (SNF) and explicitly excludes coverage for most long-term residential or custodial care. Understanding these distinctions and requirements is essential for beneficiaries and their families.
The Critical Distinction: Skilled vs. Custodial Care
Medicare coverage is determined by the type of care: skilled or custodial.
- Skilled Care: Requires licensed professionals (nurses, therapists) for short-term recovery, like physical therapy or complex wound care. Medicare Part A covers this in a certified SNF.
- Custodial Care: Assistance with daily living activities (bathing, dressing) by non-licensed aides. Medicare does not cover this, which is the majority of long-term nursing home care.
Strict Requirements for Skilled Nursing Facility (SNF) Coverage
Medicare coverage for an SNF requires meeting specific criteria:
- Qualifying Inpatient Hospital Stay: A minimum of three consecutive days as an inpatient in a hospital; observation status does not count.
- Timely Transfer: Admission to a Medicare-certified SNF within 30 days of hospital discharge.
- Daily Skilled Care Requirement: A doctor must order daily skilled services that can only be provided in an SNF. Coverage ends if daily skilled care is no longer needed.
- Medical Necessity: Skilled services must treat a condition from the hospital stay or one that arose in the SNF. Coverage stops if recovery plateaus and care is not medically necessary.
The 100-Day Benefit Period and Cost-Sharing
Medicare covers up to 100 days per benefit period for qualifying SNF stays. A benefit period starts with a hospital or SNF admission and ends after 60 consecutive days without such care.
Costs during a benefit period include:
- Days 1–20: Medicare pays 100% of covered skilled care costs.
- Days 21–100: A daily coinsurance applies (e.g., $209.50 in 2025). Supplemental insurance may cover this.
- Day 101 and beyond: The patient is responsible for all costs.
Comparison Table: Medicare vs. Medicaid for Nursing Home Care
| Feature | Medicare | Medicaid |
|---|---|---|
| Coverage Type | Strictly short-term, medically necessary skilled care | Long-term care, including custodial services |
| Primary Goal | Rehabilitation and recovery to return home | Permanent residential care and daily living assistance |
| Duration | Up to 100 days per benefit period | No time limit, as long as eligibility is met |
| Eligibility Basis | Needs skilled care, recent qualifying hospital stay | Meets state-specific income and asset limits |
| Cost for Patient | No cost for days 1–20; daily coinsurance days 21–100 | Most care is covered for eligible individuals, who may contribute most of their income to costs |
| Facility Type | Medicare-certified Skilled Nursing Facility (SNF) | Medicaid-certified nursing facility |
Additional Considerations and Planning Ahead
Medicare's limitations necessitate planning. Options for long-term care include private insurance, savings, and veterans' benefits. Be aware that observation status in a hospital can prevent meeting the qualifying stay requirement. Discuss admission status with hospital staff.
Medigap and Medicare Advantage Plans: Medigap may cover the coinsurance for days 21-100. Some Medicare Advantage plans might offer extra benefits or waive the three-day hospital stay rule, but check plan details.
Conclusion
Medicare coverage for nursing homes is limited to short-term, rehabilitative skilled care following a hospital stay, not long-term custodial care. Strict criteria, the 100-day limit, and coinsurance lead to significant out-of-pocket costs. For long-term needs, consider Medicaid, long-term care insurance, or savings. Understanding these limitations is crucial for planning.
What are the main limitations of Medicare coverage in nursing homes?
Key limitations include a maximum of 100 days per benefit period for skilled nursing care, requiring a 3-day qualifying inpatient hospital stay, excluding long-term custodial care, and coverage ceasing if daily skilled care is no longer needed. Daily coinsurance applies for days 21-100.
How does the 100-day limit for Medicare coverage in a skilled nursing facility work?
Medicare covers 100% of skilled care costs for the first 20 days. A daily coinsurance applies for days 21-100 ($209.50 in 2025). After day 100, the beneficiary is responsible for all costs within that benefit period.
What is the difference between skilled care and custodial care in a nursing home?
Skilled care requires licensed professionals for rehabilitative purposes (e.g., physical therapy). Custodial care is non-medical assistance with daily activities (e.g., bathing) and is not covered by Medicare.
Will Medicare pay for nursing home care for a patient with dementia?
Medicare does not cover long-term nursing home care for dementia, as this is typically custodial care. However, it covers medically necessary services like doctor visits and prescriptions.
Can I get Medicare coverage for a nursing home stay if I was in the hospital under observation status?
Time under observation status does not count toward the required three-day inpatient hospital stay for Medicare SNF coverage. Formal inpatient admission is necessary.
What are my options when Medicare coverage for my nursing home stay ends?
Options after Medicare coverage ends include Medicaid (if eligible), long-term care insurance, veterans' benefits, or paying out-of-pocket. Planning is advised.
How does a new benefit period begin for Medicare nursing home coverage?
A new benefit period starts after 60 consecutive days without hospital or skilled nursing care. To qualify for further SNF coverage, another three-day inpatient hospital stay is needed.
