[Last updated November 21, 2025]
Finding quality care for a parent or loved one is challenging, but figuring out how to pay for it can feel overwhelming. Nursing home care is expensive, and most families need time to explore their options and develop a plan. The good news is that multiple payment sources exist, and many families use a combination of methods to cover costs. This guide will walk you through the primary ways to pay for nursing home care, helping you understand which options might work for your situation.
The cost of nursing home care in the U.S.
Understanding the cost of nursing home care is the first step in planning to pay for it. According to Genworth’s Cost of Care Survey, the national median cost for nursing home care is:
- $9,277 per month, or approximately $111,325 annually, for a semiprivate room.
- $10,646 per month, or about $127,750 per year, for a private room.
These costs vary considerably by location. For example, nursing home care in Louisiana averages around $7,483 monthly for a semiprivate room, while the same care in Alaska can exceed $30,371 per month. Other high-cost states include Connecticut, Massachusetts, and Hawaii, where monthly expenses can surpass $14,000.
Nursing home fees typically cover:
- Room and board.
- 24-hour nursing care and supervision.
- Personal care assistance (bathing, dressing, toileting, etc.).
- Housekeeping and laundry.
- Basic medical supplies.
- Recreational activities.
Depending on the facility, some of these items as well as other services and amenities may cost extra.
Three key factors drive cost differences: the level of care needed (more intensive medical care costs more), room type (private rooms cost 10% to 15% more than semiprivate rooms), and geographic location (urban areas and states with higher costs of living charge more).
Paying out of pocket with personal funds and savings
Many families begin by using personal resources to pay for care. This approach offers the most flexibility and control over care choices, as you’re not bound by insurance or government program restrictions.
- How it works: Funds come from the resident’s savings accounts, checking accounts, certificates of deposit, investment portfolios, retirement accounts (401(k)s, IRAs, pensions, etc.), proceeds from selling a home or other property, or other personal assets like vehicles or valuables.
- Who it applies to: Anyone with accumulated assets, though this method works best for those with substantial savings or family members who can contribute financially.
- Important considerations: While self-paying offers freedom of choice, nursing home costs can deplete savings quickly, often within one to three years for middle-income families. Careful financial planning is essential. Some families strategically spend down assets to eventually qualify for Medicaid coverage (more on that later). Consult with an elder law attorney or financial planner before making major decisions, as some asset transfers can affect future Medicaid eligibility.
Can a nursing home take your Social Security check?
This is one of the most common concerns families have. Nursing homes don’t automatically “take” a person’s Social Security check or pension payments. However, these income sources are typically used to help pay for care costs when someone resides in a nursing home.
When Medicaid eventually covers nursing home care, the rules change somewhat. Most of a resident’s monthly income, including Social Security and pension payments, must be applied toward their nursing home bill. Medicaid allows residents to keep a small personal needs allowance (usually $30 to $100 per month, depending on the state) for personal expenses like haircuts, clothing, or small comfort items. Additionally, some income may be set aside for a spouse still living at home.
Personal insurance products
Several insurance products can help fund nursing home care if purchased before the need arises. Here are a few personal insurance options.
Using long-term care insurance to cover nursing home care
- How it works: Long-term care insurance is specifically designed to cover nursing home care, assisted living, and in-home care. Policyholders pay premiums for years, then receive benefits when they need covered services.
- Who it applies to: People who purchased policies before developing serious health conditions. Most people buy coverage in their 50s or early 60s.
- Important considerations: Policies vary significantly in coverage amounts, benefit periods, elimination periods (waiting periods before benefits begin), and inflation protection. Review your policy carefully to understand daily or monthly benefit limits, coverage duration, and any exclusions. Some policies have been discontinued or had premiums increase dramatically, creating financial strain for policyholders.
Using life insurance to cover nursing home care
- How it works: Some life insurance policies offer accelerated death benefits or long-term care riders that allow policyholders to access a portion of the death benefit while still living to pay for qualifying care. Alternatively, policies can be sold through life settlement companies or surrendered for cash value.
- Who it applies to: People with permanent life insurance policies (whole life or universal life) that have cash value or accelerated benefit options.
- Important considerations: Using life insurance reduces or eliminates the death benefit for beneficiaries. Tax implications vary depending on the method used. Consult with a financial advisor or insurance specialist before proceeding.
Using annuities to pay for nursing home care
- How it works: Annuities are financial products that provide regular payments over time. Immediate annuities convert a lump sum into monthly income that can help pay for care. Some annuities include long-term care riders or provisions.
- Who it applies to: Individuals who have annuity products or those considering converting assets into guaranteed income streams.
- Important considerations: Annuities come with fees, surrender charges, and varying terms. They’re complex financial products best evaluated with professional guidance. Medicaid planning with annuities requires specific types that meet government requirements.
Can Medicare pay for nursing home care?
This is perhaps the most misunderstood aspect of nursing home financing. Medicare does not pay for long-term custodial nursing home care, the type most residents need. However, Medicare Part A may cover short-term skilled nursing facility care following a qualifying hospital stay.
To qualify, a person must be hospitalized for at least three consecutive days, be admitted to a Medicare-certified nursing facility within 30 days of discharge, and require skilled nursing or rehabilitation services.
Medicare’s coverage works as follows:
- Medicare covers 100% of costs for the first 20 days.
- For days 21 to 100, the patient pays $217 per day (in 2026).
- After 100 days, Medicare coverage ends entirely.
Sometimes nursing home residents experience a qualifying hospital stay and return to their facility. If the facility is Medicare-qualified and the resident needs skilled care, Medicare may cover that post-hospital period under the same rules.
Medicare skilled nursing coverage includes nursing care, physical therapy, occupational therapy, speech therapy, medications administered during the stay, medical supplies, room and board, and meals. When the coverage period ends, families must find other payment sources if the person needs to remain in the nursing home.
Can Medicaid pay for nursing home care?
Medicaid is the primary payer for long-term nursing home care in the United States, covering approximately two-thirds of all nursing home residents. Unlike Medicare, Medicaid does cover long-term custodial care.
- How it works: Medicaid is a joint federal-state program with eligibility based on financial need. To qualify, applicants must meet strict income and asset limits.
- Who it applies to: People with limited income and assets, or those who have spent down their resources paying privately for care.
- Important considerations: Not all assets count toward the limit. Typically excluded are personal belongings, one vehicle, and prepaid funeral arrangements. For married couples, special rules protect the community spouse (the spouse not receiving care) from impoverishment, allowing them to retain more assets and income, including the individual’s home.
Estate recovery is also something to consider, which is when the state in which the resident lived attempts to recover some of its expenditure after the resident passes, which may mean collecting the value of the assets that the resident left behind in certain cases.
The Medicaid application process is complex and varies by state. Many families work with elder law attorneys to navigate the rules, ensure proper documentation, and avoid penalties. Medicaid has a five-year look-back period that reviews asset transfers. Improper transfers can result in penalties, which can delay coverage.
Hospice and nursing home care
Hospice coverage does not pay for room and board in a nursing home. Hospice care, covered by Medicare, Medicaid, or private insurance, pays specifically for comfort-focused, palliative services for individuals with terminal illnesses (typically those with life expectancies of six months or less).
When a nursing home resident enrolls in hospice, the hospice benefit covers pain management, symptom control, medical equipment, medications related to the terminal diagnosis, counseling, and spiritual support. The resident or their family still owes the nursing home for room and board charges.
Families can coordinate hospice with nursing home services relatively smoothly. The hospice team works alongside nursing home staff to provide specialized end-of-life care. In many cases, if someone qualifies for Medicaid, Medicaid continues covering the room and board portion while hospice covers the comfort care services. Private-pay residents continue paying the facility’s room and board charges separately.
Veterans benefits can help pay for nursing home care
Veterans and their surviving spouses may qualify for benefits that help with nursing home costs.
The Aid and Attendance benefit
- How it works: Aid and Attendance provides additional monthly income to eligible Veterans or surviving spouses who need assistance with daily activities. While not specifically a nursing home benefit, recipients can use these funds for any life expenses, including nursing home care.
- Who it applies to: Wartime Veterans or surviving spouses who meet service, disability, and financial requirements.
- Important considerations: The benefit amount depends on whether the recipient is a single Veteran, married Veteran, or surviving spouse. Application processing can take several months. This benefit coordinates with other VA benefits and doesn’t disqualify recipients from Medicaid.
Veterans’ nursing home programs
The VA operates State Veterans Homes (through partnerships with states) and VA Community Living Centers that provide nursing home care specifically for Veterans. Eligibility depends on service history, disability ratings, and income. Priority goes to Veterans with service-connected disabilities.
These facilities charge fees based on the resident’s income and disability status. Veterans with service-connected conditions may receive significantly reduced rates or free care.
Does TRICARE cover nursing home care?
TRICARE, the health program for military members and their families, has extremely limited nursing home coverage. TRICARE typically does not cover long-term nursing home care. It may cover limited skilled nursing facility care following hospitalization, similar to Medicare, but beneficiaries should not rely on TRICARE as a primary payment source for extended nursing home stays.
Paying for nursing home care rarely involves just one source. Most families combine methods, perhaps starting with personal savings, transitioning to long-term care insurance or VA benefits, and eventually qualifying for Medicaid. The key is starting the conversation early, understanding what resources are available, and seeking professional guidance from elder law attorneys, financial planners, or VA benefits counselors who can help you develop a realistic plan for your family’s specific situation.
This information is for educational purposes and is not legal, financial, tax, or investment advice. It should not be substituted for information from professionals authorized to practice in your area. You should always consult a suitably qualified professional regarding your specific situation.
