What Nursing Homes Actually Cost (And How to Pay for It)

Let's skip the corporate speak and talk real numbers.

Nursing homes are expensive as hell. Most families can't afford them for long. And the rules around who pays (Medicare? Medicaid? You?) are confusing on purpose.

So here's the straight talk on what things really cost and how people actually pay for it.

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The Real Numbers

The average nursing home costs $8,000 to $12,000 per month. That's $96,000 to $144,000 a year.

In expensive areas (California, New York, Massachusetts), you're looking at $12,000 to $15,000+ per month. In cheaper states (Texas, Alabama, Mississippi), it might be $6,000 to $8,000.

What affects the price:

- Location: Cities cost way more than rural areas

- Room type: Private rooms cost $1,000-$3,000 more per month than semi-private (shared)

- Level of care: Memory care units cost more than standard care

- Facility quality: 5-star facilities charge premium rates

Translation: Unless you're wealthy, you're probably going to run out of money eventually.

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What Medicare Covers (Spoiler: Not Much)

Here's the #1 misconception: Medicare does NOT cover long-term nursing home care.

Medicare only covers short-term rehab stays—meaning you're recovering from a hospital stay and need physical therapy or medical monitoring.

Medicare will pay IF:

You were in the hospital for at least 3 days

You enter the nursing home within 30 days of discharge

You need skilled nursing care or therapy

You're making progress (getting better)

What Medicare covers:

- Days 1-20: 100% covered (you pay $0)

- Days 21-100: You pay a copay (~$200/day in 2024)

- After day 100: Medicare stops. You're on your own.

What Medicare does NOT cover:

Long-term care (living there permanently)

Custodial care (help with bathing, dressing, eating) if that's all you need

Private rooms (unless medically necessary)

If your loved one isn't improving or doesn't need skilled care anymore, Medicare cuts them off—even if they still can't go home.

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What Medicaid Covers (The Real Safety Net)

Medicaid is how about 60% of nursing home residents pay once their money runs out.

Unlike Medicare, Medicaid covers long-term care. But you have to qualify.

To qualify for Medicaid:

- Your income must be below your state's limit (varies, but usually around $2,800/month)

- Your assets must be under ~$2,000 (your home, car, and personal belongings usually don't count)

You must need nursing home-level care (a doctor has to certify this)

What Medicaid covers:

Room and board

Nursing care

Medications (most)

Therapy

Medical supplies

The catch:

Not all nursing homes accept Medicaid. Some don't take it at all. Others only accept it after you've paid privately for 6 months to 2 years.

Medicaid beds may have a waiting list.

You have to "spend down" your assets to qualify—meaning you use up your savings first.

How most people do it:

Pay privately until money runs out

Apply for Medicaid

Transition to Medicaid once approved

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Spending Down: What It Means

"Spending down" means using up your money and assets to get below the $2,000 limit so you can qualify for Medicaid.

What you CAN'T do:

Give away money or property (Medicaid has a 5-year "look-back" rule—if you gave stuff away in the last 5 years, they'll penalize you)

Hide assets

Transfer money to kids to "save it"

What you CAN do:

Pay off debts

Pay for funeral expenses in advance

Make home repairs or modifications

Buy a car (if you don't have one)

Spend money on care

Get legal help. An elder law attorney can help you navigate this without screwing it up. Medicaid rules are state-specific and complicated.

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Long-Term Care Insurance (If You Have It)

If you bought long-term care insurance years ago (usually in your 50s or 60s), congratulations—you're ahead of the game.

What to check:

- Daily benefit: How much the policy pays per day (e.g., $150/day)

- Waiting period: How long before benefits kick in (usually 90 days)

- Lifetime maximum: Total amount the policy will pay (e.g., $200,000)

- What's covered: Some policies only cover certain types of care

Pro tips:

File your claim ASAP. Insurance companies take forever to process claims.

If the nursing home costs more than your daily benefit, you pay the difference out-of-pocket.

Most policies eventually run out. Then you're back to private pay or Medicaid.

If you don't have long-term care insurance:

It's probably too late (and too expensive) to buy it now. Focus on Medicaid planning instead.

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Veterans Benefits

If your loved one is a veteran (or their surviving spouse), they may qualify for VA Aid and Attendance—an extra $1,200 to $2,500 per month to help pay for care.

Who qualifies:

Wartime veterans (or widow/widower)

Meet income and asset limits

Need help with daily activities (bathing, dressing, eating, etc.)

How to apply:

Through the VA (be prepared to wait 6-12 months for approval)

Hire a VA-accredited attorney or agent to help with paperwork

The VA also runs its own nursing homes (Community Living Centers). They're free for eligible veterans but often have long waiting lists.

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Private Pay: How Long Will Your Money Last?

If you're paying out-of-pocket, here's the brutal math:

- $100,000 in savings = ~10 months at $10,000/month

- $250,000 in savings = ~2 years

- $500,000 in savings = ~4 years

Most people run out of money within 1-3 years and transition to Medicaid.

What you can use to pay:

Savings accounts

Retirement accounts (IRAs, 401(k)s)

Pensions

Social Security

Investment accounts

Home equity (if you sell the house)

Talk to a financial advisor about tax implications of withdrawing from retirement accounts.

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Protecting Your Spouse

If you're married and one spouse needs nursing home care, Medicaid has protections for the spouse at home (called the "community spouse").

What the at-home spouse can keep:

The house

One car

About half of joint savings (up to ~$150,000, varies by state)

Income (enough to live on)

Without these protections, couples would have to impoverish both spouses to qualify for Medicaid. The rules prevent that.

Get legal help. An elder law attorney can maximize what the at-home spouse keeps.

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The Bottom Line

Paying for nursing home care is complicated and expensive. Most families eventually need Medicaid.

What to do:

1. Start planning early. Don't wait until there's a crisis.

2. Talk to an elder law attorney. They can help you navigate Medicaid, protect assets, and avoid penalties.

3. Read the contract carefully. Understand what's included, what costs extra, and what happens if you run out of money.

4. Ask about Medicaid acceptance upfront. Make sure the facility accepts Medicaid if you think you'll need it eventually.

Nobody wants to talk about money when their loved one needs care. But ignoring the financial reality doesn't make it go away—it just makes it a crisis later.

Plan now. Get help. Protect yourself.