As a lawyer, I have exclusively represented long-term care healthcare providers for over ten years. I have gained useful insight into how people plan—or, in many cases, fail to plan—for the possibility that they may need long-term care. Along the way, I have identified some common misconceptions that many people have about long-term care.

Perhaps the most common misunderstanding I’ve encountered is the belief that Medicare will pay unlimited amounts for nursing home care. This incorrect belief can make people feel secure in not developing a plan for how they will pay for long-term care or delay applying for benefits they may need to cover the costs of long-term care in a nursing home. Unfortunately, working under the mistaken belief that Medicare will pay the nursing home bill can quickly have severe financial consequences for individuals and their families. Genworth’s recent Cost of Care Survey estimates that the average cost of a semi-private nursing home room in the United States is $8,929 monthly. Without an alternate payor source, the financial burden on individuals and families can quickly snowball and devastate a family’s retirement or lifetime savings.

Navigating the complexities of healthcare coverage, particularly Medicare, can be daunting. Understanding what Medicare covers when it comes to nursing home care is crucial for individuals, their families, and caregivers. I do my best to clear up misunderstandings about long-term care so that people can make decisions for their future based on correct information. In this article, we will explore when and under what circumstances Medicare will provide coverage for care in a nursing home.

One caveat: This article applies to Original Medicare. If an individual has a Medicare Advantage Plan, they will have at least as much coverage as Original Medicare, but the costs and specifics of coverage may vary.

Medicare Part A Coverage Limitations and Challenges for Nursing Home Care

Medicare, the federal health insurance program primarily for people 65 and older, covers a range of healthcare services. However, its coverage for nursing home care is limited. Medicare never pays for long-term or custodial care in a nursing home. Medicare Part A covers hospital stays and some skilled nursing facility care and may cover a short-term stay of up to 100 days per benefit period in a skilled nursing facility (“SNF”) under certain conditions. However, this coverage has limitations and challenges that individuals and their families should understand to make informed healthcare decisions.

Duration. One key limitation of Medicare coverage for nursing home care is its duration, which is limited to a maximum of 100 days per benefit period. After this coverage is exhausted, individuals are responsible for bearing all costs unless they have another payor source, such as long-term care insurance or Medicaid.

Eligibility Criteria. Another challenge with Medicare coverage for nursing home care is meeting the eligibility criteria, especially the requirement for skilled care. This can be a complex process, and many individuals may not meet these criteria. As a result, they may have to pay for out-of-pocket nursing home care or explore alternative coverage options.

Cost-Sharing. While Medicare covers the total cost of skilled nursing care for the first 20 days in an SNF, beneficiaries are responsible for a daily coinsurance amount for days 21 through 100. This coinsurance can add up quickly, especially for more extended stays.

The Distinction Between a Skilled Nursing Facility and a Nursing Home

In everyday practice, most people use the term “nursing home” to refer to either a skilled nursing facility (“SNF”) or a nursing home. The distinction between the two can also be challenging to pin down as many facilities serve as both an SNF and a nursing home, offering short-term rehabilitative services and long-term residential care under one roof for a continuum of care. These combined facilities are often called nursing and rehabilitation centers or simply nursing homes. While there are many similarities between the two, SNFs and nursing homes are designed for different lengths and levels of care - and Medicare pays for one, but not the other.

SNFs are designed to provide intensive, short-term rehabilitative care to individuals who have recently been discharged from a hospital. These facilities focus on helping patients recover from an illness, injury, or surgery and regain their independence. They offer a range of services, including physical therapy, occupational therapy, speech therapy, wound care, and other skilled nursing care. Skilled care, which is a key feature of SNFs, involves medical services that require the expertise of licensed healthcare professionals. Medicare may cover short-term stays in SNFs for eligible individuals who meet certain criteria.

Nursing homes, on the other hand, provide long-term residential and supportive care for individuals who need assistance with daily activities and medical care. Unlike SNFs, which focus on short-term rehabilitation, nursing homes cater to individuals who need ongoing assistance due to chronic illness, disability, or frailty. They offer a range of services, including medication administration, wound care, and assistance with medical equipment. However, their main emphasis is on custodial care, which is about maintaining the resident's comfort, safety, and quality of life. Many individuals live in nursing homes for an extended period.

Custodial care does not involve complex medical treatments or procedures requiring the expertise of trained medical professionals. Instead, it emphasizes maintaining the resident's comfort, safety, and quality of life. Certified nursing assistants (“CNA’s”) or personal care aides supervised by licensed nurses or other healthcare professionals typically provide custodial care. Medicare never pays for nursing home care.

What is a Medicare Benefit Period?

Medicare uses a benefit period to track the number of days of skilled nursing facility coverage available to individuals. A benefit period begins on the day an individual starts getting inpatient hospital or skilled nursing facility care and provides up to 100 days of coverage. Once those 100 days of coverage are exhausted or the benefit period otherwise ends, a new benefit period must begin before additional SNF days are available.

A Medicare benefit period ends when an individual hasn't been in a skilled nursing facility or hospital for at least 60 days in a row, or if the individual has been in a skilled nursing facility but hasn't received skilled care for at least 60 days in a row, or if they have used all 100 days of coverage. An individual can have multiple benefit periods in their lifetime but needs to meet the coverage criteria each time to start a new benefit period with up to 100 days of skilled nursing facility care.

Medicare Coverage May End Before the Benefit Period Expires

Medicare may stop covering care in a skilled nursing facility, even if the benefit period has not expired, if the individual no longer needs skilled care or the skilled care is no longer reasonable or necessary to treat the person’s medical condition. Benefits may also terminate if the individual refuses to participate in therapy services or accept the skilled care ordered by their doctor. In these cases, the healthcare provider will provide the individual with a “Notice of Medicare Non-Coverage” (“NOMNC”) notifying them of the stoppage of benefits.

Eligibility Requirements for Medicare Coverage of Skilled Nursing Care

An individual must meet seven criteria to qualify for Medicare coverage of care in a skilled nursing facility:

• Part A Coverage and Available Days. The individual has Medicare Part A (Hospital Insurance) and has available days left in the benefit period.
• Qualifying Hospital Stay: The individual must have had a medically necessary inpatient admission to a hospital for at least three consecutive days. The three-day requirement starts the day of admission but does not include the day of discharge from the hospital. Time spent at the hospital under observation or in the emergency room before admission also doesn’t count toward the three-day qualifying stay, even if this stretches overnight. The individual must enter a skilled nursing facility within 30 days of the conclusion of the qualifying hospital stay.
• Skilled Care. The individual requires daily skilled nursing care or skilled rehabilitation services, which can only be provided by or under the supervision of skilled medical personnel. This care must be ordered by the individual’s doctor.
• Daily Need. The individual must need and receive skilled care daily (or at least five days a week) that can only be provided on an inpatient basis by a skilled nursing facility.
• Reason for Care. Skilled care is being provided for an ongoing condition that was treated during the qualifying hospital stay or for a new condition that started while already receiving skilled care for the ongoing condition.
• Reasonable and Necessary. The care is medically reasonable and necessary for the treatment of the ongoing condition.
• Certified Facility. The SNF is Medicare-certified.

Out-of-Pocket Costs

Even if Medicare covers the costs of skilled nursing care during a benefit period, the individual may still be responsible for coinsurance. Suppose the individual is in a skilled facility for 20 days or less. In that case, there is no coinsurance, and Medicare pays the total cost of services. Beginning on Day 21 and up until the termination of the benefit period (Day 100 or earlier), the individual must pay a daily coinsurance amount. In 2024, the daily coinsurance figure is $204. If the individual has a Medicare Supplement Insurance (Medigap) policy, these costs may be lower.

Understanding The Limitations and Criteria of Medicare is Essential

Understanding the limitations and criteria of Medicare coverage for nursing home care is essential for making informed financial and healthcare decisions. While Medicare Part A offers some short-term benefits for care in a skilled nursing facility, it's important to note that it does not cover long-term custodial care in nursing homes. By dispelling common misconceptions about Medicare coverage, individuals and families can better plan for potential long-term care needs and avoid unexpected financial burdens. Proper planning and knowledge can help ensure a more secure and manageable future when it comes to long-term care.