Does Medicare pay for a nursing home?

Short answer: Medicare pays for a short rehab stay. It does not pay for living in a nursing home long term. That surprises a lot of families, usually at a bad moment, so here's how it actually works.

What Medicare covers

Original Medicare (Part A) can pay for up to 100 days in a skilled nursing facility per benefit period, but only when you need daily skilled care such as nursing or physical therapy.

The catch most people miss is that you usually need a hospital stay of at least three days in a row as an admitted inpatient first. Nights spent "under observation" don't count toward those three days, even if you were in a regular hospital bed. If a nursing home stay might follow, ask the hospital directly whether you're an inpatient or under observation.

What you pay:

• Days 1 to 20: nothing per day.
• Days 21 to 100: a daily coinsurance amount that Medicare sets each year.
• After day 100: everything.

Coverage also ends earlier if you stop needing skilled care, even if you're still there.

Medicare doesn't pay for custodial care, meaning help with bathing, dressing, eating and getting around, when that's the main thing someone needs. That is most long-term nursing home care.

Medicare Advantage plans have to cover skilled nursing too, but they set their own rules. Many require prior approval or use a network of homes, and some drop the three-day hospital requirement. Call the plan before you choose a home.

Where Medicaid comes in

Medicaid pays for more long-term nursing home care than anyone else. To qualify, you need limited income and assets plus a medical need for that level of care, and the details vary a lot from state to state.

When you apply, the state looks back 60 months at any assets you gave away or sold for less than they were worth. Gifts made in that window can delay coverage, which is why people get caught out by moving money to their kids shortly before applying.

There are protections so that a husband or wife still living at home isn't left with nothing. And the nursing home has to be Medicaid-certified, so ask how many Medicaid beds it has before admission.

Other ways people pay

Savings, long-term care insurance, and VA benefits for some veterans. The rules are complicated and differ by state. Every state has a free State Health Insurance Assistance Program (SHIP) with counselors who can walk you through Medicare. For Medicaid planning, an elder law attorney is often worth the fee.