Nursing homes are long-term care facilities that provide 24/7 nursing care to patients. When these facilities also offer physical therapy or rehabilitation then they are called skilled nursing facilities.

Nursing homes serve two primary patient populations: long-term care residents and rehabilitation or therapy residents. Long-term care residents often need direct nursing care available 24 hours a day.

Therapy residents are typically recovering from a medical operation and will work with a physical therapist in a therapy gym to develop skills in order to regain independence. Not all nursing homes provide rehabilitation or physical therapy, but it is becoming more and more common since the reimbursement to providers is higher for residents that need therapy.

What is Included in Nursing Home Care?

Like other types of senior housing, nursing homes provide housing (typically a studio apartment), dining (three meals per day), personal care services (medication management, dressing, grooming, etc.), and social activities.

The primary difference between nursing homes and other types of care is that nursing homes offer 24/7 nursing care, which is a step closer to medical care. For instance, residents in specially licensed nursing homes may be on a ventilator or other residents may be receiving some form of wound care.

How Much Does Nursing Home Care Cost?

The median cost for nursing home care in the United States is $8,517 per month for a private room in 2019 according to Genworth. That compares to a median of $7,513 per month in 2019 for a semi-private room according to Genworth. These figures are for long-term care and do not include therapy or rehabilitation. Rehabilitation care is more expensive, but is often covered by Medicare.

The cost for nursing home care varies greatly from state-to-state and even between communities. Communities with more private pay rooms and in more expensive urban areas tend to be the most expensive. Nursing homes in low-cost, rural areas may be much more affordable.

How Can I Pay for Nursing Home Care?

Of the types of senior living, nursing homes' services are the most likely to be paid for by a government program. In fact, the single largest program to pay for long-term care is Medicaid, which covers all nursing home long-term care costs for qualified seniors. Therapy residents are often covered by Medicare, but for a very limited time frame.

Paying for Long-term Care in a Nursing Home
  • Medicaid (long-term care)
  • Social security, pension, investment, or other income
  • Long-term care insurance
  • Veterans' benefit

Long-term care residents are often covered by Medicaid, but many seniors do not qualify for Medicaid and must pay out-of-pocket for long-term care. Medicaid Waiver programs have two tests to determine if you qualify for Medicaid. These tests are an asset test and an income test.

The asset test requires that those seeking care must have countable assets of less than $2,000. Many people are confused by this, since there is a lot of disinformation available on the subject. Many wrongly believe that the resident must have less than $2,000 of any assets.

Non-countable Assets for Medicaid in a Nursing Home
  • Primary home (with equity limits)
  • One automobile
  • Personal property
  • Certain prepaid funerals
  • Assets exclusively in the name of a spouse
  • Properly structured assets in a trust

*The prospective nursing home resident must express the plan to return to the home.

The income test only requires that the resident's income is less than the cost of the nursing home care. Since nursing home care is very expensive, this is often the case.

Even if you pass Medicaid's asset and income tests and are qualified for long-term care paid for by Medicaid, your estate could be subject to a claw-back process known as estate recovery. This is a process, upon the resident's death, where a department of health in your state of residence and the Center for Medicaid and Medicare Services (federal department) will attempt to get reimbursed for care provided to the senior in the nursing home and paid for through the state's Medicaid waiver program.

Some assets can be protected from the estate recovery process depending on how the resident, or his/her family, owns assets. For instance, assets may be transferred to children in a trust that prevents CMS from recovering the funds. If you're interested in minimizing the impact of estate recovery, then we suggest speaking with a trustworthy elder law attorney.

Paying for Rehabilitation in a Nursing Home

Medicare will pay for up to 100 days of rehabilitation or therapy in a nursing home for qualifying stays. The primary requirements for Medicare to pay for the physical therapy is that the resident must have had a three night qualifying stay (not in observation or triage) in a hospital, must have doctor's orders for therapy, must be covered by Medicare, and cannot have had a recent Medicare paid stay.

If the senior does qualify for Medicare to pay for the nursing home stay, then the full cost of living in the skilled nursing facility and receiving services will be covered by Medicare for the first twenty days. After the first twenty days, a typical copay will be required from the Medicare beneficiary.

How Long Will Medicare Pay for a Nursing Home Stay

Medicare will continue paying for a portion of the nursing home stay up to 100 days.

Most stays in skilled nursing facilities for therapy or rehabilitation are much shorter than 100 days. In fact, most stays are in the 15 to 25-day range. While providers would like to receive the continued revenue from having residents stay longer, Medicare tries to control costs by moving residents into a different care setting as soon as the resident has recovered enough.

Nursing Homes in CCRCs

Nursing homes on continuing care retirement campuses (CCRCs) often have limited access on admissions. As a result of their certificate of need, license, or policies, the CCRC may only offer nursing home care to those residents that already have a contract with the CCRC. This is a common marketing point for CCRCs. However, some CCRCs have the proper license and a policy to accept non-contract seniors that weren't already living in the CCRC.

Do All Nursing Homes Accept Medicaid or Medicare?

Nursing homes are not usually required to accept Medicaid or Medicare, but most accept one or the other. Nursing homes that offer physical therapy or rehabilitation and accept Medicare as a source of payment are known as skilled nursing facilities.

Nursing Homes Versus Assisted Living

Nursing homes and assisted living facilities are similar in many ways, which results in confusion about what separates nursing homes and assisted living communities. For instance, both nursing homes and assisted living communities typically provide personal care services, dining (three meals per day), housing, maintenance, housekeeping, laundry services, and social activities.

The primary difference is that nursing homes provide 24/7 nursing care and typically have residents that need higher levels of care than those in assisted living. For instance, residents with extreme mobility limitations that may require two or three staff to lift for dressing or grooming, would likely be in a nursing home versus in an assisted living community. Also, residents in nursing homes may have more intensive wound care issues or may need a ventilator, which are available in specialized nursing homes.

Also different are who pays for care, how much care costs, and what the environment is like. In most nursing homes, many residents are being paid for through Medicaid and some are receiving physical therapy for which Medicare is footing the bill. In assisted living, most residents pay through private funds such as social security income, long-term care income, pension income, and investment income among others.

Finally, the environment or facility is a common major difference between nursing homes and assisted living. Many assisted living communities are newer with a more home-like environment, nicer finishes, and more amenities.

Nursing Home Design

If you have been in one or two nursing homes, then you've probably got a good sense of how several thousand nursing homes across the United States are designed.

Many nursing homes were built in the mid to late twentieth century under building codes and regulations that required the nursing homes to have an institutional feel. For instance, most nursing homes are one or two stories with long corridors of studio rooms, with a nurse's station at the intersection of the corridors, with vinyl tile flooring, and handrails along the walls. Nursing homes also typically have one or more courtyards, a kitchen and dining room, an activity room or two, and some office space for the staff. If the nursing home offers physical therapy, then a therapy gym is often included as well.

Many newer nursing homes have popped up in areas near major hospitals in the past couple of years. These nursing homes are often focused around rehabilitation or therapy and have features that resemble more of a luxury resort or spa than a traditional nursing home. For instance, many of these communities have private rooms with nice finishes and flat screen TVs. The communities often have a spa or rehabilitation pool and offer better dining than some traditional nursing homes. The problem with many of these communities is that they don't typically take long-term care residents, so paying with Medicaid is usually not an option.

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