Who Pays for Nursing Home Care?

1Who pays, side by side

Swipe sideways to see the whole table.

Most families who face a long stay use more than one row in turn: Medicare for the first weeks after a hospital stay, then savings, then Medicaid once savings run low. Understanding each row helps you avoid the mistakes that are hardest to undo.

2Medicare: the short stay after a hospital

Medicare Part A covers care in a skilled nursing facility only after a qualifying hospital stay: at least three days in a row as an inpatient, not counting the day you leave. The care must be daily skilled nursing or therapy for a condition treated in the hospital, and you generally must enter the facility within 30 days of leaving the hospital.

In 2026 Medicare pays the full cost for days 1 to 20 after the Part A deductible of $1,736 per benefit period. For days 21 to 100 you owe $217 a day, which many Medigap policies pay. After day 100, Medicare pays nothing for that benefit period, and coverage ends sooner if you stop needing daily skilled care.

What Medicare never pays for is long-term custodial care, the everyday help with bathing, dressing, eating, using the toilet and moving around, when that is the only care needed. A stay that is mainly custodial is not covered however long it lasts. Medicare Advantage plans cover skilled nursing much as Original Medicare does, often without the three-day rule, but generally do not cover custodial care either.

3The word that can cost thousands: observation

Time in the hospital under observation, or in the emergency room, does not count toward the three inpatient days, even if your parent spends nights in a hospital bed. Hospitals must give written notice, a Medicare Outpatient Observation Notice, when someone has been under observation for more than 24 hours.

The difference is stark. A patient admitted as an inpatient for four days after a fall, who then needs 30 days of rehabilitation, has the first 20 paid in full by Medicare and owes $2,170 for the next ten, often covered by Medigap. The same patient kept under observation would have no Medicare coverage for the nursing facility at all. Ask every day: is this an inpatient stay or observation?

4Medicaid: the long-term payer

Medicaid is the largest payer of long-term nursing home care. To qualify, a person must meet the state's medical need standard, usually a need for help with several daily activities, and its income and asset limits, which are strict and vary by state. The home, one car and personal belongings are often excluded, with a limit on home equity. Many people spend down their savings on care before Medicaid begins to pay. Apply as soon as savings near the limit: Medicaid can cover bills from up to three months before the application month, though that window shrinks for applications from January 2027.

Once on Medicaid, most of the person's monthly income goes toward the cost of care, after keeping a personal needs allowance, which federal rules set at no less than $30 a month and most states set higher, and after paying health insurance premiums. Medicaid pays the rest. Many states also pay for care at home or in assisted living through waiver programs, which can delay or avoid a nursing home. Check the basic Medicaid income test for a first look, though long-term care rules are stricter; our guide to Medicare and Medicaid explains the programs more broadly.

5The five-year look-back

When someone applies for Medicaid long-term care, the state reviews money and property transferred in the previous 60 months. Giving assets away, or selling them for less than they are worth, in that period can bring a penalty period during which Medicaid will not pay for nursing home care, calculated from the amount given away. Well-meant gifts to children or grandchildren are the usual cause.

Some transfers are exempt, such as transfers to a spouse, to a child who is blind or has a disability, or in some cases of the home to a child whose care kept the parent at home. States handle the details differently, so get advice before moving any money, from an elder law attorney or a legal aid office.

6Protections for a spouse at home

When one spouse needs nursing home care and the other stays at home, federal spousal impoverishment rules let the spouse at home keep a share of the couple's savings and enough income to live on. The amounts are updated yearly and vary by state within federal limits, and the home is generally not counted while a spouse lives there.

After the Medicaid recipient's death, states must seek to recover what they paid for long-term care from the estate, but generally not while a surviving spouse, a child under 21, or a blind or disabled child is living, and there are hardship exceptions.

7Other routes worth asking about

Long-term care insurance, if bought years earlier, pays a daily amount. Veterans may qualify for nursing home care through the VA or for extra pension payments for help with daily activities. The PACE program, available in many areas, covers medical and long-term care for people 55 and older who need nursing home level care but can live safely in the community. And Medicare covers hospice for people with a terminal illness, including in a nursing home, though not room and board.

8Questions to ask a facility

Ask whether it is certified by Medicare for skilled nursing and whether it accepts Medicaid, and if so for how many beds. A resident who enters paying privately and later runs out of money may otherwise have to move. Medicare's Care Compare tool shows star ratings, staffing levels and inspection results for every certified nursing home.

10Rules that differ by state

Medicaid long-term care rules differ by state, including asset limits, home equity limits, the personal needs allowance and spousal protections, and your state Medicaid agency has the exact figures. This guide is general information, not legal or financial advice.