Personal savings, government programs, and private insurance options can all help pay for nursing home care. Families may also use income, retirement accounts, home equity, and life insurance benefits to manage costs. The resources you use to pay for a nursing home depend on your loved one's health needs, required level of care, and their eligibility for assistance.

 

Nursing homes give round-the-clock personal and medical care when independent living, assisted living, or a retirement home isn't an option due to clinical needs. But who pays for nursing home care?

Nursing home care can be expensive — an estimated median cost of $9,555/month for a semi-private room or $10,965/month for a private room in 2025, according to CareScout's Cost of Care survey. 

However, there are several ways to reduce out-of-pocket expenses, including through personal savings accounts, private insurance, and government programs like Medicare and Medicaid. Explore this guide to learn how to pay for nursing home care and compare options.

When researching how to pay for a nursing home stay, consider government assistance programs like Medicare and Medicaid. Each option has different levels of coverage. Here's what you need to know about paying for a nursing home stay.

Medicare covers acute short-term nursing home stays following a hospitalization. This service also covers skilled nursing care if your loved one lives in a nursing home. But it won't pay for help with activities of daily living (ADLs), like moving around or bathing, which many people in long-term nursing home settings need. 

Medicare benefits that can help pay for nursing home-related care include:

• Part A: This is Medicare's hospital insurance that covers skilled nursing care, medically necessary therapies, and medical supplies and equipment. Part A also covers drugs for acute care.
• Part B: Medicare Part B pays for medically necessary services and equipment your loved one may need in a nursing home, like diagnostic tests or a wheelchair. 
• Medicare Advantage (Part C): Private insurance companies manage Medicare Advantage plans, which bundle Part A and Part B benefits. They sometimes include additional services, like vision and hearing screenings and treatments. Medicare Advantage also covers prescription drugs through Part D, and acute care through Medigap plans.
• Part D: Part D pays for prescriptions administered in a nursing home if your skilled nursing stay is not acute. Like Part C, Part D is privately managed.

Medicaid is available to seniors who meet financial eligibility requirements. This program often fills a gap when Medicare stops, such as covering the costs of long-term nursing home stays. If you're wondering how to get Medicaid to pay for a nursing home, you should know that Medicaid will only cover services in state-licensed facilities. 

Facilities must also include services like rehabilitation, social services, room and bed maintenance, dietary services, and personal care. Your loved one may need to complete an assessment to determine whether they qualify for long-term nursing home care reimbursable by Medicaid.

Assisted living benefits are available to eligible veterans, but your veterans' benefits could also cover most nursing home care. The U.S. Department of Veterans Affairs (VA) requires veterans to enroll in VA health care to get these benefits. The VA must also agree that your loved one's care is medically necessary.  Besides medical care, VA benefits may pay for help with ADLs, pain management, and physical therapy. 

Social Security benefits can help cover costs related to a stay in a nursing home or memory care facility but may not cover the full cost of care. Monthly costs for a nursing home can exceed $9,000, but the average Social Security payment is $1,858/month per person.

If your loved one has Medicaid that pays for more than half their nursing home care, Social Security will reduce their benefit to $30/month, plus any personal needs allowance the state offers. Some states are more generous than others.

States offer various assistance programs for seniors who qualify for Medicare or Medicaid and require a nursing home stay, as well as those who qualify based on income. For example, your loved one's state may offer Medicare Savings Programs, which can help reduce their out-of-pocket costs for Medicare premiums, copays, and prescriptions. 

Some states, like Wyoming, also feature prescription donation programs for individuals who lack prescription coverage. Use our state-funded program map to find benefits in your area. 

A senior's income or savings — or their family's — can help offset the cost of a nursing home stay. Many families combine their financial resources to manage expenses, especially when a loved one needs long-term care.

Seniors can draw from retirement accounts, like a 401(k) or IRA, to help pay for nursing home care. A caregiver or family member with power of attorney can also access the senior's retirement account as a source of income. 

Be careful when using retirement benefits, though. If the account is a tax-deferred retirement account, you'll owe tax on any withdrawn amounts. In some cases, you may also incur an extra 10% tax if you withdraw money before the account owner turns 59.5 years old. 

Monthly income from pensions, annuities, or other recurring income sources can help cover nursing home fees in lieu of savings or adequate insurance coverage. Family members can also pitch in each month to help cover costs. 

If your loved one will need to be in a nursing home on a long-term basis, they can consider selling their house to pay for care. Doing so can free up funds each month to apply toward a nursing home stay, along with the lump sum of cash they'll receive from the sale, which they can keep in savings. 

Homes can take some time to sell, though. If your loved one needs to move to a nursing home quickly before the home sells, look into bridge loans and reverse mortgages. These options give short-term funding to cover care costs while the home is on the market.

Savings can help cover costs if you run out of money in a nursing home or need to pay for a service Medicare, Medicaid, or insurance doesn't cover. If you're a caregiver managing a loved one's finances, review savings accounts, like CDs and high-yield options, that could help build savings to cover nursing home expenses. 

Note that if your loved one has Medicaid, they can usually only have up to $2,000 in countable assets, though the exact amount varies by state. If they exceed that limit with their savings or assets, they may be ineligible for Medicaid, which could leave you responsible for nursing home bills.

Different types of private insurance can help pay for medical care. An employer can offer plans, or an individual can purchase insurance from an insurer or through a marketplace. Some seniors may have access to private insurance through a spouse's plan. Seniors in the workforce or those who haven't yet retired may also have private insurance through their jobs.

Does insurance cover nursing home expenses? It can, but it depends on your plan, type of insurance, and level of coverage. Here's what you need to know. 

Private health insurance may cover some nursing home care, but it usually depends on the reason for the stay. Most plans cover short-term rehabilitative services in a nursing home after a hospital stay, such as wound care or physical therapy. They often do not, however, cover long-term custodial care, like help with bathing or eating. 

Review the coverage of your loved one's private health insurance before relying on it to cover a nursing home stay. Some plans may request preauthorizations for services, and there could be deductibles, copays, or coinsurance involved.

Long-term care insurance (LTCI) helps cover the cost of nursing home care. Still, it's only an option if you or your loved one has adequately planned, as they need to buy it while still relatively young and healthy. Many carriers deny coverage based on certain health conditions or age limits. 

If your loved one already has an LTCI plan, their benefits may help them pay for their nursing home stay, including medical services and room and board. Like traditional insurance, every LTCI plan differs, so it's important to review the terms of your loved one's policy to fully understand coverage.

Don't overlook life insurance as you research how to pay for a nursing home if you have no money or your loved one has limited resources. A life insurance policy pays a death benefit to beneficiaries when the insured person passes away. See if you can add a long-term care rider to your life insurance, as long-term care insurance by itself is hard to qualify for at a certain age.

However, some policies include accelerated death benefits, which let the policyholder access a portion of the benefit's payout while they're still living. They can use that money to pay for long-term care, like a nursing home stay. 

If the benefit doesn't cover the full cost of nursing home care, the policyholder may choose a life settlement, which involves selling the policy to a third party for a lump sum payment. 

A nursing home can get especially costly with the ongoing medical, caregiving, and rehabilitative services it offers. Fortunately, there are many options to help you pay for a nursing home stay, including government health insurance coverage, personal savings accounts, and private insurance. 

If you're just getting started learning about each option or need more help, visit our senior living resource hub for additional guidance. 

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