Medicare vs Medicaid for Nursing Home Care: What Each Covers

The Core Distinction

Medicare and Medicaid both pay for nursing home care, but they cover completely different things for completely different durations. Confusing the two is one of the most expensive mistakes families make when an aging parent enters a facility.

Medicare covers short-term skilled nursing and rehabilitation after a qualifying hospital stay. It pays for up to 100 days per benefit period — and only while the patient needs daily skilled nursing or therapy to improve, maintain, or prevent or delay worsening of a condition. Coverage ends when Medicare's skilled-care criteria are no longer met.

Medicaid covers long-term custodial care — the ongoing daily assistance with bathing, dressing, eating, and mobility that a person with chronic conditions needs indefinitely. Medicaid has no time limit, but it requires meeting strict financial eligibility standards.

Most families discover this distinction the hard way: their parent is discharged from a hospital to a nursing home for rehab, Medicare pays for the first few weeks, and then a letter arrives saying coverage is ending. The nursing home bill does not stop — it just shifts to the family.

What Medicare Covers (and for How Long)

Medicare Part A covers a skilled nursing facility stay under these conditions:

1. Qualifying hospital stay. The patient must have been admitted as an inpatient (not under observation status) for at least three consecutive days.
2. Skilled care need. The patient must need daily skilled nursing or therapy services — physical therapy, occupational therapy, speech therapy, or skilled nursing like IV medications or wound care.
3. Transfer within 30 days. The patient must enter the skilled nursing facility within 30 days of the qualifying hospital discharge.

When these conditions are met, Medicare pays:

• Days 1–20: Medicare covers the full cost. The patient pays nothing.
• Days 21–100: Medicare covers most of the cost, but the patient pays a daily coinsurance of $217.00 (2026 rate). Over 80 days, that adds up to $17,360. Many families have a Medicare Supplement (Medigap) policy that covers this coinsurance.
• After day 100: Medicare pays nothing. Not a reduced rate — zero.

The critical detail: Medicare does not guarantee 100 days of coverage. It may cover skilled nursing or therapy needed to improve, maintain, or prevent or delay worsening of the condition, but coverage ends when the patient no longer meets Medicare's skilled-care criteria. The transition from "Medicare is paying" to "you owe $400 to $800 per day" can happen with little warning.

What Medicaid Covers

Medicaid pays for long-term custodial care in a nursing home — the kind of around-the-clock assistance that people with advanced dementia, severe mobility limitations, or chronic medical conditions need for months or years.

In New York, Institutional Medicaid (also called Chronic Care Medicaid) covers nursing home care for eligible individuals. The 2026 financial eligibility limits for a single applicant are:

• Monthly income limit: All income above the $50 personal needs allowance goes to the nursing home as NAMI (Net Available Monthly Income)
• Countable asset limit: $33,038
• Home equity treatment: Up to $1,130,000 may be exempt when no exempt spouse or dependent child resides in the home; there is no equity limit when a spouse or dependent child resides in the home

Medicaid also enforces a strict 60-month lookback period. If the applicant transferred assets for less than fair market value during the five years before applying, a penalty period is calculated by dividing the transferred amount by the regional penalty divisor. In New York City, the 2026 divisor is $15,282 per month — so a $150,000 gift to a child would trigger approximately 10 months during which Medicaid will not pay for nursing home care.

The Gap Between Medicare and Medicaid

The dangerous period is between Medicare coverage ending and Medicaid eligibility beginning. During this gap, the family pays the nursing home's private-pay rate — which in New York ranges from roughly $12,000 to $25,000 per month depending on the region and facility.

For families with significant assets, this gap can last months or even years while they spend down to Medicaid's asset limit. For families who started planning early — using strategies like spousal refusal or exempt asset transfers — the gap can be narrowed considerably.

If your parent is in a nursing home and Medicare coverage is about to end, these are the immediate steps:

1. File the Medicaid application now. Do not wait until Medicare runs out. In New York, you submit Form DOH-4220 (Access NY Health Care Application) and Supplement A (DOH-5178A) to your county's Local Department of Social Services. Medicaid can be retroactive up to three months before the application date.
2. Request a Medicare coverage determination in writing. If you believe your parent still needs skilled care, you can appeal Medicare's decision to stop coverage. The appeal process includes an expedited review that can extend coverage while the appeal is pending.
3. Verify the nursing home accepts Medicaid. Not all nursing homes in New York participate in Medicaid, and some that do have limited Medicaid beds. A facility cannot discharge a resident solely because they transition from private pay to Medicaid — but confirming Medicaid participation before admission avoids complications.

Planning Ahead

The most important thing families can do is understand which program applies before a hospital stay happens. Medicare is temporary rehabilitation coverage. Medicaid is the long-term safety net — but qualifying requires meeting financial thresholds that take planning to navigate.

Our New York Care Decision Guide walks through the full Medicaid application process, the 2026 eligibility limits for all seven New York pricing regions, the lookback rules and exempt transfers, and the emergency pathways (Presumptive Eligibility and Immediate Need Fast Track) that apply when a hospital discharge creates an urgent need for coverage.

See more New York guides →