Contrary to a common assumption, Medicare does not cover long-term residency in a nursing home for ongoing personal care needs. The federal health insurance program is designed primarily for acute medical care, hospital stays, and short-term rehabilitation following an illness or injury. This fundamental distinction is often a source of confusion for patients and their families, as the terms “nursing home” and “Skilled Nursing Facility” (SNF) are frequently used interchangeably. While Medicare Part A may provide coverage for a temporary stay in a Medicare-certified SNF, it will not pay for the extended, non-medical assistance that constitutes the majority of long-term care.
The Critical Distinction: Skilled vs. Custodial Care
Medicare coverage is determined by the type of care a patient requires, which is categorized as either skilled or custodial care. Skilled care involves specialized medical services that must be provided by, or under the supervision of, licensed professionals such as registered nurses or physical therapists. This care is rehabilitative and temporary, focusing on recovery from an acute medical event like a stroke or a complex surgery. Examples include intravenous injections, complex wound care, and intensive physical or occupational therapy.
In contrast, custodial care refers to non-medical assistance with routine daily activities, known as Activities of Daily Living (ADLs). These activities include bathing, dressing, eating, mobility, and using the toilet. Custodial care maintains a person’s current function rather than improving it and can be safely provided by non-licensed caregivers or nurses’ aides. This is the type of assistance most people seek in a traditional “nursing home” stay, and Medicare explicitly excludes it from coverage.
Medicare Coverage for Skilled Nursing Facility Stays
Medicare Part A provides limited benefits for a stay in a Skilled Nursing Facility (SNF) when specific conditions are met. To qualify for SNF coverage, the patient must have had a preceding inpatient hospital stay of at least three consecutive days, known as the “three-day rule”. This hospital stay must be an official inpatient admission, as time spent under “observation status” does not count toward the three-day requirement. Furthermore, the patient must be admitted to the Medicare-certified SNF within 30 days of discharge, and the care must be for the same condition treated during the hospital stay.
If all eligibility criteria are satisfied, Medicare covers up to 100 days of skilled care per benefit period. A benefit period begins when a person is admitted to a hospital or SNF and ends when they have been out of both for 60 days in a row. The first 20 days of the SNF stay are typically covered entirely by Medicare, meaning the patient owes a zero co-payment.
However, the patient becomes responsible for a daily co-insurance payment for the subsequent days, covering days 21 through 100. This co-insurance amount changes annually (e.g., $209.50 in 2025). Coverage can terminate before the 100-day limit if the patient no longer requires daily skilled services, as the benefit is based on medical necessity and not simply the passage of time.
What Medicare Does Not Cover
The primary exclusion from Medicare coverage is long-term custodial care. Medicare does not pay for extended stays that are only required because an individual needs routine help with Activities of Daily Living (ADLs), such as bathing, dressing, or feeding. This exclusion remains true even if the patient is residing in a Skilled Nursing Facility, as coverage ceases once the need for daily skilled nursing or rehabilitation services ends.
In addition to long-term residency, Medicare generally does not cover the costs associated with assisted living facilities. Similarly, the program does not cover the expense of home health aides if the only services provided are non-medical, personal care tasks. This creates a significant financial gap for individuals who require ongoing support but do not have a continuing medical need for skilled professionals.
Alternative Funding Sources for Long-Term Care
Patients and families must rely on alternative funding sources to cover the substantial costs of long-term custodial care. Medicaid is the largest public payer for long-term care in the United States, including indefinite nursing home stays for eligible individuals. Unlike Medicare, which is an entitlement program for those over 65, Medicaid is a joint federal and state program that is means-tested. To qualify for Medicaid’s long-term care benefits, applicants must meet strict financial criteria, including limits on their income and countable assets, which often requires a process of “spending down” personal savings.
Beyond government programs, individuals can use private funding options. Many self-pay using personal savings, pensions, investment income, or proceeds from selling a home, a strategy that can quickly deplete substantial assets. Long-Term Care Insurance (LTCi) is another private option designed to cover custodial services, though policies must generally be purchased many years in advance. Other financing tools, such as home equity conversion through a reverse mortgage or specific annuities, can also provide an income stream to help cover the high expense of care.