In 2023, nursing home costs will likely run you upward of $100,000 per year, a bill that few Americans can afford out-of-pocket. Luckily, many government programs can help offset these costs.
Along with resources such as VA benefits and personal savings, Medicare and Medicaid can help cover nursing home-related costs. Used in tandem, these programs can often cover a majority of your anticipated costs.
FYI: The cost of nursing homes continues to increase rapidly. Fortunately, there are ways to help pay for some of the costs. To learn more, read our guide to nursing home costs.
Medicare Coverage of Nursing Homes
Unfortunately, Original Medicare doesn’t cover the cost of a long-term stay at a nursing home, but certain parts of Medicare can pay for “medically necessary” or essential services at nursing homes. Some of these services include meal preparation, prescription drugs, durable medical equipment, counseling, and other services. Overall, Original Medicare covers short-term visits but not long-term stays.
Medicare Part A
Although Original Medicare doesn’t generally pick up the cost of nursing homes, Part A might be able to help offset some costs. Medicare Part A (Hospital Insurance) typically covers skilled nursing facility care or nursing home care — with the exception that it’s neither custodial nor long-term.
You may be able to receive coverage through Medicare Part A if a physician deems it is “medically necessary” for you to have skilled nursing care. According to Medicare, Medicare Part A can cover inpatient hospital stays, a skilled nursing facility, hospice care, and some home health care services. For example, Medicare Part A can cover wound care or medication management in an inpatient hospital care setting. Some of the most common services that can be covered by Medicare Part A include prescription medications, changing sterile dressings, or nutrition-related services and meals.
Medicare Part B
Although Medicare Part B can’t cover the full cost of nursing homes, it can help cover chiropractic care, in addition to oxygen tanks and other durable medical equipment.
Part B, or Medical Insurance, covers most diagnostic and treatment services and outpatient hospital services such as an emergency room stay or X-rays. Medicare Part B will cover 80 percent of the cost of medically necessary services, while you’d be responsible for the remaining out-of-pocket 20 percent.
Although Medicare Advantage covers nursing homes in the same way as Original Medicare, it can provide extra coverage for other services related to vision, hearing, or dental. It can also cover fitness programs for seniors. Depending on your Medicare Advantage plan, you may even receive coverage for services such as doctor visits, over-the-counter drugs, and transportation. I’d recommend reaching out to your particular Medicare Advantage plan to see if nursing home care can be covered.
Medicare Part D
Medicare Part D, or Prescription Drug Coverage, can help cover the cost of prescription medications that you need while at a nursing home. Although it can’t cover nursing home costs, it can cover some medically necessary services. In order to enroll in Medicare Part D, you’ll need Medicare Part A or B.
FYI: Want to save on prescription drug costs? Read my review of GoodRx, a prescription discount service that helps you save on your monthly prescription costs.
Some Medicare Advantage and Medigap plans work by covering gaps in Original Medicare. Skilled nursing care might be covered under Medigap. Check with your Medigap plan to see what’s covered. Typically, your Medigap might be able to cover the cost of a skilled nursing facility if you need it for longer than 100 days.
Medicaid can potentially pay for a nursing home and cover certain services pending financial eligibility and whether the service is deemed medically necessary. Unlike Medicare, Medicaid can pay for long-term stays at a nursing home facility and provide room and board for older adults. Depending on the state you’re living in, Medicaid may pay the full cost of a nursing home, including any additional services required.
However, one of their requirements is that a resident would need to provide a majority of their current income to Medicaid to be eligible for long-term care coverage at a nursing home or for health care services.
For instance, if you were to make $3,000 per month, you’d most likely have to give up $2,870 for Medicaid to continue paying the cost of a nursing home. Medicaid does help you keep a small sum of money reserved for your own personal allowance to cover other expenses. However, most of it is for covering the cost of your nursing home room and board via Medicaid.
How Much Will Medicaid Pay for Nursing Home Care?
For qualifying individuals, Medicaid picks up most of the tab for nursing home care, paying an average of 45 percent to 65 percent. However, coverage is largely dependent on a variety of factors such as financial status, the state you reside in, and the level of care needed.
Medicaid coverage amounts may vary from state to state, depending on the demand for nursing home care coverage. For example, the average cost of nursing home care in the state of California is on the higher end at $304 a day, compared to Texas at $165. This greatly impacts the coverage and benefits you can receive from Medicaid to offset the costs of nursing home care.
Medicaid Eligibility for Nursing Home Care
Medicaid coverage, like many other financial assistance programs, is dependent on a variety of factors such as age, financial status, assets, and level of care. If you need assistance for long-term nursing home care, you should check to see if you meet the Medicaid eligibility requirements in the state that you’re currently residing in. Typically, one of the requirements of eligibility is that a majority of your income needs to be used to pay for the cost of your nursing home.
To qualify for Medicaid, you’ll need to meet certain income eligibility requirements. Depending on the state you reside in, financial eligibility requirements might be slightly different. For instance, in the state of California, the household income can’t exceed more than 138 percent of the federal poverty level, or an annual income limit of $16,395. Additionally, your assets or savings may be incorporated into determining eligibility for Medicaid as well.
Level of Care Eligibility
Medicaid eligibility differs on a state-by-state basis, depending on the level of care that is medically necessary and needed. In order to qualify for Medicaid, individuals must be able to prove that they require a level of care that meets certain criteria or requires a level of personal care assistance.
The definition of level of care varies from state to state, but in general, it refers to assistance to those who lack cognitive function, the inability to engage in activities of daily living, and mental and behavioral health issues. These factors are just some tools that are used to assess the level of care at nursing homes for older adults, according to the American Council on Aging. Keep in mind that the level of care varies depending on the state you’re in, so the criteria that might make one eligible in one state, may not apply to the other.
Qualifying When You’re Over Medicaid Financial Limits
If you end up going over the Medicaid limit or are no longer considered eligible for low-income assistance, there are exceptions to qualifying, such as HCBS Medicaid waivers or programs such as the Medically Needy Pathway. The latter, in particular, helps expand Medicaid eligibility to individuals who are over the Medicaid income limit, but who have increased medical expenses that they need help paying for.
Do All Nursing Homes Accept Medicaid?
A majority of nursing homes accept Medicaid; however, this is also largely dependent on the state you reside in. To avoid complications with payment and coverage, I’d recommend checking with your nursing home facility to see if they are a Medicaid-certified nursing facility. If it is, then you should be eligible for coverage under the Medicaid skilled nursing facility.
In the event that you find out the nursing home is not Medicaid-certified, you would have to transfer to a nursing facility that’s covered by Medicaid.
How to Apply for Medicaid Nursing Home Care
If you need assistance with nursing home care, I’d recommend applying for Medicaid. First, check to see if you’re eligible for Medicaid. In general, Medicaid is open to all ages and is based on income and family size. You may also need to show proof of citizenship.
Then, I’d recommend visiting your respective state’s government website and apply through the Health Insurance Marketplace or with your state Medicaid agency. When applying for a specific Medicaid policy, it’s important to ensure that coverage is for Medicaid-certified nursing homes. While navigating the application process for Medicaid can be tedious or confusing at times, know that there are many resources out there to help you.
For resources on how to apply for Medicaid or receive coverage for services related to nursing homes, I’d recommend visiting Medicaid.gov. For additional resources about Medicaid and Medicare, read the following articles:
You can search for nursing homes that accept Medicaid through a search tool created by the American Council on Aging.
As the Medicare expert for Medigap.com, Lindsay Malzone has ample experience helping seniors understand the ins and outs of their Medicare coverage and navigating the complex world of supplemental insurance. She has written for a variety of web publications based on her Medicare expertise. Ultimately, her passion lies in helping people find the right healthcare for their needs.