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  • Michelle Varela

Paying For Senior Living

For most families seeking long-term care for a loved one, cost is a key consideration. As the U.S. population ages, millions of baby boomers will need some type of care and support in the next decade. This means paying for senior care can quickly become a financial burden to seniors and families who may not know their options.

The monthly median cost of senior care can range from $4,500 at an assisted living facility to about $9,034at a nursing home, according to a 2021 Genworth Cost of Care Survey. On the other hand, hiring a visiting home care aide or live-in care can also get expensive. Although millions of family members provide unpaid care to older relatives, when we are talking about professional caregivers, fees can range widely. In home care for about 40 hours a week will cost an average of $4,576 per month.

Planning ahead can better position you to make good choices for your loved one’s care in the future. However, if your aging family member needs care now, there are ways to finance the cost of long-term care through a combination of approaches. Retirement savings, the sale of the family home, private health insurance, veteran's benefits and long-term care insurance are all potential sources of funding to pay for in-home care.

Ways to Pay for Nursing Home Care

A senior may be able to use their existing federal and private benefits to pay for nursing home care.


Medicaid covers 100% of basic nursing home stay costs. The senior must be eligible for Medicaid, however, and eligibility varies by state. Medicare pays for 20 days of a nursing home stay, then 80% of costs for the next 80 days of a stay. Medicare coverage phases out completely after 100 days.

Private health care insurance

Most private health care insurance policies do not cover nursing home care. However, like at-home care, policyholders might be able to secure special coverage through an Employee Assistance Program, or through special programs designed for federal employees, veterans, teachers or healthcare workers.

Long-term care insurance

Seniors, or representatives with power of attorney, can purchase long-term care insurance or a combination permanent life/long-term care insurance policy. These policies should be purchased in advance of a medical emergency.

Veterans Benefits

As a Veteran, you may be able to get long-term care services like assisted living, residential (live-in), or home health care.

Care settings may include Nursing homes, assisted living centers, private homes with caregiver support, day health centers or your own home.

If you are enrolled in VA health care, we cover some long-term care services fall under standard health benefits. You may still need to pay a copay for some covered services.

Assigning benefits rights

A facility can work directly with the insurance providers if an older adult assigns the facility benefits rights. This will relieve the senior and caregivers of dealing with insurance companies or government benefits programs.

Ways to Pay for Home Care

Older adults may be eligible for federal benefits. Alternatively, if they are able to plan, they may be able to secure insurance benefits. These include reverse mortgages, annuities, Medicare, collective sibling agreements; private insurance (covered in the next section) such as life insurance and long term care insurance; and public programs such as Medicaid and Veterans benefits.

Reverse Mortgage

Reverse mortgages were developed by the government specifically for the purpose of helping seniors (originally widows) stay in their homes until the end of their lives. With a reverse mortgage, seniors can use the value of the equity in their home to get cash now, either all at once or in monthly payments. But instead of borrowing a set sum, the loan balance increases over time. A reverse mortgage allows your loved one to stay in the home until she dies, even if by that time the loan balance exceeds the home’s worth. At that point, the home must be sold to repay the loan balance.


Annuities are designed to help seniors turn retirement savings or a pension into a steady, guaranteed income stream that pays out until death or for a set number of years. The money can be used to pay for in-home care or, eventually, for assisted living if necessary. An annuity is like a cross between an investment fund and an insurance policy; the money is invested at a fixed or variable interest rate, and then, after an agreed-upon maturation date, you can begin making withdrawals.


Medicaid coverage of home care varies depending on state. Medicare pays for 21 days of at-home health aide and skilled nursing care, though the workers must operate for less than eight hours a day and less than seven days a week during that period. This does not include homemaking services.

Medicare Advantage Home Care Services

Beginning in 2019, for the first time, Medicare Advantage benefits include non-skilled home care services. These services include benefits such as transportation to doctors’ offices or help shopping for healthier food. Some industry specialists expect that the benefit expansion may include safety improvements at home, including installation of bathroom grab bars, on top of non-skilled help with activities of daily living. The new benefits may not require a physician’s prescription, but they must be designated as medically appropriate by a licensed healthcare provider.

Veterans Benefits

Veteran Aid & Attendance offers families and individuals an additional method of meeting home care costs. A veteran's and their spouse's joint, countable income must be less than the pension amount for which they are eligible. For example, a married veteran in 2021 is eligible for $27,549 in A&A pension; if their countable income is $10,000, then they are eligible to receive an additional $17,549 / year in pension.

Primary Home Care (PHC) Program

The Primary Home Care Program is a non-technical, medically related personal care service provided to adults whose health problems cause them to be functionally limited in performing activities of daily living, according to a statement of medical need. PHC provider agencies also provide Family Care services. This service also is a non-skilled, non-technical service provided to eligible clients who are functionally limited in performing daily activities.

Private health care insurance

Most private health care insurance policies do not cover at-home care, though policyholders might be able to secure special coverage through an Employee Assistance Program, or through special programs designed for federal employees, veterans, teachers or healthcare workers.

Long-term care insurance

The first step in planning for your loved one’s home care needs is to determine if he or she has Long-Term Care Insurance. Since individuals who require non-medical home care are not sick in the traditional sense, traditional health insurance, Medicare and Medicaid do not provide for their needs. Having a Long-Term Care Insurance policy in place prior to any major changes in the health and mobility of your loved one guarantees that they will have complete home care coverage assistance available when they need it.

How to decide which is best for your pocketbook

Making the choice between home care and a nursing home can be difficult to do on your own. Without consulting professionals and performing research in advance, many caregivers are inclined to make a knee jerk decision in the heat of a crisis without consulting the older adult or considering what is best for everyone.

Families may turn to geriatric care specialists to formulate a comprehensive aging plan that is right for them. These experts are generally social workers or licensed nurses and can be found at agencies like

  • Accountable Aging Care Management, a private aging planning company.

  • Family Tree In-Home Care, a private caregiver provider.

  • U.S. Administration on Aging, a government agency that helps families plan senior care.

It may also help to search for an insurance broker or financial advisor with a Certification for Long-Term Care (CLTC), which means they have undergone specific long-term care training. Estate planning expertise may also come in handy when it comes to finances around aging, especially when it comes to legal matters such as granting power of attorney to a trusted person.

By weighing the costs associated with nursing home and home care — and after consulting with experts — you will choose an option that best suits your aging loved one.

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