A step-by-step explanation of when Medicare covers nursing home care and when it doesn’t, including critical requirements you need to know.

This is one of the most important questions families face when a loved one needs nursing home care. The answer is both yes and no, depending on specific circumstances and requirements that must be met. Let’s break down exactly when Medicare will and won’t pay for nursing home care.

Step 1: You Must Have Medicare Coverage

First, you need to have Medicare coverage. If you’re over 65, you’ll probably know this and can see Medicare coverage information:

• On your Social Security statement at the end of each year
• In information about the premiums deducted from your Social Security payments
• Through your Medicare card and documentation

Step 2: Hospital Admission (Critical Requirement)

You need to be admitted into the hospital – that’s our first step.

Admitted vs. Observation Status – A Critical Distinction

You need to be admitted versus going there for observation status. This is extremely important:

• Admitted status = Qualifies for nursing home coverage
• Observation status = Does NOT qualify for nursing home coverage

If you’re admitted for observation status, Medicare, as it stands today, will not pick up the nursing home bill after you leave the hospital. This is a big hot-button issue – you want to make sure that you were being admitted.

Hot Tip #1: Always verify your admission status with hospital staff and insist on admitted status if you’re staying overnight and receiving medical treatment.

Step 3: Qualifying Hospital Stay (Three Days)

After being admitted, you need to have a qualifying stay at the hospital that is for three days.

Key points about the three-day requirement:

• Must be three full days as an admitted patient
• Observation days do not count toward this requirement
• After three days in the hospital, you have a qualifying stay
• This creates eligibility for nursing home coverage

Step 4: Medical Necessity for Rehabilitation

When leaving the hospital, if the discharge planner and the doctors say that you need rehabilitative care in a nursing home, then Medicare will cover nursing home care.

This requires:

• Medical determination that you need skilled nursing or rehabilitation services
• Discharge planning that specifies nursing home level care
• Rehabilitative care – not just custodial care

Medicare Coverage Periods and Costs

Days 1-20: Full Coverage

Medicare will cover the first 20 days of rehab in a nursing home.

• Medicare pays the nursing home directly
• No out-of-pocket costs for the patient
• Covers room, board, and rehabilitation services

Days 21-100: Partial Coverage with Coinsurance

Between day 21 and day 100, depending on your Medicare supplement, you can get that covered and fully covered.

The reality:

• If you don’t have a good supplement, you’re paying around $150 a day from days 21 to 100
• With proper Medicare supplement insurance, this cost can be fully covered
• It’s very important to have the right Medicare supplement

After Day 100: No Medicare Coverage

After day 100, Medicare no longer pays the nursing home.

At this point:

• You are going to be in a private pay situation
• You’ll need to be looking for Medicaid coverage
• Costs can range from $7,500 to $10,000+ per month

The “Improvement Standard” Requirement

One of the key requirements for all these day length benefits is that you are doing the rehab – you’re not plateauing.

Important points about improvement:

• “Plateauing” is a key term you will hear
• You must be showing improvement to continue coverage
• There are some issues in recent case law about this improvement standard
• If your insurance claims you’re not improving, you may be able to fight this determination

Summary of Medicare Nursing Home Requirements

What to Do When Medicare Coverage Ends

If you find yourself in either situation:

• Day 21 and paying $150 a day without good supplement coverage
• After 100 days with no Medicare coverage

You need to contact an elder law attorney to help with qualifying for Medicaid and protecting assets from having to spend it completely down on nursing care.

Why Professional Help Is Important

• Medicaid qualification rules are complex
• Asset protection strategies exist
• Planning can help preserve resources for spouses
• Proper planning prevents unnecessary spend-down

Key Takeaways

Medicare does pay for nursing homes, but only:

• For short-term rehabilitation (not long-term custodial care)
• After meeting all qualification requirements
• For a maximum of 100 days per benefit period
• With significant out-of-pocket costs after day 20 without good supplement coverage

Most people who need long-term nursing home care will eventually need to transition to Medicaid coverage. Understanding these requirements early and planning accordingly can help protect your family’s financial security.

For more information about the difference between Medicare and Medicaid, and for help with Medicaid planning and asset protection, consult with an experienced elder law attorney.

For personalized guidance about Medicare nursing home coverage and Medicaid planning, consult with a qualified elder law attorney who understands the complex requirements of both programs.