Nursing Home Costs

Nursing home costs are the cost of residing in a skilled nursing facility, which provides 24-hour nursing care, help with all activities of daily living, and medical oversight, the most intensive level of long-term care. Because it combines housing, personal care and clinical staffing, it is the most expensive care setting, with national median costs above $100,000 a year. The critical distinction for paying is between short skilled stays, which Medicare may cover, and long-term custodial care, which it does not.

The CareScout 2025 Cost of Care Survey put the national median nursing-home cost at about $315 a day for a semi-private room and $355 a day for a private room, which works out to roughly $115,000 and $130,000 a year. These are medians; costs in high-cost states can run substantially higher. A semi-private room, shared with another resident, is the more common and less expensive option and is what Medicaid typically pays for.

Paying for it turns on a distinction people routinely get wrong. Medicare covers skilled nursing facility care only under narrow conditions: the stay must follow a qualifying inpatient hospital stay, the person must need daily skilled care, and coverage runs up to 100 days per benefit period, with full coverage for the first 20 days and a daily coinsurance charge after that. It is designed for rehabilitation, recovering from a stroke or a hip replacement, not for indefinite custodial care. Once a person no longer needs skilled care but still cannot live independently, Medicare stops, even if the 100 days are not used up.

That leaves long-stay custodial care to other payers. Private pay comes first for those with assets. Long-term care insurance can pay a benefit if the person meets the policy's trigger, typically needing help with at least two activities of daily living or having severe cognitive impairment. For most long-stay residents, though, the eventual payer is Medicaid, which is the largest single payer of nursing-home care in the country. Medicaid requires the person to spend down assets to the state's limit, subject to a five-year look-back on gifts and asset transfers, and the state must seek recovery from the estate of a deceased resident who was 55 or older. The mechanics of qualifying are covered under Medicaid spend-down; the broader cost landscape across all care settings is covered under elder care costs.

Consider a hypothetical resident needing long-term nursing-home care at a national-median semi-private rate of about $315 a day, roughly $9,600 a month or $115,000 a year. Suppose he first spends 25 days in the facility after a qualifying hospital stay: Medicare covers days 1 to 20 in full, then charges a daily coinsurance for days 21 to 25, and because he still needs skilled care during this window, most of the bill is covered.

On day 26 his condition stabilizes; he no longer needs skilled care but cannot go home. Medicare coverage ends. From here he pays about $9,600 a month from savings. If he entered with $250,000, that lasts roughly two years before he reaches his state's Medicaid asset limit, at which point Medicaid becomes the payer for the semi-private room. These figures are illustrative national medians from the CareScout 2025 survey; actual costs, Medicare coinsurance amounts and Medicaid limits vary and should be checked locally.

Pros

• A skilled nursing facility provides the highest level of care, 24-hour nursing and full assistance, for those who need it.
• Medicare can cover a short skilled stay after a hospitalization, reducing the cost of rehabilitation.
• Medicaid provides a safety net that pays for long-stay custodial care once assets are spent down.

Cons

• It is the most expensive care setting, with median costs above $100,000 a year.
• Medicare's coverage is short and conditional, and stops when skilled care is no longer needed, even mid-stay.
• Reaching Medicaid eligibility usually means spending down a lifetime of savings, with a five-year look-back and estate recovery.
• A private room costs more than a semi-private room, which is generally what Medicaid will pay for.