What does a nursing home cost — and who pays?

Medicare: rehabilitation, not residence

Medicare Part A covers a stay in a skilled nursing facility after a hospital stay — for rehabilitation, for a limited number of days, and only while skilled care is still needed. When the skilled need ends, so does the coverage, whether or not the person can go home.

The qualifying conditions catch families out constantly. The most common trap is the hospital stay that was classified as observation rather than inpatient: it looks identical from the bed, and it does not count. Ask in writing which one it is, on day one.

Coinsurance amounts change every year, so we do not publish a figure here that would go stale. Check the current numbers at Medicare.gov.

Medicaid: the actual payer for long-term care

Medicaid is the largest payer of long-term nursing home care in the country, and unlike Medicare it covers custodial care — help with bathing, dressing, eating, toileting — for as long as it is needed, for people who qualify. Qualifying is means-tested and the rules are set state by state.

Three things decide most cases: the state's income and asset limits, the five-year look-back on transferred assets, and the spousal protections that shelter income and assets for a husband or wife still living at home. Those protections are substantial and frequently missed.

Private pay, and why we publish no estimate

Between the end of Medicare coverage and the start of Medicaid eligibility, most families pay out of pocket. Rates vary enormously by state, metro area, and whether the room is private or shared.

The federal data this site is built on does not contain private-pay rates. We will not invent them. A confident-looking number that is wrong for your area is worse than no number when you are budgeting. Instead, call three homes near you and ask four questions:

• What is the daily rate for a semi-private room, and for a private room?
• What does that rate include, and what is billed separately?
• How often has the rate changed in the last three years?
• Do you accept Medicaid, and could my relative stay in the same room if they move onto it?

What drives the price

Room type, local wage levels, the level of care needed, and whether the home is in a high-cost metro area do most of the work. Ownership matters less to the sticker price than people expect, and staffing matters more to what you get for it — a home with 4.4 nursing hours per resident costs more to run than one with 3.1, and that difference shows up in the bill and in the care.

Other ways care gets paid for

• Long-term care insurance — read the policy before you need it: waiting period, daily benefit cap, inflation protection and what triggers a claim.
• VA benefits — several distinct programmes, plus Aid and Attendance, run separately from Medicare and Medicaid.
• Life insurance conversions and annuities — sometimes useful, frequently mis-sold. Take independent advice before converting anything.

The free call to make first

Every state has a Long-Term Care Ombudsman and a State Health Insurance Assistance Program. Both give free, unbiased counselling and neither is selling anything.