How to Pay for a Nursing Home

How to pay for nursing home care is usually the first hard question after a hospital stay or a fall. The honest answer is that most families don’t use one payer. They move through several in a predictable order: Medicare for a short rehab stay, then the resident’s own money and any insurance, then Medicaid. Knowing that order early helps you protect a spouse, avoid costly mistakes and keep your parent in the same nursing home.

This guide walks through each payer, what it covers and when it starts and stops, with links to the detailed guides.

How to Pay for Nursing Home Care: The Usual Order

Medicaid.gov describes the path most residents follow:

1. Medicare first, if there was a hospital stay. A person enters a skilled nursing facility after a qualifying hospital stay, and Medicare covers a limited period.
2. Then private pay and insurance. If nursing home care is still needed after Medicare ends, the resident pays privately and uses any long-term care insurance.
3. Then Medicaid. Once the resident’s assets are spent down and they’re eligible, Medicaid pays. If the nursing home is Medicaid certified, the resident can usually stay in the same home.

Veterans’ benefits can come in at any point for those who qualify.

Payer	What it pays for	How long	Main guide
Medicare	Skilled nursing and rehab after a 3-day inpatient stay	Up to 100 days per benefit period; $217 a day from day 21 in 2026	Medicare and nursing homes
Private pay	Everything, at the home’s rate	Until money runs low	This guide
Long-term care insurance	A daily or monthly benefit set by the policy	Until the policy’s benefit runs out	Long-term care insurance
VA	Nursing home care for eligible veterans, State Veterans Homes, Aid and Attendance	Depends on eligibility	VA long-term care
Medicaid	Long-term nursing home care for people who meet state limits	As long as eligibility lasts	Medicaid eligibility

Medicare: The First 100 Days at Most

Medicare doesn’t pay for long-term care. What it covers is a short skilled stay: daily nursing or therapy after at least 3 days in a row as a hospital inpatient. In 2026, Original Medicare pays in full for days 1 to 20 (after the $1,736 Part A deductible, unless already paid for the hospital stay), then your parent owes $217 a day for days 21 to 100. After day 100, or as soon as daily skilled care is no longer needed, Medicare stops.

Two things to do right away:

• Check whether the hospital stay counted. Time “under observation” doesn’t count toward the 3 days. Ask the hospital whether your parent was admitted as an inpatient.
• Plan for day 21 and beyond. A Medigap plan or Medicaid may pay the daily coinsurance. If neither does, it comes from your parent’s income or savings.

The Medicare nursing home guide explains every rule, including the observation-status problem and how benefit periods reset.

Paying Privately: Income, Savings and Home Equity

When Medicare ends and your parent still needs care, the nursing home bills its private rate. ACL’s long-term care site puts it plainly: if you have enough income and savings, you pay for long-term care yourself, from income, savings and possibly the equity in your home.

Ask for the rate in writing. Nursing home prices vary widely by state, city and room type. Before admission, ask the business office for the daily rate for a shared and a private room, and a written list of extra charges. Under Medicaid rules, homes can charge extra for items like a private room that isn’t medically needed, a phone, a TV and personal clothing.

Use income first. Social Security, pensions and annuity payments go toward the monthly bill. Savings and investments make up the difference.

Keep records. Save every bill and receipt. If your parent later applies for Medicaid, the state reviews five years of financial records, and clear records speed up approval.

Know what you’re signing. Federal rules at 42 CFR 483.15 bar a nursing home from requiring a family member to promise payment as a condition of admission. The home can ask someone who manages your parent’s money to sign an agreement to pay from your parent’s funds, without becoming personally liable. Read the admission agreement carefully, and ask about any clause that makes you responsible.

Home Equity and Reverse Mortgages

The home is often a family’s largest asset. If your parent is moving permanently and no spouse lives there, the home may be sold, and the proceeds pay for care until your parent reaches the Medicaid asset limit.

A reverse mortgage is a poor fit for a permanent nursing home move. ACL notes that the borrower must be 62 or older and that the loan comes due when the last borrower dies, sells or permanently moves out. It can make sense when care happens at home, or when a spouse will stay in the house.

Life Insurance and Annuities

ACL’s long-term care site lists several ways to turn a life insurance policy into money for care:

• Accelerated death benefits. Some policies pay part of the death benefit while the insured is alive. For nursing home care, the monthly benefit is typically about 2% of the policy’s face value, usually capped at 50% of the death benefit.
• Combination policies that pair life insurance with long-term care benefits.
• Life settlements and viatical settlements, which sell the policy to a third party. A viatical settlement requires a life expectancy of 2 years or less.

ACL cautions that these options may affect Medicaid eligibility and can leave little or nothing for survivors. Check with your state Medicaid agency first.

Long-Term Care Insurance

If your parent bought a long-term care insurance policy, find it now. Policies usually pay a daily or monthly amount once the insured needs help with daily activities such as bathing and dressing, or has a cognitive impairment such as dementia, often after a waiting period called the elimination period.

Call the insurer as soon as care begins to start a claim, and ask what the policy needs from the nursing home and doctor. In states with long-term care partnership programs, a qualifying policy can also let your parent keep extra assets if Medicaid is needed later. The long-term care insurance guide explains how policies and partnership programs work.

VA Benefits for Veterans and Surviving Spouses

Veterans may qualify for nursing home care through the VA in its own Community Living Centers, in contracted community nursing homes or in State Veterans Homes. CMS lists 122 nursing homes as veterans homes in its data (data from August 2026). Wartime veterans and surviving spouses with limited income may also qualify for a VA pension with Aid and Attendance, which adds money for people who need help with daily activities.

Eligibility depends on service history, disability rating, income and need. The VA long-term care guide explains each program and how to apply.

Medicaid: The Payer for Most Long Stays

When private money runs low, Medicaid pays for long-term nursing home care. Medicaid.gov says nursing facility services are available only when other payment options are unavailable, and that states can’t put people on waiting lists for them. CMS lists 14,151 Medicaid-certified nursing homes (data from August 2026).

The 2026 federal standards most states build on:

Standard	2026 amount
Income cap used by many states	$2,982 a month
Asset limit for one person in most states	$2,000
Assets a spouse at home can keep	$32,532 to $162,660, set by the state
Spouse’s minimum monthly income allowance (from July 1, 2026)	$2,705 in most states

Once your parent qualifies, most of their monthly income still goes to the nursing home. They keep a personal needs allowance, set by each state, such as $75 in Texas, $70 in Georgia and $50 in New York. The rest of the bill is paid by Medicaid.

Some states set very different limits. California’s Medi-Cal asset limit is $130,000 for one person through June 30, 2027, and Illinois uses $17,500. The Medicaid nursing home eligibility guide covers the full rules, and the Medicaid long-term care checker shows your state’s limits.

Spending Down the Right Way

Families often hear the phrase “spend down.” It means using your parent’s money on your parent’s own needs, at fair value, until assets reach the Medicaid limit: the nursing home bill, medical costs and other things your parent needs. Your state Medicaid agency can tell you what it counts.

What it doesn’t mean is giving money away. Medicaid reviews every transfer in the 60 months before the application, and gifts or below-value sales lead to months without coverage. Never hide or move assets to qualify. An elder law attorney can explain what your state allows, especially when a spouse lives at home.

A Plan for the First Two Weeks

When a parent is about to enter a nursing home, these steps cover the money side:

1. Confirm Medicare coverage with the hospital discharge planner and the nursing home, including inpatient status.
2. Choose a home that accepts Medicaid if there’s any chance your parent will need it. Use the nursing home finder, your state page or a state list such as Pennsylvania nursing homes that accept Medicaid.
3. Find every policy and benefit: long-term care insurance, life insurance, pensions, VA eligibility.
4. Get legal authority in place. A durable power of attorney for finances lets you pay bills and apply for benefits. The legal and financial planning guide explains the documents.
5. Gather five years of financial statements in case Medicaid is needed.
6. Ask for help. The Eldercare Locator (1-800-677-1116) connects you with your local Area Agency on Aging, and the state’s Long-Term Care Ombudsman can help with problems at the nursing home. The residents’ rights guide explains how.

If your parent might do better at home or in assisted living, compare the costs and payers in the Medicaid waivers guide and the assisted living vs nursing home guide. The nursing home comparison tool helps you weigh quality alongside cost.

Frequently Asked Questions

Can I Use My Parent's Social Security to Pay the Nursing Home?

Yes, if you have the legal authority to manage your parent's money, such as a power of attorney, you use it for your parent's care and bills. Once your parent is on Medicaid, most of that income goes to the nursing home each month, minus a personal needs allowance and any allowance for a spouse at home.

Will Selling the House Affect Medicaid?

Usually. Money from selling the home becomes a countable asset, so it typically pays for care until your parent reaches the state's asset limit. Selling a home for less than it's worth can be treated as a transfer and trigger a Medicaid penalty. Talk to an elder law attorney before selling or transferring a parent's home.

Can a Reverse Mortgage Pay for a Nursing Home?

It's rarely a fit for a permanent move. ACL's long-term care site says a reverse mortgage requires the borrower to be 62 or older and comes due when the last borrower dies, sells or permanently moves out of the home. It can help pay for care at home, or for a spouse who stays in the house.

Can the Nursing Home Charge Extra Once My Parent Is on Medicaid?

Only within limits. Under 42 CFR 483.15, once a resident becomes eligible for Medicaid, the home may charge only what Medicaid allows, and it can't ask for gifts or donations as a condition of admission or of staying. It may charge for extra items your parent asks for that Medicaid doesn't include, such as a private room that isn't medically needed, after giving notice of the cost.

What if My Parent Runs Out of Money in a Home That Doesn't Take Medicaid?

Medicaid.gov says a resident in a home that isn't Medicaid certified would have to move to a certified nursing facility to use Medicaid. Before admission, ask whether the home participates in Medicaid. The nursing home finder shows each home's Medicaid status from CMS.

Does Long-Term Care Insurance Pay Right Away?

Not usually. Most policies have an elimination period, a waiting period before benefits start, and require that your parent need help with daily activities or have a cognitive impairment. Call the insurer as soon as care starts to open a claim.

More on Paying for Care

• Medicare and Nursing HomesSkilled nursing facility coverage, the 3-day stay rule and costs
• Medicaid for Nursing HomesIncome and asset limits, spousal protections and the look-back period
• Medicaid WaiversHome and community-based services waivers by state
• VA Long-Term CareVA nursing home care, state veterans homes and pension benefits
• Long-Term Care InsuranceWhat policies cover, partnership programs and alternatives
• Memory CareSecured dementia care in assisted living and nursing homes, state rules and how to pay

This guide explains long-term care in plain language from official sources. It isn't medical, legal or financial advice; a doctor, your state Medicaid agency or an elder law attorney can advise on your situation.

Sources

1. Medicaid.gov: Nursing facilities
2. Medicare.gov: Skilled nursing facility care
3. Medicare.gov: Long-term care
4. ACL: Paying privately for long-term care
5. ACL: Reverse mortgages
6. ACL: Using life insurance to pay for long-term care
7. eCFR: 42 CFR 483.15, admission, transfer and discharge rights
8. Medicaid.gov: 2026 SSI and spousal impoverishment standards