Guide
How to pay for long-term care: all your options on one page
Updated October 15, 2026 · Reviewed against official sources
The answer depends on the type of care, your loved one's income and assets, their military history and the state where they live. Before you look at the options, have two numbers handy: how much the care they need costs (see how much a nursing home costs and the home care calculator) and how much they get each month from Social Security, pensions and other income.
Your options at a glance
| Option | What it can pay for | Who it's for | Guide |
|---|---|---|---|
| Income and savings | Any type of care | Everyone, at first | How much it costs |
| Medicaid | Nursing home care; in many states, home care, adult day care and services in assisted living | People with limited income and assets | Does Medicaid pay? |
| Medicare | Short-term rehab, home health, hospice | People with Medicare | What Medicare covers |
| VA | Pension with Aid and Attendance, VA facilities and services | Veterans and their survivors | Aid and Attendance |
| Long-term care insurance | Home care, adult day care, a care facility, depending on the policy | People who bought a policy | Long-term care insurance |
| Life insurance | An advance on the death benefit, depending on the policy | People whose policy has that option | This guide |
| The home | Selling, renting or a reverse mortgage | Homeowners | Medicaid and the home |
| PACE | All medical and support care, coordinated | People 55 or older, in areas with PACE | The PACE program |
| Community programs | Meals, respite care, transportation, help at home | People 60 or older and their caregivers | Help for family caregivers |
The person's own income and savings
This is what gets used first: Social Security, pensions, savings or retirement accounts. Make a list of income, fixed expenses and assets; it will also help with a future Medicaid application. Before you put assets in the children's names, remember that Medicaid reviews transfers from the last 5 years.
Medicaid
It's the most important source of payment for long-term care. Nursing home care is a required benefit in every state for people who qualify; the typical asset limit for one person is $2,000 in 2026, though it varies by state. Many states also pay for home care, adult day care or the services (not the rent) in assisted living through home and community-based waivers, which sometimes have waiting lists. In several states, Medicaid can even pay a family member to provide care.
Medicare: what it does and doesn't cover
Medicare doesn't pay for long-term daily care (bathing, dressing, eating) or for assisted living. It does pay for the following, with conditions:
- Up to 100 days in a skilled nursing facility after a 3-day inpatient hospital stay: in 2026, $0 for days 1 to 20 and $217 a day for days 21 to 100. Read rehab after a hospital stay.
- Home health care (nursing and therapy) if the person is homebound.
- Hospice for a terminal illness. See hospice and palliative care.
Veterans benefits
If your loved one served during wartime, or is the widow or widower of a veteran, ask about the pension with Aid and Attendance, which since December 1, 2025, pays up to $29,093 a year for a veteran with no dependents, depending on their income and medical expenses. The VA also has its own facilities, State Veterans Homes and services at home. Details in veterans benefits.
Long-term care insurance and life insurance
Look through your loved one's papers for a long-term care insurance policy; read how to use the policy.
Life insurance can also help. According to the ACL, some policies have an accelerated death benefit: a tax-free advance paid while the person is alive, for example if they have a terminal illness or live permanently in a nursing home. That advance is subtracted from what the beneficiaries will receive, and it can affect Medicaid eligibility. Selling the policy (a life settlement) is another option, although the money from the sale may be taxed; talk with an advisor before you decide.
The home: selling, renting or a reverse mortgage
Many families sell or rent out the house. If your loved one wants to keep living there, there's the FHA-insured reverse mortgage, called a HECM. Under HUD rules:
- The youngest person who signs must be 62 or older, and the house must be their primary residence.
- Before signing, counseling from an approved, independent HECM counselor is required.
- The loan becomes due if the house is no longer the primary residence or if the person lives somewhere else for more than 12 months in a row because of a physical or mental illness (for example, in a nursing home), unless another borrower still lives there. It also becomes due if property taxes and homeowners insurance aren't paid.
- For loans started in 2026, the maximum claim amount HUD uses is $1,249,125.
That's why it's usually considered as a way to pay for home care, not a permanent move. Talk with your family and the counselor before you decide.
PACE and community programs
The PACE program coordinates all Medicare and Medicaid care for people 55 or older who can live at home with support; with Medicaid, there's no monthly premium. Older Americans Act programs offer meals, transportation, respite care and help at home, often at no cost. Find your local agency through the Eldercare Locator: 1-800-677-1116, Monday through Friday, 9 a.m. to 8 p.m. Eastern Time; if you prefer Spanish, ask for it when you call. Also see free programs for older adults and adult day centers.
Family help and taxes
When the children chip in, it helps to put in writing who pays for what (how to talk with your siblings). If a family member is paid to provide care and a Medicaid application may be coming, talk with an elder law attorney.
Two tax points, according to the IRS:
- Medical expenses: long-term care for a chronically ill person, under a care plan prescribed by a professional, can count as a medical expense; in a nursing home, meals and lodging count too if the main reason for being there is medical care. You can deduct the part that is more than 7.5% of your adjusted gross income, if you itemize deductions (Publication 502).
- Child and dependent care credit: if you pay for your dad's or mom's care so you can work, and your parent is your dependent, lives with you more than half the year and can't take care of themselves, you might qualify (Publication 503). Check the current amounts with a tax preparer.
A practical order to get started
- Measure the need with the doctor and our scales (as a guide only).
- Compare the monthly cost with the available income.
- Review insurance policies, military papers and the situation with the house.
- If the money won't last long, ask about Medicaid as soon as possible.
- Look for places that accept your form of payment in the directory or with the guided search.
Frequently asked questions
Do you have to spend all your money before applying for Medicaid?
You have to be within your state's asset limits, but the house, a vehicle and other assets often don't count, and a spouse who still lives at home keeps a share. See Medicaid and the home.
Which makes more sense: home care or a care facility?
It depends on the hours: a few hours a day at home usually cost less, and 24-hour care at home can cost more than a care facility. Compare with the calculator and look at small board and care homes.
Who can give me free guidance?
Your state's SHIP program (shiphelp.org) for Medicare, your local Area Agency on Aging and, if your loved one is in the hospital, the hospital social worker.
This guide is for information only and is not legal or financial advice. The numbers change every year; confirm them before you decide.
Sources
- CMS, 2026 Medicare Parts A & B Premiums and Deductibles: https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles (accessed October 15, 2026)
- Medicare.gov, Long-term care: https://www.medicare.gov/coverage/long-term-care (accessed October 15, 2026)
- CMS/CMCS, Informational Bulletin of December 9, 2025 (2026 SSI and Medicaid standards): https://www.medicaid.gov/federal-policy-guidance/downloads/cib12092025.pdf (accessed October 15, 2026)
- U.S. Department of Veterans Affairs, Veterans Pension rates: https://www.va.gov/pension/veterans-pension-rates/ (accessed October 15, 2026)
- ACL, Using Life Insurance to Pay for Long-Term Care: https://acl.gov/ltc/costs-and-who-pays/who-pays-long-term-care/using-life-insurance-to-pay-for-long-term-care (accessed October 15, 2026)
- HUD, FHA announces 2026 loan limits (including HECM): https://www.hud.gov/news/hud-no-25-145 (accessed October 15, 2026)
- eCFR, 24 CFR Part 206, Home Equity Conversion Mortgage Insurance (sections 206.27, 206.33, 206.39 and 206.41): https://www.ecfr.gov/current/title-24/subtitle-B/chapter-II/subchapter-B/part-206 (accessed October 15, 2026)
- Medicare.gov, PACE: https://www.medicare.gov/health-drug-plans/health-plans/your-coverage-options/other-medicare-health-plans/PACE (accessed October 15, 2026)
- ACL, Eldercare Locator: https://acl.gov/HousingandServices/FindHelp (accessed October 15, 2026)
- IRS, Publication 502 (2025), Medical and Dental Expenses: https://www.irs.gov/pub/irs-pdf/p502.pdf (accessed October 15, 2026)
- IRS, Publication 503 (2025), Child and Dependent Care Expenses: https://www.irs.gov/pub/irs-pdf/p503.pdf (accessed October 15, 2026)
This is general information, not medical, legal or financial advice. Rules vary by state and by year: confirm with the official agency that applies to you.
Keep reading
How much care costs
Nursing home, assisted living, adult day care, and home care prices by state (CareScout 2025). What the rate includes, what's extra, and how to pay.
Does Medicaid pay for care?
Yes, Medicaid pays for a nursing home if your loved one qualifies. 2026 limits, the 5-year look-back, spouse protections, waivers and how to apply.
What does Medicare cover?
Medicare pays for up to 100 days of rehab after a 3-day inpatient stay, not long-term nursing home care. 2026 costs, home health and hospice.
Veterans: Aid and Attendance
VA Aid and Attendance pension: 2026 rates, the net worth limit, State Veterans Homes and VA facilities to help pay for a veteran's care.
