Paying for senior living
Most people pay for senior living and long-term care with a combination of personal funds, government programs such as Medicaid and veterans’ benefits, and private financing such as long-term care insurance.[1] Medicare and most health insurance, including Medigap, do not pay for long-term custodial care, which is why planning ahead matters.[2]
Payment sources compared
| Source | What it can pay for | Key limits |
|---|---|---|
| Personal funds | Any setting | Savings, pensions, investment income or home-sale proceeds can be depleted[1] |
| Medicare | Short-term skilled nursing, home health, hospice | No long-term custodial care; SNF coverage capped at 100 days per benefit period[2][3] |
| Medicaid / Medi-Cal | Nursing homes; home and community-based services; some assisted living services | Income and asset rules; Medicaid does not pay assisted living room and board[4][5][6] |
| Long-term care insurance | Personal and custodial care at home, in the community or in a facility | Daily and lifetime maximums; medical underwriting[7] |
| VA pension with Aid and Attendance | Added monthly payment for qualifying veterans and survivors | Income and net-worth limits ($163,699 net worth limit through Nov. 30, 2026)[8][9] |
| Home equity and life insurance | Cash for any care | Reverse mortgages and life settlements carry costs and tax effects[1] |
Personal funds
According to NIA, many older adults pay for part or all of long-term care out of pocket using savings, a pension or other retirement fund, investment income or proceeds from the sale of a home. Family and friends often provide care for free at first, but paid services may be needed as needs increase.[1]
Long-term care insurance
Long-term care insurance is designed to cover long-term services and supports, including personal and custodial care at home, in a community organization or in a facility. Policies reimburse a daily amount up to a pre-selected limit, and the premium depends on age at purchase, the daily maximum, the number of years covered and optional benefits such as inflation protection.[7] Most individual policies require medical underwriting, so people in poor health or already receiving care may not qualify. Many policies pay for two to five years; very few have no limits.[7]
Home equity, life insurance and annuities
NIA lists reverse mortgages, life insurance with accelerated death benefits, life settlements, annuities and trusts as private financing options, and recommends talking with an expert because these can affect taxes and inheritance. Life settlements are usually available only to women 74 and older and men 70 and older.[1]
How long care lasts
LongTermCare.gov estimates that people turning 65 have almost a 70% chance of needing long-term care, that women need care longer (3.7 years) than men (2.2 years), and that 20% will need it for longer than five years.[10] The 2025 U.S. median cost of a private nursing home room was $129,575 per year.[11]
Free help with benefits
The Eldercare Locator (1-800-677-1116) connects families with local agencies that can explain payment options.[12][1] In San Diego County, call Aging & Independence Services at 800-339-4661.[13]
Frequently asked questions
Does Medicare pay for assisted living?
No. Medicare does not pay for assisted living or other long-term custodial care.[4][2]
What does long-term care insurance cover?
Long-term care insurance covers personal and custodial care in settings such as the home, a community organization or a facility, reimbursing a daily amount up to a policy limit.[7]
Can I use my home to pay for senior living?
Yes. NIA lists home-sale proceeds and reverse mortgages among ways people pay for long-term care, and advises talking with an expert before taking a reverse mortgage.[1]
See also
References
Web pages accessed September 28, 2026 unless noted. See sources and methodology.
- ^ "Paying for Long-Term Care". National Institute on Aging (NIH).
- ^ "Long-term care (coverage page)". Medicare.gov, Centers for Medicare & Medicaid Services.
- ^ "Skilled nursing facility care (coverage page; 2026 cost-sharing amounts)". Medicare.gov, Centers for Medicare & Medicaid Services. 2026 amounts.
- ^ "Long-Term Care Facilities: Assisted Living, Nursing Homes, and Other Residential Care". National Institute on Aging (NIH).
- ^ "Assisted Living Facts and Figures". National Center for Assisted Living (NCAL/AHCA).
- ^ "Asset Limit Frequently Asked Questions (Medi-Cal)". California Department of Health Care Services. Limits effective January 1, 2026.
- ^ "What is Long-term Care Insurance?". LongTermCare.gov, Administration for Community Living.
- ^ "VA Aid and Attendance benefits and Housebound allowance". U.S. Department of Veterans Affairs.
- ^ "Current pension rates for Veterans (effective December 1, 2025)". U.S. Department of Veterans Affairs. Rates for Dec. 1, 2025–Nov. 30, 2026.
- ^ "How Much Care Will You Need?". LongTermCare.gov, Administration for Community Living. Page last modified 02/18/2020.
- ^ "Cost of Care Survey 2025: national median costs". CareScout (formerly the Genworth Cost of Care Survey). Survey fielded July–November 2025.
- ^ "Eldercare Locator". Administration for Community Living.
- ^ "About Aging & Independence Services". County of San Diego Health and Human Services Agency.