Medicaid vs. Medicare for Long-Term Care

Many families assume Medicare will pay for a parent’s nursing home. It usually will not, except for a short rehab stay. Medicare is health insurance for people 65 and older and some younger people with disabilities. Medicaid is the program that pays for long-term care when savings run low. This guide explains the difference, what each pays for and how they work together.

Figures change periodically. Double-check current amounts before relying on them.

The short answer

What Medicare pays for in a nursing home

Medicare Part A covers care in a skilled nursing facility (SNF) only when strict conditions are met:

• the person had a qualifying inpatient hospital stay of at least three days (time “under observation” does not count as inpatient);
• they need daily skilled care, such as rehabilitation therapy or skilled nursing, for a condition treated in the hospital;
• they enter the SNF generally within 30 days of leaving the hospital.

When those conditions are met, Medicare pays for up to 100 days in each benefit period. In 2026, the person pays:

• $0 for days 1 through 20;
• $217 a day for days 21 through 100;
• all costs after day 100.

And coverage often ends well before day 100. Once the person stops improving or no longer needs daily skilled care, Medicare stops paying, even if they still need help with daily living.

What Medicare does not pay for

Medicare does not pay for custodial care: help with bathing, dressing, eating, using the toilet and moving around, when that is the main care someone needs. This is exactly the kind of care most nursing home residents and people with dementia need for years. Medicare also does not pay for assisted living or long-term home care aides.

What Long-Term Care Medicaid pays for

Medicaid pays for custodial care in a nursing home for as long as the person needs it and remains eligible. It can also pay for home and community-based services, such as personal care aides and adult day programs, in every state through waivers or other programs. See The three kinds of Long-Term Care Medicaid.

The trade-off is that Medicaid has strict financial rules. Countable assets are often limited to $2,000 for a single person in 2026, income must meet state rules, and gifts in the past five years are reviewed. See the Eligibility overview.

How they work together

Many people have both programs. They are called dual eligibles. In a nursing home:

1. Medicare pays first for a qualifying skilled stay, for up to 100 days.
2. When Medicare coverage ends, Medicaid pays for ongoing custodial care, if the person qualifies.
3. During days 21 to 100, Medicaid may pay the daily Medicare coinsurance for a person who already has Medicaid.

Medicaid also commonly pays the Medicare Part B premium ($202.90 a month standard in 2026) and other Medicare cost-sharing for people who qualify. See Dual eligibility.

A typical timeline

Week 1. Joe, 82, falls and breaks his hip. He is admitted to the hospital as an inpatient for four days.

Weeks 2 to 4. He moves to a skilled nursing facility for physical therapy. Medicare pays in full for the first 20 days.

Weeks 4 to 7. Joe still needs therapy. He pays $217 a day, or his Medigap policy pays it.

Week 7. Joe’s therapy stops because he has reached a plateau. Medicare coverage ends. He cannot go home safely because of dementia and needs long-term care.

After week 7. Joe pays privately at the nursing home’s daily rate. His family applies for Long-Term Care Medicaid. Once approved, Medicaid pays the nursing home, and Joe contributes most of his income.

Families who start planning in week 2, rather than in week 7, often have more choices. A Certified Medicaid Planner (CMP) can begin the work while Medicare is still paying.

Common misunderstandings

“Medicare pays for 100 days.” It pays for up to 100 days, only while the person needs and benefits from daily skilled care, and with a large daily coinsurance from day 21.

“My Medicare Advantage plan covers nursing homes.” Medicare Advantage plans must cover what Original Medicare covers, so they cover short skilled stays. They may waive the three-day hospital rule, but they do not pay for long-term custodial care.

“Observation counts as a hospital stay.” It does not. A person “under observation” is an outpatient, even if they stayed overnight. Ask the hospital about inpatient status.

“Medicaid is only for poor people.” Many people qualify after their savings are spent on care. Married couples can keep much more than single applicants, and some assets, such as the home in many cases, do not count.

“Long-term care insurance and Medicare are the same.” Long-term care insurance is a private policy that pays for custodial care. Medicare does not.

Questions to ask at the hospital or rehab facility

• Is the patient an inpatient or under observation?
• Does the patient qualify for a Medicare-covered SNF stay?
• What is the plan when Medicare coverage ends?
• Does the facility accept Medicaid, and will the patient be able to stay once Medicaid pays?
• Who at the facility helps families with Medicaid applications?

Home care: Medicare vs. Medicaid

Medicare covers home health care when a person is homebound and needs part-time skilled nursing or therapy. It can include some aide visits tied to that skilled care. It does not cover around-the-clock care or ongoing personal care alone.

Long-Term Care Medicaid can cover personal care at home, often for a set number of hours a week, through waiver programs or a state plan benefit. Programs often have waiting lists or limits.

Hospice

Medicare covers hospice care for people with a terminal prognosis. Hospice pays for care related to the terminal illness, but not the nursing home’s room and board. For a nursing home resident on hospice who also has Medicaid, Medicaid generally covers the room and board.

What this means for planning

Because Medicare will not pay for long-term custodial care, the realistic choices for most families are:

1. paying privately from savings and income;
2. long-term care insurance, if the person bought it in time;
3. veterans’ benefits, for those who qualify;
4. Long-Term Care Medicaid, once the person qualifies.

Planning around Medicaid, early and within the rules, can protect money for a spouse at home and reduce the amount spent before eligibility. A Certified Medicaid Planner (CMP) can explain the options.

Medigap and Medicare Advantage during a rehab stay

A Medicare Supplement (Medigap) policy can pay some or all of the $217 daily coinsurance for days 21 to 100, depending on the plan. It does not extend coverage beyond 100 days or pay for custodial care.

A Medicare Advantage plan sets its own cost-sharing for SNF stays, often a daily copay for some days, and may require approval before admission. Families should ask the plan for its SNF rules in writing.

Appealing an early Medicare cut-off

When a skilled nursing facility decides that Medicare coverage should end, it must give the patient a written notice. The patient can ask for a fast appeal by following the instructions on the notice, no later than noon of the day before the end date on the notice. The facility must give the notice at least two days before coverage ends. Appeals do sometimes succeed, especially when therapy is still helping or skilled nursing is still needed. It is worth asking the doctor whether the care is still skilled.

A checklist for families

• Keep copies of every Medicare notice.
• Track the number of covered days used.
• Start gathering Medicaid documents (bank statements, deeds, insurance policies) during the Medicare stay.
• Ask the facility’s business office how they handle the move from Medicare to Medicaid.
• Ask whether the facility will keep the resident in the same room or bed when Medicaid begins paying.
• Write down the date Medicare coverage ends. A Medicaid application filed promptly can often cover months of private-pay bills, because Medicaid can cover care in the months before the application month if the person was eligible then: up to 3 months for applications filed through December 31, 2026, and up to 2 months for applications from January 1, 2027.

Related guides

• What is Long-Term Care Medicaid?
• Dual eligibility
• Eligibility overview
• How to apply

Last updated for 2026. General information only, not legal or financial advice. Medicaid Answers is a free educational resource published by Medicaid Answers Foundation.