Paying for senior care rarely comes from one place. Families often stitch together several payers: Medicaid, Medicare, VA benefits, and private money. Each one covers different care, for different people, under different rules. This guide explains who pays for what, who qualifies, and how the pieces fit together.

Start with the five payers below. Then read the deeper section on whichever one fits your family.

What Senior Care Costs

Before you figure out who pays, know the bill. These are national medians from CareScout's 2025 Cost of Care Survey, released in March 2026. Your state and metro area can run well above or below them.

Care Type Published Median Rate Median Annual Cost
Adult day health care about $95 per day about $24,700
Non-medical caregiver (home care) about $35 per hour about $80,080
Assisted living about $6,200 per month about $74,400
Nursing home (semi-private room) about $315 per day about $114,975
Nursing home (private room) about $355 per day about $129,575

These figures come from the CareScout 2025 Cost of Care Survey, released March 2, 2026, the most recent national data. In that survey, most care settings grew between 1% and 5%, and adult day health care fell 5%; cost growth slowed in 2025 after several years of steeper increases. The 2025 survey also merged homemaker and home health aide services into one "non-medical caregiver" category, priced at about $35 an hour. At about $114,975 a year, two years in a semi-private nursing home room runs past $229,000. That is the math behind combining payers rather than paying the whole bill from one source.

Who Pays for What: How to Pay for Senior Care at a Glance

Here's the quick comparison. Each payer is broken out in detail below.

Payer What It Covers Who Qualifies
Medicaid Long-term nursing home care; home- and community-based care in states that cover waiver groups Income below a set level, commonly limited countable assets, and enough need for help with daily activities
Medicare Up to 100 days of skilled nursing facility care per benefit period; home health care People who need skilled care after a qualifying 3-day inpatient stay, or homebound people who need intermittent skilled care; not for custodial-only care
VA benefits A monthly payment added to a VA pension Veterans with qualifying wartime service, and surviving spouses, who meet VA's age or disability, care-need, and net worth tests
Long-term care insurance Home care, community care, and facility care up to the policy's benefit limits People who hold a policy, meet its benefit trigger, and get through its elimination period
Private pay Whatever the other payers don't Anyone with savings, home equity, or convertible assets

Medicaid

Medicaid pays for the largest share of long-term care services in the country. It pays for long-term nursing home care, and states may also cover home- and community-based waiver groups, which brings care at home and in the community within reach for people who would otherwise need nursing-home-level care. It's the payer to look at closely once savings run low.

Because Medicaid is means-tested, eligibility turns on income and assets. A single applicant for aged or disabled Medicaid, including nursing home Medicaid, commonly faces a countable-asset limit of about $2,000, though each state sets its own limit and some have raised or eliminated it. In states that use a special income level for long-term care, monthly income before deductions must be at or below the level the state sets, which federal rules cap at $2,982, or 300% of the federal Supplemental Security Income (SSI) benefit rate for an individual. A state may set that level at or below $2,982, but never above it. Meeting the income level is not by itself a route into a home-care waiver: the person must also need the level of care a nursing facility or hospital provides. A few rules matter most:

  • Spousal protections. When one spouse needs care and the other stays home, the at-home spouse can keep a share of the couple's assets, the Community Spouse Resource Allowance (CSRA). For 2026, each state sets its resource standard between a federal minimum of $32,532 and a maximum of $162,660, and a fair hearing or court order can protect more than that. The at-home spouse can also keep a monthly income allowance of up to $4,066.50.
  • The home equity limit. For 2026, equity in the home above $752,000 blocks eligibility for long-term care Medicaid, and a state may elect a higher limit, up to $1,130,000. The limit doesn't apply at all when the applicant's spouse, a child under 21, or a blind or permanently and totally disabled child is lawfully living in the home. Being over the limit isn't a permanent bar either: a reverse mortgage or home equity loan can bring the equity down, and federal law requires a hardship waiver process.
  • The 5-year look-back. Medicaid looks back 60 months from the application date. Transfers for less than fair market value in that window can trigger a penalty period when Medicaid won't pay for nursing home care or waiver home care, though some transfers, such as those to a spouse, are exempt. California is different: Medi-Cal uses a 30-month look-back for nursing-facility care, counting only transfers made on or after January 1, 2026.

These rules are detailed, and the exemptions inside them matter. The mechanics get long, so we cover them separately rather than repeating them here. See our guides to Medicaid planning strategies and estate recovery.

Medicare

This is where families get surprised. Medicare does not pay for most long-term care.

What Medicare covers is short-term skilled care. After a qualifying inpatient hospital stay of at least three consecutive days, and only if you enter a Medicare-certified skilled nursing facility within a short time (generally 30 days) of leaving the hospital and need skilled services related to that hospital stay, Medicare Part A covers up to 100 days per benefit period: days 1 through 20 at $0 a day after you pay the $1,736 Part A deductible, days 21 through 100 with a $217 daily coinsurance in 2026, and nothing after day 100. It also covers home health care when the person is homebound, under a plan of care set by a physician or allowed practitioner, and needs intermittent skilled nursing or therapy.

If you were told you fell short of three inpatient days, don't stop there. Time under observation or in the emergency room before admission doesn't count toward the three days, even if you were there overnight, and Medicare names four ways around the rule: an Accountable Care Organization or Medicare Advantage waiver of the three-day minimum; re-entry to a SNF within 30 days, which needs no new qualifying stay; an appeal if the hospital changed your status from inpatient to outpatient getting observation services; and another payer, such as home health, Medicaid, or VA benefits, covering the stay instead. The appeal carries a deadline: the fast-appeal track is open while you're still in the hospital and for admissions from February 14, 2025 on, but for an earlier stay the retrospective filing window closed January 2, 2026 and a late request now needs good cause. Our guide to paying for nursing home care works through each route.

What it doesn't cover is custodial care: ongoing help with bathing, dressing, eating, and other daily activities when that's the only care needed. That rules out long-term nursing home stays and non-medical help at home or in assisted living. For those, families rely on Medicaid, VA benefits, insurance, or private pay.

VA Benefits and Aid and Attendance

If your loved one is a wartime veteran or the surviving spouse of one, the VA can add real money each month. The benefit is called VA Aid and Attendance (A&A), a monthly payment added to a VA pension for those who need help with daily living.

The VA sets these maximums as annual amounts. For the rate year effective through November 30, 2026, the maximum annual pension rates with Aid and Attendance are:

Read those figures as ceilings, not as checks. Each one is a Maximum Annual Pension Rate, and the VA bases the payment on the difference between your income for VA purposes and that rate, so the rate is the maximum amount of pension payable rather than an amount anyone is handed. A veteran or surviving spouse with countable income is paid that rate less the income. The VA pays a pension monthly, and the monthly amount is the yearly award divided by 12.

To qualify for the pension, the veteran must meet a minimum service test: at least 90 days of active duty for service that began before September 8, 1980, or generally 24 months or the full period called up for service that began later, with at least one day during a wartime period in either case. The veteran also can't have a dishonorable discharge and must be 65 or older, permanently and totally disabled, a nursing home patient for long-term care because of a disability, or receiving Social Security Disability Insurance or SSI. Aid and Attendance then requires a care need, such as needing another person's help with bathing, feeding, and dressing, or being a nursing home patient because of a disability. Net worth must also fall under $163,699. That limit counts assets and income together; the primary home, the car, and basic household goods don't count as assets. The VA also runs its own 3-year look-back, separate from the Medicaid one: it covers the 36 months before VA receives the pension claim, and transferring a covered asset for less than fair market value in that window (one that would have pushed net worth over the limit if kept) brings a penalty period of up to five years. That look-back never reaches back past October 18, 2018. Help from a relative or household member doesn't by itself prevent the award.

Private Pay

When government programs and insurance don't cover everything, families pay the rest themselves. Here are four common sources.

Out-of-Pocket and Savings

Start with what's already there: retirement accounts, pensions, Social Security income, and savings. The risk is duration: one in five people turning 65 today will need long-term care for longer than 5 years, and at the costs above, savings drain fast. Plan for how long the money lasts, not just whether it covers the first month.

Long-Term Care Insurance

If your loved one bought a long-term care policy years ago, this is when it pays off. These policies cover long-term care, including custodial care, at home, in the community, or in a facility, up to a daily or monthly benefit and a lifetime maximum. A policy pays only after a benefit trigger, set by the insurer's own assessment, and an elimination period of often 30, 60, or 90 days that the family covers. Dig out the policy now and read the benefit triggers, daily maximum, and elimination period before you need it. New policies are priced by age at purchase, and most individual policies require medical underwriting, so someone in poor health or already receiving long-term care may not qualify. The federal consumer resource at longtermcare.acl.gov explains how these policies work.

Reverse Mortgages

For homeowners 62 and older, a reverse mortgage converts home equity into cash with no monthly mortgage payment. The federally insured version is the Home Equity Conversion Mortgage (HECM). The payouts can supplement income for care at home, but it isn't free money: the balance grows each month, the borrower must keep paying property taxes and insurance and keep the house in repair, and the loan comes due when the last surviving borrower or Eligible Non-Borrowing Spouse dies, sells the home, or no longer lives there as a principal residence. A move to a nursing home or assisted living for more than 12 consecutive months, with no co-borrower at home, also means anyone else living there must move out unless they can repay the loan or qualify as an Eligible Non-Borrowing Spouse.

Life Insurance

An existing life insurance policy can sometimes fund care. Some policies include an accelerated death benefit that pays part of the death benefit early. Whether it is available depends on the policy, so ask the agent or insurer: some older policies don't offer it, and a policyholder is usually eligible only if the option was added before the insured became terminally ill, so don't count on adding it once care is needed. Others can be sold to a third-party investor through a life settlement for a lump sum that is generally more than the cash surrender value but less than the death benefit, usually only for women about 74 and older and men about 70 and older. Any of these moves can affect Medicaid and SSI eligibility, so check the policy terms and the tax and benefit consequences before acting.

Frequently Asked Questions

Does Medicare pay for assisted living or a nursing home?

Not for long-term care. Medicare covers up to 100 days of skilled nursing facility care per benefit period after a qualifying hospital stay. It also covers home health care for homebound people who need intermittent skilled care. It does not pay for custodial care, ongoing help with daily activities when that's the only care needed, whether at home, in assisted living, or in a nursing home. For that, you need Medicaid, VA benefits, long-term care insurance, or private pay.

What if my parent's income is too high for Medicaid?

Being over the income limit doesn't automatically end the conversation, but which fix applies depends on the state. In "income-cap" states, which cover the special income level group but don't make Medicaid available for nursing facility services through the medically needy pathway, a Qualified Income Trust (also called a Miller Trust) can be the route. The trust may hold only the person's income, and when they die the state receives what's left, up to what Medicaid paid for their care. In a state that does cover nursing facility services through the medically needy pathway, a Miller Trust is not the route to eligibility; see our spend-down explainer instead. An elder law attorney can tell you what applies in your state.

Can one person use more than one payer at the same time?

Yes. Medicare can cover a short skilled-nursing rehab stay while the family lines up longer-term funding, and when Medicare stops, Medicaid, long-term care insurance, VA benefits, or private pay can take over. Someone private-paying today may apply for Medicaid later as savings run down. Each payer counts the others differently, though: VA pension, for example, is reduced by the person's countable income.

How do I protect the house and savings if Medicaid is likely?

Legally, through planning done well before the 5-year look-back window closes. Spousal protections and the look-back's own exemptions, such as transfers to a spouse or to a trust solely for a blind or disabled child, are lawful ways to keep assets. The mistake to avoid is gifting money or transferring the house inside the look-back without checking whether an exemption applies, which can create a penalty period. Talk to an elder law attorney before moving any large sum.

Will the state take the house after my parent dies?

Possibly, through Medicaid estate recovery. Federal law requires states to seek recovery from the estates of people who received Medicaid at 55 or older, for nursing home and home- and community-based care, but only after a surviving spouse has died and only when there's no surviving child under 21 or blind or permanently and totally disabled. States must also offer an undue-hardship waiver. Our estate recovery guide walks through how it works and what's protected.

Next Steps: How to Pay for Senior Care

Work it in this order:

1
Step 1

Price the care

Figure out what level of care your loved one needs now and what it costs in your area. Start from the national medians above, then adjust for your state and metro.

2
Step 2

Check Medicaid

Look at income, assets, and spousal protections. Medicaid pays the largest share of long-term care, so run the numbers early.

3
Step 3

Check VA eligibility

If your loved one is a wartime veteran or surviving spouse, Aid and Attendance may add a monthly payment on top of a VA pension.

4
Step 4

Inventory private resources

Pull together savings, an old long-term care policy, home equity, and any life insurance that might fund care.

5
Step 5

Get help mapping it

An elder-law attorney or a care advisor can tell you how the pieces fit for your family before you commit any large sum.

Your state changes the details: limits, waitlists, and which programs exist. Read your state's guide for the specifics.

Paying for Senior Care in Your State

The five payers above are national, but what your family actually pays comes down to where your loved one lives. States run their own Medicaid programs, keep their own waiting lists, and tax retirement income and property differently, so the same five payers add up differently from one state to the next. Your state guide walks through how they fit together locally.

Pick your state for a full walkthrough of how to pay for senior care there, including the state programs and local cost realities that shape the bill.

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Learn More

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Find personalized help figuring out how to pay for senior care at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.

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Expert eldercare guidance from Brevy's team of healthcare professionals and researchers.