Many people associate Medicare primarily with hospital stays (Part A) and physician services (Part B), but it also influences decisions about senior living. When I speak with groups considering retirement communities—especially continuing care retirement communities (CCRCs)—I’m frequently asked how Medicare affects those choices. I will address Medicare’s role in choosing a retirement community in a later post, but first it helps to understand several key facts about Medicare coverage.
Importantly, neither Medicare nor Medigap (Medicare supplement) plans cover assisted living if the care needed is strictly custodial. Assisted living—often called custodial or personal care—focuses on non-medical assistance such as help with bathing, dressing, eating, toileting, and other activities of daily living. Whether that assistance is provided at home or in a community setting, Medicare does not pay for custodial care alone.
Medicare Part A can cover medically necessary skilled nursing care for a limited time and under specific conditions. Typical requirements include:
- An inpatient hospital stay of at least three consecutive days with formal admission.
- Admission to a skilled nursing facility (SNF) within 30 days of the qualifying hospital stay.
- A physician’s determination that daily skilled nursing or rehabilitation services are medically necessary.
- Care provided in a Medicare-certified facility. Medically necessary home health services delivered by a Medicare-certified agency may also qualify for coverage.
Other criteria may apply. In many cases, Medicare coverage for skilled nursing follows a significant medical event—such as a stroke, heart attack, major surgery or a serious fall—when rehabilitation is required.
Don’t confuse Medicare with Medicaid
Because their names are similar, Medicare and Medicaid are often confused, but they serve different purposes. Medicaid is a needs-based safety net program for people with limited income and assets. Unlike Medicare, Medicaid can cover some assisted living costs for those who meet eligibility rules. Eligibility and services vary by state, so qualifying for Medicaid may allow coverage of services that Medicare will not pay for.
Medicare reimbursable amounts
For skilled nursing services deemed medically necessary, Medicare pays the full cost—including a semi-private room, meals, therapies and medications—for the first 20 days. From day 21 through day 100, Medicare pays a daily fixed amount; in 2024 that amount is $204 per day. After 100 days, Medicare no longer pays for skilled nursing care.
That daily reimbursement is lower than the national average cost of a semi-private skilled nursing room, which was around $285 per day in 2024, and about $320 per day for a private room. As a result, many people will still face out-of-pocket expenses during days 21–100 to cover the difference. If care extends beyond 100 days, the individual is responsible for the full cost. The 100-day period can reset if at least 60 days pass between qualifying stays and all other conditions are met.
Cost difference in private-pay facilities
Not all skilled nursing facilities accept Medicare. These private-pay providers require residents to cover costs from day one. The following table illustrates the potential cost difference over the first 100 days between a Medicare-certified facility and a private-pay facility based on national average rates.
| Medicare-Certified Facility | Private Pay Facility* | Difference | Total Days | Total Difference b/w Medicare Certified and Private-Pay | |
| Days 1-20 | $0 | $285 | $285 | 20 days | $5,700 |
| Days 21-100 | $204 | $285 | $81 | 80 days | $6,480 |
| Difference: | $12,180 |
*National average daily cost of a semi-private room in a skilled nursing facility (2024).
The table shows that, in 2024, a resident in a private-pay skilled nursing facility could face approximately $12,180 more in out-of-pocket costs over the first 100 days compared with a Medicare-certified facility. Keep in mind that a person’s Medicare supplement policy may cover some or all of the copay for days 21–100, which can reduce out-of-pocket exposure. Also, there is no guarantee that Medicare will authorize or continue coverage for the full 100 days.
This post was originally written in 2018 and updated in 2024.