Alyssa Lane
Nursing homes are long-term residential facilities that provide ongoing medical attention and personal care services for older adults who require round-the-clock support and cannot be cared for at home. While the national median cost for a semi-private room in a nursing home is $8,669 per month, the fees can vary depending on the location and services provided. This raises the question: does medical insurance cover these expenses? The answer depends on the type of insurance and the individual's circumstances. Medicare, for example, generally does not cover long-term custodial care in nursing homes, but it may cover skilled nursing facilities for short periods after hospitalization. Medicaid, on the other hand, can cover up to 100% of nursing home costs for qualified low-income individuals, with daily limits and eligibility criteria varying by state. Private long-term care insurance may also provide benefits, but these differ significantly between companies and policies.
| Characteristics | Values |
|---|---|
| Average cost of a semi-private room in a nursing home in 2023 | $8,390 per month |
| Average cost of a private room in a nursing home in 2023 | $9,584 per month |
| Average cost of a semi-private room in a nursing home in 2023 | $8,669 per month or $104,028 per year |
| Average Medicare covered stay in a nursing home | 22 days |
| Maximum Medicare covered stay in a nursing home | 100 days |
| Type of insurance that covers 100% of the costs of a nursing home | Medicaid |
| Type of insurance that covers little to no costs of a nursing home | Medicare |
| Type of insurance that may provide some benefits for long-term care residents | Private long-term care insurance |
| Type of insurance that covers long-term care in VA nursing centers, non-VA nursing homes, and State Veterans Homes | Veterans benefits |
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What You'll Learn
Medicaid and Medicare
Medicare is a federal health insurance program that covers medical services for older adults and people with certain disabilities. It does not cover long-term custodial care, such as nursing homes. However, it can cover a skilled nursing facility for up to 100 days after a qualifying hospitalization. Medicare Part A covers inpatient care or major medical care, while Medicare Part B provides benefits for outpatient care.
Medicaid, on the other hand, is a public health insurance program for Americans with limited financial means. It serves eligible older adults, younger adults, children, expectant mothers, and people with disabilities. Medicaid covers 100% of the costs of a nursing home up to a daily limit, which varies by state and plan. To be eligible for Medicaid coverage in a nursing home, individuals must meet certain income and resource requirements, which differ across states. Only nursing homes licensed and certified as Medicaid Nursing Facilities (NF) can accept Medicaid patients. These facilities are required to provide specific nursing and related services to ensure the physical and mental well-being of their residents.
It is important to note that long-term care insurance policies, including Medicare and Medicaid, may have different coverage limits and exclusions. Therefore, it is advisable to carefully review the terms of your insurance policy or consult with a qualified professional to understand the specific coverage provided by your plan.
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Private insurance
Medicare generally does not cover long-term custodial care, such as nursing homes. However, it can cover a skilled nursing facility after a qualifying hospitalization. Skilled nursing care would fall under Medicare Part A if you have an inpatient hospitalization for at least three days, and a doctor notes that it is medically necessary. In this case, Medicare will pay for up to 100 days of care in a skilled nursing facility during each benefit period. After 20 days, patients are partially responsible for the costs. In 2025, patients without supplemental coverage pay $209.50 in coinsurance for every covered day between 21 and 100.
Medicaid, on the other hand, may cover 100% of the costs of a nursing home up to a daily limit. This federal plan provides nursing home or custodial benefits for lower-income individuals who qualify. Most nursing homes accept Medicaid payment.
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Long-term care insurance
There are different types of long-term care insurance policies available. Traditional long-term care insurance policies typically involve paying annual premiums for life, or a shorter period, in exchange for coverage of long-term care costs. However, many insurance companies no longer offer these traditional policies, and those that do may increase premiums over time. Hybrid policies, on the other hand, combine life insurance and long-term care, allowing beneficiaries to receive a death benefit if the policyholder passes away before needing long-term care. Another type of hybrid policy is a long-term care annuity, which provides long-term care insurance at a multiple of the initial investment amount, with gains received tax-free.
When considering long-term care insurance, it's important to keep in mind that age, health, policy coverage limits, and the scope of services covered can impact the cost of a long-term care policy. It's also worth noting that long-term care insurance may not be the only solution, as there are other ways to fund nursing home costs, such as through private funds, retirement savings, or government programs like Medicaid and the Department of Veterans Affairs.
In terms of nursing home coverage, long-term care insurance can provide benefits for care in a variety of places, including nursing homes, assisted living facilities, and skilled nursing facilities. However, it's important to note that coverage may vary depending on the insurance company and the specific policy. Additionally, long-term care insurance may not cover all the costs associated with a nursing home stay, and individuals may still need to pay out-of-pocket for some expenses.
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Costs of nursing homes
The cost of nursing homes varies depending on the state, facility, level of care required, and the type of room. In 2023, the national median cost for a semi-private room was between $8,390 and $8,669 per month, or $104,028 per year. The median cost of a private room was $9,584 per month or $116,796 per year. By 2025, the median cost of a private room had increased to $10,326 per month, while a semi-private room cost $9,197.
Nursing homes are generally more expensive than other senior living options due to the high-level medical care they offer, including on-site medical professionals, round-the-clock care, on-site therapies, and amenities for people with significant physical or cognitive care needs. The cost of a nursing home stay can also be influenced by location, duration of stay, and any additional services required, such as physical therapy, speech therapy, or memory care. Some facilities offer all-inclusive rates, while others charge extra for these services.
The cost of nursing home care can be covered by insurance, Medicaid, or private funds. While traditional health insurance plans and Medicare provide little to no coverage for long-term care costs, Medicaid may cover 100% of the costs for qualified beneficiaries. However, meeting the eligibility requirements can be challenging, as it involves having limited income and very few assets. Private long-term care insurance may also provide benefits for long-term care residents, but coverage varies depending on the company and policy.
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Eligibility
Medicare:
Medicare generally does not cover long-term custodial care in nursing homes. However, it can cover short-term stays in skilled nursing facilities for up to 100 days per benefit period if deemed medically necessary after a qualifying hospitalization. To qualify for this coverage, the patient must be enrolled in Medicare Part A (hospital insurance). It's important to note that after 20 days, patients are partially responsible for the costs, and out-of-pocket expenses can add up quickly.
Medicaid:
Medicaid, a public health insurance program for low-income individuals, may cover 100% of the costs of a nursing home up to a daily limit. Eligibility for Medicaid is based on income and personal resources, and the specific requirements vary from state to state. It's important to check with your state's Medicaid office to understand the eligibility criteria and coverage details.
Private Long-Term Care Insurance:
Private long-term care insurance plans can vary significantly in their coverage of nursing home costs. Some plans may cover skilled care, while others may offer more comprehensive coverage, including non-skilled custodial care. Age, health status, and pre-existing conditions can impact eligibility and the cost of premiums. It's essential to carefully review the terms and conditions of private insurance policies to understand what is covered and any limitations or waiting periods that may apply.
Veterans Benefits:
The Veterans Administration (VA) Health System offers coverage for long-term care in VA nursing centers, non-VA nursing homes, and State Veterans Homes. Eligibility for these benefits depends on medical need, service-connected disability status, and the veteran's insurance coverage.
Employer-Sponsored or Private Health Insurance:
Most employer-sponsored or private health insurance plans provide limited coverage for long-term care, similar to Medicare. If they do offer coverage, it is typically only for short-term, medically necessary skilled care. It's important to review the specific terms of these insurance plans to understand their eligibility criteria and coverage limits.
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Frequently asked questions
Medicare generally does not cover long-term care in a nursing home. However, it can cover a skilled nursing facility for up to 100 days after a qualifying hospitalization.
Medicaid may cover 100% of the cost of nursing home care for qualified beneficiaries. Most nursing homes accept Medicaid payment.
Private long-term care insurance may provide some benefits for long-term care residents but coverage varies depending on the company and policy.
