Who Pays for What: The Hard Truths

The 5 payment sources for long-term care

1. Medicare: Pays ONLY for acute medical recovery and short-term skilled rehab (at most 100 daysMaximum days of skilled nursing facility care Medicare covers per benefit periodAs of September 28, 2026.Only after a qualifying inpatient hospital stay, and only while daily skilled care is needed. Medicare does not pay for long-term custodial care.Source: Medicare.gov: Skilled nursing facility care per benefit period). Medicare never pays for custodial nursing home care or assisted living rent.
2. Private money: Savings, pensions and sometimes the sale of a home usually pay for care first.

3. Medicaid: The primary payer of nursing home care in the US. It has strict income and asset limits that differ by state, with special protections for a spouse who stays at home.

   • The look-back: gifts or transfers made in the 60 monthsMedicaid look-back period for long-term careAs of September 28, 2026.Federal rule for nursing home Medicaid. A few states apply it differently (for example California). Check your state.Source: 42 U.S.C. § 1396p(c)(1)(B) (Cornell LII) before applying can cause a penalty period when Medicaid will not pay.
   • Estate Recovery (MERP): After the recipient dies, the state files a claim against their estate (including the family home) to recoup costs paid.
4. VA pension with Aid and Attendance: for wartime veterans (and some surviving spouses) who need help with daily activities. The maximum for a veteran with no dependents is $29,093 per yearVA pension with Aid and Attendance, veteran with no dependents (maximum per year)As of December 1, 2025.This is the maximum annual pension rate. The actual payment is reduced by countable income.Source: VA: Veterans Pension rates, reduced by countable income.
5. Long-Term Care Insurance (LTCI): Traditional or hybrid life/LTCI policies pay a daily or monthly benefit once a doctor certifies need for help with 2 ADLs or cognitive impairment.