Does Medicare pay for assisted living or nursing home care?

The distinction that decides everything

Medicare divides care into skilled and custodial, and that single distinction decides whether it pays anything at all.

Skilled care is nursing or therapy that, in Medicare's own words, can only be safely and effectively performed by or under the supervision of licensed professionals — intravenous medication, wound care, physical therapy after a fracture. Custodial care is help with bathing, dressing, eating, getting to the toilet, medication reminders and supervision.

Medicare pays for skilled care, short-term, under conditions listed below. It pays nothing toward custodial care, however much of it someone needs and however long they paid into the system. Assisted living is custodial care. That is the whole reason Medicare does not cover it.

It is not the building that decides this — it is the stay. The same nursing home room can be covered one month and not the next. A qualifying short-term rehabilitation stay in a Medicare-certified facility is covered. If that same resident stays on in that same bed because they can no longer live alone, the stay has become long-term custodial care and Medicare pays none of it. Families who were told "Medicare is covering mom’s nursing home" are almost always describing the first situation and planning for the second.

The five conditions, all of which must hold

Medicare requires every one of these for a skilled nursing stay to be covered. One missing condition is enough to make the whole stay private-pay:

• A qualifying inpatient hospital stay — at least 3 days in a row, counting from the day of inpatient admission and not counting the day of discharge
• Admission to the facility generally within 30 days of leaving the hospital
• A doctor’s decision that daily skilled care is needed
• The care given in a Medicare-certified skilled nursing facility
• Skilled services for a condition treated during that hospital stay, or one that arose while being treated for it

The trap inside the first condition. Hours spent under observation or in the emergency room do not count toward the three days, even if your parent was in a hospital bed overnight. A family can spend four days in a hospital and have zero qualifying days. Ask, out loud, on the first day: has my parent been admitted as an inpatient, or are they under observation? Then ask again, because the status can be changed.

Two exceptions exist. A doctor in an Accountable Care Organization with a Skilled Nursing Facility 3-Day Rule Waiver may not need the three days, and Medicare Advantage plans may waive it too. Ask the hospital and ask the plan — neither will volunteer it.

What a covered skilled nursing stay costs in 2026

These are the costs of a qualifying skilled stay only. Nothing below applies to long-term custodial care, assisted living or memory care, where the Medicare share is zero. On a covered stay, Part A pays on this schedule:

• Days 1–20: $0 each day, after the Part A deductible of $1,736 per benefit period
• Days 21–100: $217 each day
• Day 101 and beyond: you pay all costs

You do not pay the Part A deductible twice. If it was already paid during the hospital stay in the same benefit period, it is not charged again for the skilled nursing stay.

Run the arithmetic before you rely on the 100 days. A full run of days 21 to 100 is $17,360 out of pocket, and coverage stops entirely at day 101.

If your parent has a Medicare Advantage plan rather than Original Medicare, the rules differ — some plans charge copayments during the first 20 days. Ask the plan directly, in writing.

Coverage can end early — but not for the reason you will be told

Coverage can stop before day 100. Families are often told it is ending because their parent has stopped improving. That is not the standard.

Under the Jimmo v. Sebelius settlement, CMS confirmed there is no “Improvement Standard”. Coverage does not turn on whether someone has potential to get better. It turns on whether they need skilled care. Skilled nursing and skilled therapy are covered where those services are needed to maintain the person’s current condition, or to prevent or slow further deterioration, safely and effectively — even when no improvement is expected at all.

Coverage does properly end when the requirements for skilled care are no longer met — for example, when the care a resident needs can be delivered safely and effectively by non-skilled staff, or when the 100 covered days in the benefit period run out. That is a different test, and it is the correct one.

So the practical move is two sentences long. Ask the discharge planner on day one what length of covered stay is expected, and ask to be told in writing the moment that assessment changes. If the reason given is that your parent is no longer improving, say the word Jimmo, ask for the decision in writing, and ask how to appeal. A written notice is what gives you weeks instead of days.

So who does pay for assisted living?

Three realistic sources. Private funds, including savings, pension income and the proceeds of a house. A long-term care insurance policy, if one was bought years ago. Or Illinois Medicaid, through the Supportive Living Program, which does pay for care in approved settings.

For what private payment actually costs in this state, see What assisted living actually costs in Evanston and Illinois.

Sources

• Medicare.gov — Medicare costs
• Medicare.gov — Skilled nursing facility (SNF) care
• CMS — Jimmo v. Sebelius Settlement Agreement Fact Sheet

Every figure on this page was read from the source listed above on 18 October 2026. Figures change; the review date tells you how fresh this page is.

Related guides

• What assisted living actually costs in Evanston and Illinois
• Illinois Supportive Living Program, explained
• How to check an Illinois care community's inspection record