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Nursing Home Basics: Who Qualifies, Who Pays, and Other Helpful Facts

Why It Matters

Understanding how nursing homes work can be confusing because standards for eligibility, insurance coverage, etc. vary from state to state in the US.


In this second article in our series on nursing homes (read Part I here), we answer some commonly asked questions about nursing home structures and functions.

Who Is Eligible to Enter a Nursing Home?

People qualify for nursing home/facility level of care (NFLOC) if they are unable to live alone safely in the community. There is no federal definition of NFLOC and the exact rules governing level of care vary from state to state. Despite this lack of consistency, the following four areas are commonly considered when a state determines a person’s level of care need: physical functional ability; health issues/medical needs; cognitive impairment; and behavioral issues. In many states, there has been significant rebalancing toward home and community-based services and away from nursing home care. Check state websites for updated information on specific eligibility requirements.

Who Pays for Nursing Home Care?

Medicare is the federal health insurance program for people in the US who are 65 or older, some younger people with disabilities, people with End-Stage Renal Disease. A common misconception is that Medicare will pay for all nursing home costs. This is not true.

Post-acute care (PAC) or skilled nursing facility (SNF) care is usually covered by Medicare or private insurance up to 100 days (100 percent for 20 days and then 80 percent for 80 days based on certain criteria). Long-term care (meals, room and board, and basic health services) is often paid for privately until funds are spent down. A “spend down” is how someone with Medicare may qualify for Medicaid — a joint federal and state program that provides health coverage to some people with limited income and resources — even if their income is higher than a state's Medicaid limit. Under a spend down, a state lets the person subtract their non-covered medical expenses and cost sharing (like Medicare premiums and deductibles) from their available income. Each state’s Medicaid program covers approximately 70 percent of nursing home care. Long-term care insurance can also pay for nursing home care, but relatively few people have it.

The average cost of a nursing home is over $90,000 per year but this varies state to state. Multiple organizations provide information about nursing home costs and Medicaid daily rates online, including the American Council on Aging.

Who Oversees and Regulates Nursing Home Quality and Safety?

The Centers for Medicare and Medicaid Services (CMS) oversees nursing home quality and safety at the federal level. Several divisions have regulations that pertain to nursing homes. 

The CMS Division of Nursing Homes develops and oversees most nursing home regulations. CMS delegates nursing home surveys and inspections to a designated organization in each state, usually the State Survey Agency (SSA). SSAs conduct annual, recertification, and complaint surveys and assess compliance with regulations. There is also a Special Focus Facility program for a small number of low-performing nursing homes that receive more intensive oversight and guidance on quality improvement in each state.

How Do We Measure Nursing Home Quality?

Because definitions of quality may vary, there are different methods used by federal, state, or private organizations to collect and analyze quality data. Here are a few examples:

  • Minimum Data Set (MDS) is a standardized assessment tool required by CMS that measures health status in nursing home residents. All nursing homes that accept Medicare or Medicaid must submit the MDS regularly for each resident to receive payment.
  • National Healthcare Safety Network is an electronic system for infection reporting, including COVID and other data that goes to CDC.
  • CMS Five Star Quality Rating System gathers information from inspections (surveys), quality measures, and staffing from each nursing home and makes this information publicly available on the CMS website.
  • Medicare’s Care Compare allows users to locate and compare data from nursing homes.

What are Quality Innovation Networks-Quality Improvement Organizations (QIN-QIOs)?

QIN-QIOs focus on working with nursing homes, states, and regions to improve quality of life and quality of care across settings, including nursing homes. QIN-QIOs have their own separate line item in the US federal budget to support the national program which covers all 50 states and US territories. QIN-QIOs are not part of state survey agencies or the survey process. Their focus is on quality improvement, support, education, and training, which are often provided free or at very low cost.

Who Works in Nursing Homes?

Women make up most of the nursing home workforce, particularly direct care workers such as certified nursing assistants (CNAs). (Almost 90 percent of nursing assistants are female). Many are single parents. People of color comprise most of the US nursing assistant workforce.

Most nursing assistants are low-income wage earners. Many live at or near the federal poverty level and almost half receive some type of public assistance. Nursing homes typically pay CNAs the minimum wage, but this is not necessarily a livable wage depending on where they live. For this reason, CNAs often work in multiple settings and have multiple jobs. For many CNAs, English is not their first language, and they may have limited English proficiency. Many are immigrants.

What Are Some Challenges Faced by the Nursing Home Workforce?

There are many issues facing nursing home CNAs today and some new opportunities. The National Association of Health Care Assistants (NAHCA) conducted a survey of 1,420 CNAs in July 2023. When asked about their jobs, many CNAs reported that low wages and benefits would be the primary reasons they intend to seek another type of employment. They also cited unstable or inadequate hours, lack of supervisor’s/manager’s support, lack of career advancement or professional development, and feeling under-valued.

High rates of turnover (in some cases over 100 percent in a year) and the need for stronger, stable leadership are important reasons to better support CNAs and other direct care workers. Creating and testing standardized career ladders or lattices and providing more training and education on topics of interest to CNAs represent opportunities to promote better retention and reduce turnover. Another way to respond to CNA concerns is by becoming an Age-Friendly Health Systems Nursing Home.

Alice Bonner, PhD, RN, is IHI’s Senior Advisor for Aging. Amanda Meier, BSW, MA, is IHI’s Project Manager, Age-Friendly Health Systems. If you have any questions or ideas about nursing homes or related policy issues, please feel free to reach out to Alice Bonner ( or Amanda Meier (

You may also be interested in:

The Basics We (and Policymakers) Should Know about Nursing Homes

Centering What Matters: The Core of Age-Friendly Care