Paying for Nursing Home Care Without Going Broke

Nursing home costs keep climbing, making long-term care a major financial challenge for many families. Private insurance usually doesn’t cover it, and while long-term care insurance exists, it’s expensive and often falls short. That leaves Medicaid as the primary way to pay for nursing home care — but qualifying can mean spending down most of your assets first.

The odds of needing long-term care are high. About 70% of people who turn 65 today will need some form of care, and 40% will spend time in a nursing home. Women and older adults are the most likely to need care, but younger adults are entering nursing homes in growing numbers due to Medicaid expansion.

The good news? With the right planning, it’s possible to qualify for Medicaid without losing everything. There are several strategies to protect assets, like Medicaid-compliant annuities that turn countable assets into income, or Medicaid asset protection trusts that transfer assets while keeping them out of Medicaid’s calculations. Some states allow promissory notes, which convert assets into loans with structured repayments. Life estates let parents transfer home ownership while still living there. Other smart spend-down strategies include paying off debt, making home improvements, or prepaying funeral expenses—all of which reduce assets while benefiting the family.

Because Medicaid rules vary by state, working with an elder law attorney can help create a plan that protects assets and ensures eligibility when the time comes. Planning ahead can make all the difference in keeping your loved one’s financial future secure.

Read more: Protecting Your Parents' Assets From Nursing Home Costs