Medicare gap leaves retirees facing US$115,000 annual nursing-home bill

Medicare generally does not cover ongoing long-term care, including nursing-home and custodial assistance for people with chronic illnesses or disabilities. The coverage gap can leave retirees facing substantial costs if they assume Medicare will fund extended care needs.

Medicare Part A may cover up to 100 days of skilled nursing-facility care per benefit period after a qualifying inpatient hospital stay, provided other eligibility requirements are met. That provision concerns short-term skilled care and does not extend to ongoing long-term or custodial care.

A 2025 CareScout cost-of-care survey put the US national median annual cost of a semiprivate nursing-home room at US$114,975, based on a median daily rate of US$315. Costs vary by location, facility and level of care.

Medicaid is generally the primary payer for nursing-facility care for eligible low-income people, although eligibility rules vary by state and can include income and asset limits. Other retirees may need long-term-care insurance or personal savings to meet the expense.

The American Council of Life Insurers found that 39% of surveyed middle-class households expected Medicare to pay for long-term care. The survey covered 1,404 households with annual incomes between US$50,000 and US$150,000, reflecting expectations rather than actual coverage.

The potential exposure is significant. The US Department of Health and Human Services says people turning 65 have a nearly 70% chance of needing some long-term-care services. Fidelity’s 2026 estimate of US$185,500 in healthcare costs for a 65-year-old with Original Medicare and Part D excludes long-term-care expenses.