How to pay for nursing home care: 7 funding options
Long-term nursing home care in the US costs a median of $108,000 a year, and most families don't have a plan until the bill arrives. The good news: there are seven well-established funding paths, and most residents end up using two or three of them in sequence. Here's how each one works in practice.
1. Medicare (short-term only)
Medicare Part A pays for up to 100 days of skilled nursing facility care per benefit period — but only after a qualifying 3-day inpatient hospital stay and only while daily skilled care is needed. Days 1–20 are fully covered; days 21–100 carry a daily co-pay (around $204 in 2025). After 100 days, or as soon as skilled care is no longer needed, Medicare pays nothing. Plan for the transition from day 1.
2. Medicaid (the long-term default)
Medicaid pays for about 62% of US long-stay residents. It is means-tested: most states require monthly income under roughly $2,901 (2025) and countable assets under $2,000 for a single applicant. The home, one car and personal effects are usually exempt. Spousal protections keep significant assets and income for a spouse still at home. Apply as soon as you might qualify — approval takes 45–90 days. See our guide on Medicaid nursing home eligibility for the full picture.
3. Long-term care insurance
A long-term care policy pays a daily benefit (typically $150–$300) for nursing home, assisted living or in-home care after a 90-day elimination period. Policies bought before age 60 are dramatically cheaper. Hybrid life-insurance/long-term-care products have largely replaced stand-alone policies — they pay out as life insurance if long-term care is never needed.
4. Veterans Affairs (VA) benefits
Wartime veterans and their surviving spouses may qualify for the VA Aid & Attendance pension — up to $2,358/month for a single veteran (2025). The VA also operates Community Living Centers (nursing homes for veterans) and contracts with private nursing homes through the State Veterans Home program. Apply through your local VA office or a state-accredited VSO; the process takes 4–8 months.
5. Life insurance conversions
Whole-life and universal-life policies can be converted to a 'long-term care benefit plan' (sometimes called a life settlement) that pays the policy's cash value monthly toward care, while you're alive. This typically yields 30–60% of the policy's face value. Worth exploring before letting a policy lapse.
6. Reverse mortgage (only if a spouse stays home)
A reverse mortgage lets a homeowner aged 62+ pull equity out of their home as cash — useful when one spouse needs nursing care and the other still lives in the house. If both spouses move out for 12 months, the loan becomes due. Not useful for solo applicants moving to a facility, since the home then has to be sold to repay the loan.
7. Personal care agreements
A written, dated agreement that pays a family caregiver a fair market wage for documented hours of care. Counts as a legitimate expense (not a gift) for Medicaid look-back purposes, which is its main planning value. The caregiver reports the income on their tax return.
Frequently asked questions
Authoritative sources
The figures and rules in this guide are drawn from the following official and independent sources. Open any link to verify the latest published numbers.
- Paying for long-term care
U.S. Administration for Community Living — LongTermCare.gov
- Cost of Care Survey 2024
Genworth
- Aid & Attendance pension
U.S. Department of Veterans Affairs
- State Health Insurance Assistance Program (SHIP)
SHIPHelp.org
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About this guide
Written and reviewed by the Nursing Home Match editorial team. We update guides at least annually and verify every figure against the official sources listed above. This guide is general information, not personal, medical, financial or legal advice. Always confirm details on Medicare.gov Care Compare (United States) or My Aged Care (Australia), or speak to a qualified adviser before making decisions.