By Nwanneka Uchechukwu, RN. For general education only. Figures are for 2026 and change over time, so confirm current details with Medicare.gov and the Illinois Department of Healthcare and Family Services (HFS).
When a parent or spouse needs nursing home care, one of the first questions families ask is, “Who pays for this?” Many assume Medicare will cover it. Often it does not, at least not for long. The difference between Medicare and Medicaid is one of the most misunderstood parts of long-term care, and the confusion can lead to surprise bills and rushed decisions.
Here is a plain-language guide, with Illinois examples where they matter.
The Short Version
- Medicare is health insurance for people 65 and older (and some younger people with disabilities). It covers short-term skilled care and rehabilitation after a hospital stay. It does not pay for long-term custodial care.
- Medicaid is a joint federal and state program for people with limited income and assets. It can pay for long-term nursing home care once a person qualifies.
In practice, many families start with Medicare for the first weeks after a hospital stay, then pay privately, and later move to Medicaid when savings run low.
What Medicare Covers in a Nursing Home
Medicare Part A can help pay for time in a skilled nursing facility (SNF), but only under specific conditions:
- A qualifying hospital stay. The person must have been admitted as an inpatient for at least three days in a row before moving to the nursing home. Time spent in the hospital under “observation status” does not count as inpatient time, so it is worth asking the hospital which status your loved one has.
- A skilled need. The person needs daily skilled care, such as physical therapy, wound care, IV medications, or skilled nursing observation, ordered by a doctor.
- A Medicare-certified facility. Not every nursing home bed is certified for Medicare.
If these conditions are met, here is how coverage works in 2026 for each benefit period:
- Days 1 to 20: Medicare pays the full approved cost. You pay $0.
- Days 21 to 100: You pay a daily coinsurance of $217 per day in 2026.
- After day 100: Medicare pays nothing for the stay.
These are maximums. Coverage can end sooner if the person no longer needs skilled care, for example once they have recovered as much as they are expected to from rehabilitation and only need help with daily activities.
What this means for families: Medicare is built for recovery after an illness or surgery, such as a hip fracture, stroke, or pneumonia. It is not designed for someone who needs ongoing help with bathing, dressing, eating, or supervision because of dementia or chronic frailty. That kind of help is called custodial care, and original Medicare does not cover it.
Supplemental and Advantage plans
- A Medigap (Medicare Supplement) policy may cover the daily coinsurance for days 21 to 100, depending on the plan.
- Medicare Advantage plans have their own rules. They may require prior authorization, limit which facilities you can use, and set their own daily costs. Call the plan before your loved one is transferred if you can.
If you are unsure what your parent’s plan covers, Illinois offers free, unbiased Medicare counseling through the Senior Health Insurance Program (SHIP), available at 1-800-252-8966.
What Medicaid Covers
Medicaid is the program that pays for most long-term nursing home care in the United States. Each state runs its own program within federal rules, so details differ. In Illinois, it is administered by HFS.
To qualify for nursing home Medicaid, a person generally must meet three requirements:
- A medical need for nursing-home-level care.
- Limited income. Most of a resident’s monthly income goes toward the cost of care, and Medicaid pays the rest.
- Limited countable assets. For a single applicant in Illinois, eligibility guides currently list the limit at about $17,500. Confirm the current figure with HFS before relying on it.
Some things are typically not counted, such as a primary home (up to certain limits), one vehicle, and personal belongings. Rules for married couples are different: the spouse who stays at home is allowed to keep a protected share of the couple’s assets and some income, so that they are not left without money. Because these limits are adjusted every year, ask HFS or an elder law attorney for the current numbers.
To apply in Illinois, families usually use the state’s online benefits portal (ABE) or work with the facility’s business office or social worker, who often help with applications.
The Five-Year Look-Back: A Rule Every Family Should Know
This is the rule that surprises families most.
When someone applies for long-term care Medicaid in Illinois, the state reviews financial transactions during the 60 months (five years) before the application. It checks whether the applicant or their spouse gave away money or property, or sold something for less than it was worth.
If such transfers are found, the person can be ineligible for Medicaid for a period of time, called a penalty period. The state adds up the value of the transfers and divides it by the average monthly cost of care. For example, according to Illinois Legal Aid, transfers totaling $60,000 with a monthly nursing home cost of $6,000 would result in a 10-month penalty.
There are exceptions. Transfers to a spouse are generally allowed, and so are certain transfers of a home to specific people, such as a child who is disabled or a child who provided qualifying care.
The important point: Do not give away money or property, or move assets around, in a panic without getting advice. Well-meant gifts to children can cause real problems later. Talk to an elder law attorney first.
Estate Recovery
After a Medicaid recipient dies, the state may seek repayment for some of the care it paid for from the person’s estate. This can affect a home that was protected while the person was alive. If this concerns your family, ask an elder law attorney how it applies in your situation.
Putting It Together: A Common Path
While every family’s path is different, this is a pattern I see often:
- Hospital stay, followed by a transfer to a nursing home for rehabilitation.
- Medicare covers the first days. Days 21 to 100 may involve a daily copayment, which Medigap may cover.
- Skilled care ends when the person stops improving, even if they still cannot live alone.
- Private payment begins, from savings or long-term care insurance if there is any.
- Medicaid application when assets fall to the allowed level.
Planning ahead can ease these transitions. Ask the nursing home early whether they accept Medicaid and whether they have Medicaid-certified beds, because not every facility does, and a bed may not be available when you need it.
Questions to Ask the Nursing Home and Social Worker
- Is this stay covered by Medicare, and how many days do you expect?
- How will we know when skilled services are ending, and will we get notice?
- Is this bed Medicare- and Medicaid-certified?
- If we run out of private funds, can my loved one stay here on Medicaid?
- Who can help us with the Medicaid application?
Where to Get Free or Low-Cost Help
- Medicare.gov and 1-800-MEDICARE for questions about coverage
- Illinois SHIP (1-800-252-8966) for free Medicare counseling
- Illinois HFS for Medicaid rules and applications
- Your local Long-Term Care Ombudsman if you have concerns about care or billing
- An elder law attorney for planning, transfers, and spousal protections
Final Thoughts
Paying for nursing home care is stressful, and the rules were not designed to be easy to understand. The most useful thing you can do is ask questions early, keep records of every payment and transfer, and get professional advice before making big financial moves.
Do you have a question about long-term care costs? [Contact link or comment prompt]
Disclaimer: This article is for general educational purposes only and is not legal, financial, or medical advice. Medicare and Medicaid rules, dollar amounts, and eligibility limits change, and your situation may differ. Please consult Medicare, your state Medicaid agency, or a qualified elder law attorney for guidance about your family’s circumstances.
Sources:
Senior Health Insurance Program (SHIP) | CMS
2026 Medicare Parts A & B Premiums and Deductibles | CMS
How property transfers can impact Medicaid for long-term care (FAQ) | Illinois Legal Aid Online