Understanding Medicare and Insurance Coverage for Post-Acute Care

Few things are more stressful than trying to figure out how you're going to pay for care after a hospital stay. You're already dealing with a health crisis — the last thing you need is to spend hours on hold with an insurance company, trying to decode benefits language that seems designed to confuse you.

But here's the reality: understanding how Medicare and private insurance cover post-acute care can save you thousands of dollars and, more importantly, help you make informed decisions about where your loved one receives care. The difference between choosing an in-network skilled nursing facility and an out-of-network one, or knowing that Medicare covers home health but only under specific conditions, can have enormous financial and clinical consequences.

This guide breaks down how Medicare (Parts A, B, C, and D), Medicaid, and private insurance cover the major types of post-acute care — and what to do when coverage gets denied.

In This Guide

• What Is Post-Acute Care, Exactly?
• Medicare Coverage for Post-Acute Care
• Medicaid Coverage for Post-Acute Care
• Private Insurance Coverage
• What to Do When Coverage Is Denied
• Practical Tips for Managing Post-Acute Care Costs
• Using NDPAP to Find Covered Providers
• The Bottom Line

What Is Post-Acute Care, Exactly?

Post-acute care refers to the medical and rehabilitative services a patient receives after being discharged from an acute care hospital. It's the care that bridges the gap between hospitalization and full recovery (or, in some cases, long-term management of a chronic condition).

The major categories of post-acute care include:

Skilled Nursing Facilities (SNFs) — inpatient facilities that provide 24-hour nursing care, physical therapy, occupational therapy, and other rehabilitative services. Patients typically stay for days to weeks after a hospitalization.

Home Health Care — skilled medical services delivered in the patient's home, including nursing care, physical therapy, speech therapy, and home health aide services.

Inpatient Rehabilitation Facilities (IRFs) — hospitals or units that specialize in intensive rehabilitation for patients recovering from strokes, traumatic brain injuries, joint replacements, and other conditions requiring at least three hours of therapy per day.

Long-Term Acute Care Hospitals (LTACHs) — facilities for patients who need extended hospital-level care, often including ventilator weaning, complex wound care, or management of multiple chronic conditions.

Hospice Care — comfort-focused care for patients with a terminal illness and a life expectancy of six months or less.

Each of these settings has different insurance coverage rules, eligibility requirements, and cost-sharing structures. Let's walk through them.

Medicare Coverage for Post-Acute Care

Medicare is the primary payer for most post-acute care in the United States. If you or your loved one is 65 or older, or qualifies for Medicare due to disability, understanding these benefits is essential.

Medicare Part A: Inpatient and Facility-Based Care

Medicare Part A covers inpatient hospital stays and, critically, many types of post-acute facility care. Here's what you need to know:

Skilled Nursing Facility (SNF) Care

Medicare Part A covers up to 100 days in a skilled nursing facility per benefit period, but with important caveats:

The patient must have had a qualifying inpatient hospital stay of at least three consecutive days (not counting the discharge day). This is known as the "three-day rule," and it's one of the most common reasons SNF coverage gets denied. Observation stays — even if the patient spends several days in the hospital — do not count as inpatient days for this purpose. Always ask the hospital whether your loved one has been admitted as an inpatient or placed under observation status.

Days 1 through 20 in the SNF are covered in full by Medicare (after the Part A deductible, which is $1,676 in 2025). Days 21 through 100 require a daily coinsurance payment of $209.50 (2025 rate). After day 100, Medicare coverage ends entirely, and the patient is responsible for the full cost.

The patient must also require skilled care — meaning nursing services or therapy that can only be provided by licensed professionals. Custodial care (help with bathing, dressing, eating) is not covered by Medicare on its own, even in a skilled nursing facility.

Inpatient Rehabilitation Facilities (IRFs)

Medicare Part A covers IRF stays for patients who meet specific criteria: they must need intensive rehabilitation (at least three hours of therapy per day, five days per week), and they must be expected to benefit from and tolerate that level of therapy. The same Part A deductible applies, and there's no specific day limit like there is for SNFs — coverage continues as long as the care is medically necessary and the patient is making progress.

Long-Term Acute Care Hospitals (LTACHs)

LTACH stays are covered under Medicare Part A as well, with the same deductible and coinsurance structure as a regular hospital stay. However, LTACHs must meet certain criteria regarding average length of stay and patient acuity to qualify for Medicare's LTACH payment rates.

Hospice Care

Medicare Part A covers hospice care for patients who have been certified by two physicians as having a terminal illness with a life expectancy of six months or less. Hospice coverage includes nursing care, pain management, counseling, medical equipment, and medications related to the terminal diagnosis. There are minimal out-of-pocket costs — typically a $5 copay for prescription drugs and 5% coinsurance for inpatient respite care.

Importantly, electing hospice does not mean giving up all medical care. Patients can still receive treatment for conditions unrelated to their terminal diagnosis. And if a patient's condition improves or they change their mind, they can revoke hospice and return to standard Medicare coverage at any time.

For more information about hospice services and what to expect, see our guide on Hospice Care.

Medicare Part B: Outpatient and Home-Based Services

Home Health Care

This is one of the most valuable — and most misunderstood — Medicare benefits. Medicare Part B (and in some cases Part A) covers home health services with no copay and no deductible, as long as the following conditions are met:

The patient must be homebound, meaning leaving the home requires considerable effort. This doesn't mean the patient can never leave the house — medical appointments, religious services, and occasional trips are permitted. But the patient's condition must be such that leaving home is not a regular occurrence.

The patient must need skilled care — skilled nursing, physical therapy, speech therapy, or occupational therapy — on an intermittent basis. "Intermittent" generally means a few times a week, not around the clock.

A physician must certify the need for home health services and establish a plan of care.

When these conditions are met, Medicare covers skilled nursing visits, therapy sessions, medical social services, and part-time home health aide services. Importantly, there is no prior hospitalization requirement for home health — unlike SNF care, the patient doesn't need to have spent three days in the hospital first.

To find home health agencies in your area, you can search NDPAP's provider directory by location and service type.

Durable Medical Equipment (DME)

Medicare Part B covers durable medical equipment — wheelchairs, hospital beds, oxygen equipment, walkers, and other items — at 80% of the Medicare-approved amount after the Part B deductible ($257 in 2025). The patient is responsible for the remaining 20%.

DME must be ordered by a physician and supplied by a Medicare-enrolled supplier. Not all suppliers accept Medicare assignment (meaning they agree to accept the Medicare-approved amount as full payment), so it's worth checking before you order. Our guide on DME and Medical Equipment covers this topic in detail.

Medicare Part C: Medicare Advantage Plans

Medicare Advantage (Part C) plans are offered by private insurance companies and must cover everything that Original Medicare (Parts A and B) covers. However, Medicare Advantage plans can have different rules about:

Provider networks. Most Medicare Advantage plans are HMOs or PPOs, meaning you may need to use in-network providers for post-acute care. Going out of network can result in significantly higher costs or no coverage at all.

Prior authorization. Many Medicare Advantage plans require prior authorization for SNF admissions, home health services, IRF stays, and DME orders. This can create delays in care if not handled proactively.

Supplemental benefits. Some Medicare Advantage plans offer benefits beyond Original Medicare, such as extended home health visits, transportation to medical appointments, or coverage for custodial care.

If your loved one is on a Medicare Advantage plan, contact the plan directly before discharge to understand the specific coverage rules, network restrictions, and authorization requirements that apply.

Medicare Part D: Prescription Drug Coverage

After a hospitalization, medication management is critical. Medicare Part D covers prescription drugs, and your specific plan determines which medications are covered (the formulary), what your copays are, and whether prior authorization is needed for certain drugs.

One common issue after discharge: the hospital may have prescribed medications that are not on your Part D plan's formulary. In these situations, you or your provider can request a formulary exception or a transition supply (most Part D plans must provide a temporary 30-day supply of non-formulary drugs to ensure continuity of care).

🔍 Find Post-Acute Care Providers Near You Search our directory of 77,900+ providers to find home health, hospice, SNF, and rehab services in your area. Search Providers →

Medicaid Coverage for Post-Acute Care

Medicaid is a joint federal-state program that provides health coverage for low-income individuals and families. For post-acute care, Medicaid is particularly important because it covers services that Medicare does not — most notably, long-term custodial care.

Nursing home care. Medicaid is the largest payer of nursing home care in the United States. While Medicare only covers skilled nursing for up to 100 days, Medicaid covers long-term nursing home stays for eligible individuals. Eligibility is based on both income and assets, and the rules vary significantly by state.

Home and community-based services (HCBS). Most states offer Medicaid HCBS waivers that fund services designed to keep people in their homes and communities rather than in institutions. These can include personal care attendants, adult day programs, home modifications, respite care, and more.

Behavioral health services. Medicaid generally covers a broad range of behavioral health services, including therapy, psychiatric care, peer support, and crisis intervention. Coverage details vary by state.

If your loved one has both Medicare and Medicaid (known as being "dual eligible"), they may qualify for additional benefits and protections. Dual-eligible individuals often pay little to no out-of-pocket costs for post-acute care.

Private Insurance Coverage

For patients under 65 who have employer-sponsored or marketplace insurance, post-acute care coverage depends on the specific plan. However, several general principles apply:

The Affordable Care Act requires coverage of rehabilitative and habilitative services as one of the ten essential health benefits. This means most private plans must cover some level of post-acute rehabilitative care, though the specifics (duration, setting, cost-sharing) vary widely.

Network restrictions matter enormously. Post-acute care can be expensive, and the difference between in-network and out-of-network pricing can be substantial. Before agreeing to a post-acute care placement, verify that the facility or agency is in your plan's network.

Prior authorization is common. Most private insurers require prior authorization for inpatient rehabilitation, skilled nursing facility stays, and home health services. The hospital's case management or utilization review team typically handles this, but follow up to make sure it's been completed.

Out-of-pocket maximums apply. Under the ACA, all marketplace and most employer plans have annual out-of-pocket maximums. Once you hit this limit, the plan covers 100% of covered services for the rest of the year. In 2025, the maximum out-of-pocket limit for marketplace plans is $9,200 for an individual.

📋 Understanding Your Care Options? Read: What Happens After the Hospital: A Step-by-Step Guide to Post-Acute Care

What to Do When Coverage Is Denied

Insurance denials for post-acute care are frustratingly common — and they're often overturned on appeal. If you receive a denial, here's what to do:

Understand the reason for the denial. The denial letter must explain why the claim was denied. Common reasons include: the service wasn't deemed medically necessary, prior authorization wasn't obtained, the provider was out of network, or eligibility criteria weren't met.

File an appeal promptly. You have the right to appeal any denial. For Medicare, you have 120 days from the date of the denial to file a redetermination (Level 1 appeal). For private insurance, the timeline varies by state and plan, but you typically have 30 to 180 days.

Ask your provider for support. Physicians, case managers, and social workers can provide medical documentation and letters of medical necessity that strengthen your appeal. A peer-to-peer review — where your doctor speaks directly with the insurance company's medical director — can sometimes resolve denials quickly.

Contact your State Health Insurance Assistance Program (SHIP). Every state has a SHIP that provides free, unbiased counseling about Medicare benefits and can help with appeals. Find your local SHIP at shiphelp.org.

File a complaint if necessary. If you believe the denial violates mental health parity laws, the ACA, or your state's insurance regulations, you can file a complaint with your state's Department of Insurance.

Practical Tips for Managing Post-Acute Care Costs

Beyond understanding your insurance coverage, here are some practical strategies for managing the financial side of post-acute care:

Ask about financial assistance. Many hospitals and post-acute care providers offer financial assistance programs, charity care, or payment plans for patients who can't afford their share of costs. You won't know unless you ask.

Review your bills carefully. Medical billing errors are common. Check every bill against your Explanation of Benefits (EOB) from your insurer and dispute any charges that don't match.

Consider a Medigap policy. If your loved one has Original Medicare, a Medigap (Medicare Supplement) policy can cover some or all of the cost-sharing amounts — like the SNF daily coinsurance or the Part B 20% coinsurance for DME. Medigap policies are most affordable when purchased during your initial enrollment period.

Plan ahead for long-term care. Medicare does not cover long-term custodial care. If there's a possibility your loved one will need ongoing help with daily activities, it's worth looking into long-term care insurance, Medicaid planning, or other financial strategies. An elder law attorney can help with this.

Using NDPAP to Find Covered Providers

When you're trying to find post-acute care providers who accept your insurance, NDPAP can help. Our national directory includes detailed information about providers across all 50 states, including the types of services they offer and the areas they serve.

You can search by location, provider type (home health, hospice, SNF, DME, etc.), and filter results to find providers that match your needs. While insurance acceptance information may need to be confirmed directly with the provider, NDPAP gives you a comprehensive starting point for identifying your options.

🔍 Compare Providers in Your Area Browse verified providers, compare services, and find contact information. Search All Providers →

The Bottom Line

Navigating insurance coverage for post-acute care is complicated, but it doesn't have to be overwhelming. The key takeaways:

Medicare Part A covers skilled nursing facilities (with the three-day rule), inpatient rehab, LTACHs, and hospice. Medicare Part B covers home health (with no copay for eligible patients) and DME. Medicare Advantage plans must cover the same services but may have network restrictions and prior authorization requirements.

Medicaid fills critical gaps, especially for long-term custodial care and home and community-based services. Private insurance coverage varies by plan, but rehabilitative services are considered an essential health benefit under the ACA.

When coverage is denied, appeal. The majority of post-acute care denials can be overturned with proper documentation and advocacy.

And when you're not sure where to start, search NDPAP's directory to find providers in your area and begin the conversation about what services are available and how they're covered.

Your loved one's recovery shouldn't be limited by confusion about insurance. With the right information, you can make sure they get the care they need.