When families begin exploring senior care options, a common assumption is that Medicare will help cover the costs. After all, Medicare is the health insurance program most Americans 65 and older rely on for medical expenses. This assumption is so widespread that it often comes as a difficult surprise when families discover Medicare provides little to no coverage for the ongoing care most seniors actually need. Understanding what Medicare does and doesn’t cover is essential for realistic financial planning and avoiding unexpected financial strain during an already stressful transition.

Why people assume Medicare covers senior living costs

The confusion is understandable. Medicare is associated with senior health care, and most older Americans depend on it for doctor visits, hospital stays, and prescription medications. When a parent or spouse can no longer live independently and needs help with daily activities, it feels like a health-related need that Medicare should address.

Adding to this confusion is that Medicare does cover certain types of care that sound similar to what assisted living or nursing homes provide. Terms like “skilled nursing facility” and “home health care” appear in Medicare materials, leading many to believe Medicare covers nursing homes or in-home assistance broadly. The reality is far more limited, and the distinction comes down to the difference between medical care and personal care.

Medicare covers medical care, not personal care

The fundamental principle to understand is this: Medicare is designed to cover medical care, which encompasses services aimed at diagnosing, treating, or managing illnesses and injuries. This includes doctor visits, hospital care, surgery, rehabilitation therapies intended to help someone recover function after an illness or injury, and skilled nursing services that require medical expertise.

What Medicare generally does not cover is personal care or custodial care. Personal or custodial care refers to assistance with activities of daily living such as:

• Bathing.
• Dressing.
• Grooming.
• Eating.
• Toileting.
• Moving around safely. 

This type of care also includes supervision for safety, medication reminders (but not skilled medication management), meal preparation, and housekeeping. These services help someone maintain quality of life and safety when they can no longer fully care for themselves, but they aren’t medical treatment.

This distinction is critical because most senior care settings provide primarily personal care, not medical care:

• Independent living communities offer housing and amenities for seniors who are largely independent but want a social environment and freedom from home maintenance. 
• Assisted living provides residential care with help for daily activities like bathing, dressing, and medication reminders. 
• Memory care offers specialized support for those with dementia, including supervision, structured activities, and assistance with daily tasks. 
• Even nursing homes, once any short-term medical rehabilitation ends, primarily provide custodial care for residents who need ongoing help with daily living but not active medical treatment.

Since these services are predominantly custodial rather than medical, Medicare typically doesn’t cover them.

Care costs that Medicare does cover

While Medicare doesn’t cover long-term senior living costs, it does provide coverage in specific, limited circumstances where medical care or rehabilitation is the focus.

Short-term skilled nursing after qualifying hospitalization

Medicare covers stays in skilled nursing facilities, but only under strict conditions. The person must:

• Have been hospitalized as an inpatient for at least three consecutive days.
• Be admitted to a Medicare-certified skilled nursing facility within 30 days of leaving the hospital.
• Need daily skilled nursing care or rehabilitation therapy related to the condition that required hospitalization.

The emphasis here is on skilled care, meaning services that require the expertise of nurses or therapists to help the person recover. Examples include wound care, intravenous medications, physical therapy after a hip replacement, or speech therapy following a stroke. Medicare coverage of stays in skilled nursing facilities works as follows:

• Days 1 to 20 are fully covered. 
• For days 21 through 100, the individual pays a daily coinsurance. 
• After 100 days, all coverage ends.

This benefit is designed for recovery and rehabilitation, not for long-term stays. Once someone no longer needs skilled nursing or therapy and requires only custodial care, Medicare coverage stops, even if they remain in the nursing home.

Home health care, when prescribed by a doctor as medically necessary

Medicare covers part-time or intermittent skilled home health services when a doctor certifies they are medically necessary. Covered services include skilled nursing care, such as wound care and monitoring of serious medical conditions, as well as physical, occupational, and speech therapy.

However, this coverage is limited to skilled services. If someone needs only help with bathing, dressing, meal preparation, or companionship, without any skilled nursing or therapy component, Medicare won’t cover it. Additionally, the care must be part-time or intermittent, not the round-the-clock assistance many seniors need.

Hospice care

Medicare covers hospice services for individuals with terminal illnesses who are certified by a doctor to have six months or less to live if the disease follows its normal course. Hospice focuses on comfort care rather than curative treatment and can be provided in various settings, including the person’s home, a hospice facility, a hospital, or a nursing home.

Medicare-covered hospice services include nursing care, medical equipment and supplies, medications for symptom control, hospice aide and homemaker services, counseling, and respite care to give family caregivers temporary relief. This is one area where Medicare does provide more comprehensive coverage because the focus remains on medical management of symptoms and end-of-life care.

What Medicare does not cover

Understanding what Medicare doesn’t cover is just as important as knowing what it does.

Custodial care

Medicare does not pay for custodial care, which again means assistance with daily activities, when no skilled medical care is needed. In practical terms, this means Medicare won’t cover:

• The help with bathing, dressing, eating, and supervision that represents the bulk of what’s provided in assisted living communities.
• The specialized dementia care programming and 24-hour monitoring in memory care facilities.
• The housing, meals, activities, and personal care assistance in independent living communities. 
• The ongoing daily care in nursing homes once rehabilitation ends and the resident needs only help with daily living rather than skilled nursing.

For example, if someone in assisted living needs help getting dressed each morning, reminders to take medications, assistance with bathing twice a week, escort to the dining room for meals, or supervision to prevent wandering, those are all custodial services that Medicare doesn’t cover. Similarly, if a nursing home resident who recovered from pneumonia no longer needs skilled nursing but still can’t bathe, dress, or eat independently, the ongoing personal care assistance falls outside Medicare’s coverage.

Monthly rent and services in senior living communities

Medicare does not pay for the room and board costs in any senior living setting. The monthly fees covering rent, utilities, meals, housekeeping, activities, and personal care services that assisted living and memory care communities charge are the resident’s responsibility. Even in nursing homes, if someone is receiving only custodial care (not skilled nursing covered by Medicare), they must pay for their room, board, and care privately or through other programs like Medicaid.

Other options to pay for senior care

Since Medicare won’t cover most senior living costs, families need to explore alternative funding sources:

• Medicaid can cover long-term care, including nursing homes and, through waiver programs available in many states, assisted living or memory care services. However, eligibility requires meeting strict income and asset limits, and the application process can be complex.
• The VA Aid and Attendance benefit provides additional monthly income to qualifying wartime Veterans and surviving spouses who need help with daily activities. This benefit can help offset senior care costs for those who qualify.
• Long-term care insurance is specifically designed to cover custodial care across various settings, including home care, assisted living, memory care, and nursing homes. For those who purchased policies years ago, this coverage can be invaluable.
• Private pay options using personal savings, retirement accounts, Social Security income, pensions, or proceeds from selling a home remain the most common way families initially pay for senior care. Many families use private resources until they’re exhausted, then transition to Medicaid if eligible.
• Life insurance conversions or accelerated death benefits may allow you to convert or access the value of your life insurance policy to help pay for care.

Moving forward with clear expectations

Learning that Medicare won’t cover the care costs you’re facing can be disappointing, especially when the need for help is urgent and the financial implications are significant. However, understanding Medicare’s limitations allows you to focus your energy on exploring the funding options that actually will help.

Most families piece together a combination of payment sources over time, starting with private resources, potentially accessing Veterans benefits or long-term care insurance if available, and eventually transitioning to Medicaid when appropriate. The path forward looks different for every family, depending on individual circumstances, resources, and the level of care needed.

If you’re navigating these decisions and need guidance on senior care options and how to realistically pay for them, you don’t have to figure it all out alone. Your local Oasis Senior Advisor understands the financial realities families face and can help you identify care solutions that work within your situation. Find your local advisor to get personalized support as you explore what’s possible and make informed decisions during this challenging transition.