What is a Nursing Home? Nursing homes are health-care facilities that usually provide long-term room and board for seniors or others who are not capable of taking care of themselves. Most nursing homes are regulated by the federal government and have to adhere to certain standards. For instance, nursing homes are required by law to have a registered nurse (RN) on duty 8 hours a day, 7 days a week. In addition, they are required to have either an RN or a licensed vocational nurse (LVN) on duty 24 hours a day. They are inspected regularly to ensure that health and safety standards are being met.

What Medicare Covers. Medicare does not pay for seniors to stay indefinitely in nursing homes. For Medicare to pay anything, a senior must be in a hospital for at least 3 days and then be transferred to a skilled nursing facility for continuing health care for the same problem. Medicare pays all costs for the skilled nursing facility up to 20 days. For days 21 through 100, you pay $133.50 each day. For anything over 100 days, you pay 100% of the cost of the skilled nursing facility. Though costs vary by location, the average cost per day of a nursing home in the U.S. is about $210!

Medicaid. Clearly, cost can become a huge burden. Some seniors use savings accounts, life insurance policies, and reverse mortgages to finance nursing home costs. Sometimes, as a last resort, once these assets are exhausted, seniors can apply for Medicaid from their state. (Unlike Medicare, Medicaid is state-administered.) You must be 65 years old, and your assets and income has to be limited; cut-off amounts vary from state to state.