Long Term Care: How Much Does Medicare Actually Cover?

Although Medicare is usually thought of as coverage for hospital stays (Part A) and doctor visits (part B), it also has an application to senior living. When I speak to groups of people who are considering moving to a retirement community—specifically continuing care retirement communities (CCRCs)—I’m often asked how Medicare plays into the decision. I’ll address this in another post next week, but first, it’s important to understand a few important details about Medicare.

Neither Medicare nor Medicare supplement plans provide coverage for assisted living—if that is the ONLY type of care needed. Assisted living, sometimes referred to as custodial care or personal care, involves non-medical care, such as assistance with bathing, dressing, eating, toileting, etc. No matter whether such services are received in the home or in a community-based setting, Medicare will not cover the cost of assisted living services.

Medicare Part A will, however, cover medically necessary skilled nursing care—for a limited time and limited amount—if certain requirements are met, including but not limited to:

• The recipient of care must have first had an “admitted” hospital stay of at least three days or longer.
• Admittance into the skilled nursing facility must take place within 30 days of the hospital stay.
• A physician must decide that daily medical nursing care or rehab is necessary.
• Care must be provided in a Medicare-certified facility. (Medically necessary services provided at home by a Medicare-certified home healthcare agency may also qualify for Medicare coverage.)

There may be other requirements in addition to those listed above. Quite often, Medicare’s coverage of skilled nursing care follows a serious medical occurrence, such as a stroke, heart attack, fall, or major surgery with the purpose of rehab.

Don’t confuse Medicare with Medicaid

Given that the names of each program are so similar there is often confusion between what is covered by Medicare and Medicaid. Medicaid is a government safety net program that only applies for those who essentially no longer have the assets and income available to pay for necessary care. Unlike Medicare, Medicaid actually will cover some of the costs of assisted living services for those who qualify.

Medicare reimbursable amounts

The full cost of skilled (medically necessary) nursing care—including the cost of a semi-private room, meals, therapies, medications, and more—will be covered by Medicare for the first 20 days. Between 21 and 100 days, and as long as you are deemed to still need such services, Medicare will pay $204 per day in 2024. (This figure was $167 at the original writing of this post in 2018.) Beyond 100 days Medicare will not cover any of the cost.

The reimbursable amount shown above is less than the national average daily cost of skilled nursing care for a semi-private room, which hovers around $285 for a semi-private room in 2024 according to Genworth Financial. The daily rate is even higher for a private room, hovering around $320 in 2024. Therefore, many people will still end up paying for some amount of care out of their pocket during those 80 days.

If care should be required for more than 100 days, then Medicare ceases to provide coverage, and the recipient of services is then required to pay 100 percent of the cost out-of-pocket. The 100-day period can reset if at least 60 days pass between occurrences and if the other stipulations are met.

Cost difference in private pay facilities

Not all skilled nursing facilities are Medicare-certified. Often referred to as “private pay” providers, these facilities do not accept Medicare and, therefore, residents must pay out-of-pocket for services beginning on day one. We created the following chart to show the total potential cost difference over the first 100 days in a Medicare-certified facility versus a private pay facility.

*National average daily cost of semi-private room in a skilled nursing facility. Genworth 2024 Cost of Care Survey

As the chart illustrates, in 2024, the maximum financial exposure a person would face in a private-pay skilled nursing facility compared to a Medicare-certified facility for the first 100 days is just over $12,000. However, it is important to understand that a resident’s Medicare supplement policy may cover some or all of the co-pay during days 21-100, thereby lowering the out-of-pocket cost exposure. Furthermore, there is no guarantee that Medicare will pay for the full 100 days.

This post was was originally written in 2018 and was updated in 2024.