Does Insurance Pay for Nursing Home Care?

A nursing home, often referred to as a skilled nursing facility (SNF) or long-term care facility, provides residential care for individuals who require ongoing medical and personal assistance but do not need acute hospital care. These facilities offer a range of services, including round-the-clock nursing care, help with daily activities, and various therapies. Understanding how insurance covers nursing home care can be complex, as coverage depends significantly on the type of insurance policy and the specific nature of care required. Navigating these options is important for individuals and families planning for potential long-term care needs.

Medicare and Nursing Home Care

Medicare, the federal health insurance program for individuals aged 65 or older and certain younger people with disabilities, offers limited nursing home care coverage. It primarily covers skilled nursing facility (SNF) care, which is rehabilitative, not long-term custodial care. Several conditions must be met for Medicare to cover SNF stays.

A qualifying inpatient hospital stay of at least three consecutive days is required before admission to a Medicare-certified SNF. Admission must occur within 30 days of leaving the hospital. Care must be medically necessary, with a physician certifying the need for daily skilled nursing or therapy services to improve, maintain, or prevent condition worsening.

Medicare Part A covers up to 100 days of SNF care per benefit period. A benefit period begins upon inpatient admission to a hospital or SNF and ends after 60 consecutive days out of such a facility. For the first 20 days of a Medicare-covered SNF stay, the beneficiary pays nothing. From day 21 through day 100, a daily coinsurance amount of $209.50 per day applies in 2025.

Medicare does not cover long-term custodial care. Custodial care includes assistance with activities of daily living (ADLs) such as bathing, dressing, eating, and using the bathroom, and is generally not considered skilled care.

Medicaid and Nursing Home Care

Medicaid is a joint federal and state program providing health coverage to individuals with limited income and resources, and it serves as a primary payer for long-term nursing home care. Unlike Medicare, Medicaid can cover both skilled and custodial care in a nursing home for eligible individuals. Eligibility for Medicaid is means-tested, meaning applicants must meet specific income and asset limits, which vary significantly by state.

For a single individual, the asset limit for nursing home Medicaid is typically around $2,000 in most states, though some states have higher limits. Income limits also vary, with a general maximum monthly income often around $2,901 in 2025 for nursing home Medicaid. If an applicant’s income exceeds the limit, some states allow the use of “Qualified Income Trusts” (also known as Miller Trusts) to become income-eligible.

A “spend-down” process may be required where individuals must use their assets to pay for care until their resources fall below the state’s asset limit. Medicaid also has a “look-back period,” typically 60 months (five years), during which asset transfers for less than fair market value are reviewed. Transfers made within this period can result in a penalty period of Medicaid ineligibility, calculated based on the amount transferred and the average cost of nursing home care in the state.

Each state administers its own Medicaid program, leading to variations in eligibility criteria and specific rules. Individuals should consult their state’s Medicaid agency for precise requirements.

Long-Term Care Insurance

Long-term care (LTC) insurance is a private insurance product specifically designed to cover the costs associated with long-term care services, including nursing home care. Policyholders pay premiums, and in return, the policy provides benefits when certain triggers are met, such as the inability to perform a specified number of Activities of Daily Living (ADLs) or cognitive impairment. Typically, an individual must be unable to perform two out of six ADLs (bathing, dressing, eating, toileting, continence, and transferring) or have a severe cognitive impairment to qualify for benefits.

Key features of LTC insurance policies include the daily benefit amount, which is the maximum amount the policy will pay per day for covered services. The benefit period dictates how long the policy will continue to pay, which can range from a few years to the policyholder’s lifetime. An elimination period, similar to a deductible, is a waiting period (e.g., 30, 60, or 90 days) before benefits begin, during which the policyholder is responsible for care costs.

Many policies offer inflation protection options to ensure benefits keep pace with the rising costs of care over time. These options can include simple or compound annual benefit increases, often at a rate of 3% or 5%. LTC insurance can cover a range of services beyond nursing homes, such as assisted living and home care, providing flexibility in care settings.

Other Insurance Types

Several other common types of insurance generally do not provide direct coverage for long-term nursing home care. Private health insurance plans, whether employer-sponsored or individual policies, are typically designed to cover acute medical care, hospital stays, and doctor visits. These plans typically exclude long-term nursing home care and custodial care, focusing instead on short-term medical needs.

Medicare Supplement (Medigap) policies are designed to fill gaps in Original Medicare coverage, such as deductibles and coinsurance. While Medigap plans can cover Medicare’s copayments for skilled nursing facility stays, they do not extend Medicare’s limited coverage to include long-term custodial care.

Some life insurance policies offer long-term care riders, which allow policyholders to access a portion of their death benefit early to pay for long-term care expenses. This is an add-on rider, not an inherent function of the policy, and utilizing it reduces the death benefit paid to beneficiaries.