Planning & Funding care

The cost of long-term care for seniors varies as much as the types of care available and the degree of assistance you or a loved one need. Below is a review of some of the more common funding options for senior housing and long-term care services. Senior care can range from a few hours a week of personal or companionship care by an in-home care provider, to full-time in-home care, to skilled nursing care in a nursing home.

Many who have not done their research mistakenly believe that Medicare can be the answer for long-term care. In reality, it covers only a very narrow range of long-term care costs. It is important that you understand ahead of time the benefits and limits of Medicare so you can adequately prepare for long-term care needs. According to the Henry J. Kaiser Family Foundation Web site, nursing home rates vary widely, but can exceed $5,000 a month. In-home care is generally far less expensive, but costs vary greatly, depending on where you live, the level of care and number of hours of services needed per week.

How will you pay for long-term care? Options include Medicaid (if you qualify), long-term care insurance, Veterans Administration benefits, and out of pocket—from your savings and assets.

va aid & attendance benefit

Veterans may qualify for Veterans Administration benefits to cover some of the cost of in-home care. A veteran who served at least 90 days on active duty with one day during a period of war may be eligible for the Veterans Administration’s non-service connected disability pension.Paying Out of Pocket for Long-Term CareSeniors and their families often must tap into savings and assets to pay for long-term care, as many cannot afford long-term care insurance, many do not qualify for Medicaid, and Medicare coverage is very limited.

long term care insurance

Long-term care insurance can help seniors pay the costs of long-term care, helping to avoid depletion of life savings for extended care. However, coverage is expensive. Premiums increase the older you are when you buy it. The Kaiser Family Foundation reports that policies purchased at age 65 average $1,800 a year for four years of comprehensive coverage and $5,900 a year when purchased at age 79.For those earning ample income, premiums can be affordable, but you need to make sure you will still be able to pay the premium after you retire. And even if you can, you may not be able to justify the expense if you have the resources to pay for care out of pocket. Your financial planner can help guide you in this decision. Not all long-term insurance policies are created equal, so be sure you know what you are buying:Some policies cover only specific types of long-term care, while others will cover a variety, such as nursing home, assisted living or in-home care.

medicaid & state programs

Medicaid, the largest public payer for long-term care, will (if you qualify), pay for nursing home care and other costs that Medicare does not cover. It may also cover some in-home care services. Those who receive Supplemental Security Income (SSI) are likely to qualify for Medicaid automatically. You also can qualify if you have limited income and assets. Eligibility guidelines vary by state. Assets considered for eligibility generally do not include homes, cars, household furnishings, or burial plots. In some cases you may still qualify if your income exceeds your state’s eligibility level. And in several states, seniors may qualify for Medicaid after they have spent their income and assets on nursing home or other health care expenses. This is commonly referred to as the Medicaid “spend down.” Older adults who do not qualify for larger government programs like Medicaid may find they qualify for state programs. Information on these can be found through local Area Agencies on Aging.


As previously mentioned, Medicare applies to long-term care in limited circumstances, such as immediately following a hospital stay. Medicare covers short-term, physician-prescribed home health care for skilled nursing, physical, occupational and speech therapy, and medical social services, as well as assistance with bathing, feeding and other personal care by a home health aide. Medicare does not pay for extended care.

Medicare also covers up to 100 days of nursing home care in limited instances, and helps cover the cost of some durable medical equipment for home use, as well as for hospice care for people diagnosed with terminal illness and a life expectancy of six months or less.