While one-third of older adults may never need long-term care services, many people do need the extra support, including care in a nursing home.
According to the U.S. Department of Health & Human Services’ Administration on Aging, the average 65-year-old has an almost 70% chance of needing some type of long-term care at some point, and 20% will need such care for more than five years.
Many families struggle with decisions about how to pay for long-term care.
“People often don’t think that they’ll need nursing home care, and they assume that Medicare or private health care insurance will cover it,” says Dr. Charles Crecelius, associate professor of internal medicine and geriatrics at Washington University School of Medicine in St. Louis. “This can be a costly mistake.”
Ahead, we explore how much nursing homes cost and how families pay for nursing homes and other types of long-term care options.
[READ: How to Pay for Nursing Homes With Hospice Care]
How Much Does a Nursing Home Cost?
The median national cost of a private room in a nursing home is $10,646 per month, according to Genworth and Carescout’s 2024 Cost of Care Survey. For a semi-private room, the median national monthly cost is $9,277.
The cost of nursing home care also varies by state:
[READ What to Do When Medicare Stops Paying for Skilled Nursing Care]
How to Pay for Nursing Home Care
While nursing homes can be expensive, the good news is there are a number of options for paying for senior care and nursing homes, including:
— Medicaid
— Medicare
— Long-term care insurance
— Federal and state long-term care insurance
— Savings and investments
— Veterans benefits
Medicaid
“The vast majority of people access nursing home care through Medicaid. They’re not paying out of pocket,” says Chris Orestis, a Maine-based senior care advocate and expert in retirement, long-term care and specialty senior living funding solutions. He serves as president of the Retirement Genius consultancy.
Medicaid is the state-administered health insurance program for low-income individuals. It covers more people in nursing homes than other payers. According to 2024 data from KFF, Medicaid was the primary payer for 63% of nursing facility residents.
Compare that to Medicare, which covers only 13% of residents. The remaining 24% of residents had another primary payer, such as private insurance, or were paying out of pocket.
Strict qualification requirements must be met before Medicaid kicks in, such as spending down your assets, and the paperwork can be onerous.
Even if you do qualify for Medicaid, you may be asked to contribute toward the cost of care, depending on how the state determines eligibility and benefits. And it’s worth noting that not all nursing homes accept Medicaid. If you’re relying on Medicaid to pay for care, it’s important to ask upfront whether a facility you’re considering accepts it.
You should also be aware that you’ll have significantly fewer options once you move to Medicaid. At that point, “you become a ward of the state,” Orestis says, meaning that you no longer have control over where you’ll live.
“The state tells you where you go. You don’t get to say, ‘I like that nursing home, and I like that corner private room.’ That’s not for you. When you’re on Medicaid, the state will say, ‘We have an available bed in this facility within your region.’ You’ll go there, and you’ll be sharing a room with one or two other people, and that’s it,” Orestis explains.
A Medicaid lawyer can help you navigate the process of spending down your assets to qualify for Medicaid. Look for one who’s licensed in the same state as the person needing Medicaid assistance.
[READ: How to Pay for Senior Living]
Medicare
Medicare does not cover long-term care housing, but it does cover certain aspects of the care you’d receive in a nursing home, such as rehabilitation.
Medicare covers the first 20 days of care at a skilled nursing facility at 100%. For days 21 to 100, the daily copayment for 2025 is $209.50. Coverage ends after day 100.
To qualify for Medicare coverage for nursing home care, individuals must:
— Live at home (not in a nursing home or other long-term care facility)
— Have their physician approve a plan of care
— Use a Medicare-certified provider
— Need continuous care after a minimum of three days in a hospital
— Use a facility certified by Medicare as a skilled nursing facility
Medicare can also help if a long-term nursing home situation looks inevitable but isn’t immediately necessary. For as long as the individual is able to stay at home, Medicare may pay for up to 35 hours per week for 60 days of home health services, such as:
— Intermittent skilled nursing care
— Speech-language pathology
If you require help with only personal care — meal preparation, bathing, using the bathroom and dressing — you do not qualify for the Medicare home health benefit.
The U.S. News Best Nursing Homes rankings indicate which nursing homes in each state accept Medicare.
Long-term care insurance
Signing up for long-term care insurance before you actually need long-term care is one way to help defray costs if and when you do need that support later in life. Long-term care insurance is used to cover care in settings like a nursing home or an individual’s home in their own community.
However, this option can be pricey. For instance, a 55-year-old man can expect to pay an annual premium of about $1,750 for a $165,000 policy with benefits growing at 2% yearly. The cost for women is higher (because women tend to live longer on average), at $2,855. A couple can expect to spend about $3,875 annually for a combined policy, according to 2025 figures from the American Association for Long-Term Care Insurance.
Of course, the older you are when you purchase a policy, the more expensive it will be. Certain serious medical conditions — such as muscular dystrophy and cystic fibrosis — can also make it difficult, if not impossible, to purchase a policy.
“It’s important to know before you get ill or need long-term care for some other reason what you’re paying for and what to expect,” Crecelius says.
When trying to navigate how to pay for longer-term care or a nursing home stay, you should seek guidance from an insurance expert or financial professional.
In addition, an independent insurance broker — someone who is not affiliated with any particular insurer — can help you find a plan that might work for you. Some insurers, for instance, have started offering hybrid insurance plans that include a long-term care rider within a permanent life insurance plan.
Federal or state insurance programs
State-based Long-Term Care Partnership Programs can help protect the assets of individuals using Medicaid coverage to pay for long-term care services. Most states offer these supplemental programs, such as the Indiana Long-Term Care Insurance Program and the Arizona Long-Term Care System, so you may not have to spend all your resources to qualify for Medicaid.
Savings and investments
If you are fortunate to have savings or investments that you can use to pay for a nursing home out-of-pocket, be sure you understand the pros and cons. There are some complicated tax rules, so it’s best to seek guidance from your accountant or another expert.
If you have an individual retirement account, you can use this money to pay for long-term care. However, you may have to pay taxes on withdrawals.
— Roth IRA. If you have a Roth IRA, you don’t have to pay taxes on any money withdrawn after age 59½ because the money you deposit in this account has already been taxed. Keep in mind, though, that the money must have been in the account for at least five years and you must meet the age requirement. You can also take out contributions you made to this account before 59½ without tax penalties, but you can’t take any of the investment gains.
— Traditional IRA. The rules are different for a traditional IRA, which involves pretaxed money. When you withdraw money from such an account, both the investment and any gains are taxed at your current income tax rate. There’s also a 10% penalty if you withdraw any money before age 59½. However, there are some exceptions to this penalty, and one is unreimbursed medical expenses.
— Other investments. Stocks, property or other items may also be used to pay for long-term care. Again, it’s best to check with an accountant or tax expert before you take any action.
— Savings. If you spend your savings on long-term care, some related expenses may be tax deductible, particularly if you, a spouse or a dependent are in a nursing home for medical reasons, such as treatment for or recovery from an illness. However, the total allowable medical expenses must be reduced by 7.5% of your adjusted gross income in order to quality.
Veterans benefits
The VA Aid and Attendance pension can provide a monthly pension, with 2025 rates of up to $2,358 for a veteran, $1,515 for a surviving spouse and $3,740 for two veterans married to each other and each taking the benefit.
You must meet eligibility requirements to collect these benefits, and they can vary depending on your situation. As with Social Security, the VA pension is dependable and is paid directly to you by the Department of the Treasury.
Navigating the specifics of VA benefits related to long-term care can be challenging. The American Health Care Association suggests going to the VA website for details about general benefits and to the VA Geriatrics and Extended Care page for information about benefits and costs for services in residential settings, such as assisted living communities and nursing homes.
Negotiating Long-Term Care Costs
Most nursing homes won’t lower their rates, but it’s always worth asking if prices can be negotiated.
For example:
— A facility might agree to take a lower private-pay rate instead of an even lower Medicaid rate.
— A facility with vacancies or no waiting list might be willing to negotiate a lower monthly rate to fill a bed.
— A home health agency may agree to a lower hourly or daily rate if they know you’re shopping around for the best price.
Does Your Loved One Actually Need a Nursing Home?
For some people, the concept of long-term senior care conjures images of a nursing home, but if there are signs your aging parent needs senior care, that’s not the only option.
In fact, there are several levels of senior care available, and your loved one may not need the intensive, round-the-clock custodial care they’d get in a nursing home or skilled nursing facility.
Rather, some seniors need help with just a few activities of daily living, and in these cases, an assisted living community may be a better — and less expensive — means of meeting those less intensive needs. Assisted living also typically costs significantly less than a nursing home facility. According to Genworth and CareScout, assisted living costs $5,900 per month on average.
An assisted living community may also be a better option for individuals who do not qualify for long-term care in a nursing home under Medicaid.
Nursing home care can help individuals in certain circumstances, but it can be expensive. There are a variety of ways to pay for it, but in all cases, it’s best to be proactive by planning ahead and consulting with an expert in your area to help you wade through your options and better understand what you can afford.
More from U.S. News
How to Pay for a Nursing Home With No Money
Does Medicaid Pay for Assisted Living? What You Need to Know
Mental Health Resources for Seniors
Nursing Home Costs and How to Pay originally appeared on usnews.com
Update 06/12/25: This story was published at an earlier date and has been updated with new information.
