How families pay for senior care: Medicare, Medicaid, PACE, VA benefits and caregiver support
This guide is general educational information, not medical, legal, or financial advice. Talk with your own attorney, financial advisor, or care professional about your situation. Elder Living Guide provides education and referrals; we are not a care provider, facility, agency, or medical practice.
Short answer: Medicare doesn’t pay for long-term care, the everyday help with bathing, dressing, meals and getting around that most assisted living and home care provides. It does pay, for a limited time, for skilled care after a hospital stay, for part-time skilled care at home, and for hospice. Most families pay for everyday help themselves at first, sometimes with long-term care insurance. Medicaid is the main public payer once income and assets are low enough under your state’s rules, and PACE, VA benefits and caregiver programs can fill specific gaps.
This is an orientation to official programs, not eligibility advice. Every program statement links to the government page it came from. We don’t repeat state income or asset limits, because they differ by state and change; check the linked pages for current figures. This guide is the money step of our senior care planning guide.
Who may pay for which kind of care
Start with the kind of care your family member needs, then read across. “May” means it depends on eligibility, your state, or the policy; nothing in this table is a promise of coverage.
| Kind of care | Medicare | Medicaid | Other payers to check |
|---|---|---|---|
| Short-term rehab or skilled nursing in a nursing home after a hospital stay | Part A may cover up to 100 days per benefit period if strict conditions are met (details below) | May help if eligible | Medicare Advantage plan rules; VA benefits |
| Long-term nursing home stay for everyday help | No, if custodial care is the only care needed | Yes, for people who qualify in their state | Long-term care insurance policy; savings and income |
| Assisted living | No | May cover some parts, depending on the state | Most residents pay themselves; some long-term care insurance policies partly cover it |
| Personal care at home (bathing, dressing, meals) | No, when this is the only care needed | Yes, for people who qualify; covered services vary by state | Savings; long-term care insurance; PACE; VA home respite for enrolled Veterans |
| Part-time skilled nursing or therapy at home | Yes, if homebound and a provider orders it | May help if eligible | Medicare Advantage plan rules |
| Hospice care | Yes, from a Medicare-approved hospice; room and board in a facility is not covered | Ask your state program | Savings and income for room and board |
| A short break for the family caregiver (respite) | Only as inpatient respite within hospice | May help with payment | National Family Caregiver Support Program; VA respite; some long-term care policies (most private health insurance doesn’t) |
The table summarizes the sections below; each row’s sources are linked there, and the respite row also draws on NIA’s respite guide (NIA, what is respite care). The Medicaid and long-term care insurance cells are deliberately cautious, because the answer turns on your state’s program and the exact policy.
What Medicare does and doesn’t pay for
Medicare’s long-term care page is blunt: “Medicare doesn’t pay for long-term care.” It explains that because most long-term care is non-medical, Medicare and most health insurance, including Medigap, don’t pay for long-term care services, whether in a nursing home or in the community (Medicare.gov, long-term care). Part B still covers doctor visits and physical, speech or occupational therapy, even when your family member lives in a nursing home (Medicare.gov, nursing home care).
Three kinds of care are where Medicare does pay, and families often mistake them for long-term care coverage:
Skilled nursing facility care after a hospital stay
According to Medicare’s skilled nursing facility page, Part A covers this care only if your family member has a qualifying inpatient hospital stay of at least 3 days in a row, not counting the day they leave. Time spent under observation or in the emergency room before being admitted doesn’t count, even overnight. They generally need to enter the facility within 30 days of leaving the hospital, and a doctor or other provider must decide they need daily skilled care, such as intravenous medications or physical therapy (Medicare.gov, skilled nursing facility care).
In 2026, Medicare lists these costs for each benefit period: $0 a day for days 1–20 after the $1,736 Part A deductible, $217 a day for days 21–100, and all costs from day 101. Part A covers at most 100 days per benefit period. Medicare Advantage plans may charge copayments during the first 20 days and may waive the 3-day rule, so check the plan (Medicare.gov).
Our tip: during any hospital stay, ask whether your parent is admitted as an inpatient or held “under observation,” and write the answer down. It decides whether the 3-day rule is met.
Home health care
Medicare covers part-time or intermittent skilled nursing and therapy at home if your family member is “homebound” and a doctor or other provider has seen them in person and ordered the care from a Medicare-certified home health agency. Medicare says you pay nothing for covered home health services, and 20% of the Medicare-approved amount for covered medical equipment after the Part B deductible. In most cases, part-time or intermittent means up to 8 hours a day of skilled nursing and home health aide services combined, and no more than 28 hours a week. Medicare doesn’t pay for 24-hour care at home, meal delivery, homemaker services, or personal care when that is the only care needed (Medicare.gov, home health services).
Hospice care
Medicare says you pay nothing for hospice care from a Medicare-approved hospice provider, apart from a copayment of up to $5 per prescription for pain and symptom drugs and possibly 5% of the Medicare-approved amount for inpatient respite care. It does not cover room and board if your family member gets hospice care at home or lives in a nursing home or hospice inpatient facility, unless the hospice team arranges short-term inpatient or respite care (Medicare.gov, hospice care).
Free Medicare help: your local State Health Insurance Assistance Program (SHIP) offers one-on-one Medicare counseling at no cost, including comparing plans and reviewing coverage (SHIP, shiphelp.org). SHIP counselors cover Medicare questions; ask your state Medicaid office about Medicaid.
Private pay first
The National Institute on Aging says most people pay the full costs of assisted living themselves, and that it tends to cost more than living independently but less than a nursing home. In many cases, people also pay for nursing home care themselves. Continuing care retirement communities usually charge a one-time entrance fee and a monthly fee after that (NIA, long-term care facilities).
Before you sign anything, two of our guides help: our private-pay care budget lays income and costs side by side so you can see how long savings may last, and comparing assisted living fees turns each community’s quote into numbers you can line up. If the family is still choosing a setting, see types of senior care compared.
Long-term care insurance, if a policy exists
NIA notes that a long-term care insurance policy may include some coverage for nursing home care, and that assisted living is partly covered by some policies; check with the insurance company for details (NIA). Find the policy before you choose a setting, because what counts as a covered setting and when benefits start are set by the policy itself. Take our long-term care insurance questions to the insurer and get the answers in writing.
Medicaid long-term care: check your own state
LongTermCare.gov, from the federal Administration for Community Living, explains that Medicaid is a joint federal and state program for people with low income and assets. Unlike Medicare, it does pay for custodial care in nursing homes and at home, including personal care. States have considerable leeway in how they run their programs, so eligibility rules and covered services vary from state to state (LongTermCare.gov, Medicaid).
Qualifying happens in two steps. First, income and assets must fall within your state’s levels. Then the state decides whether your family member needs enough help with personal care to qualify for nursing home care or home and community-based services. LongTermCare.gov says your State Medical Assistance office is the best source for how this works in your state. You can find it through Medicaid.gov’s list of state Medicaid agencies.
Three rules surprise many families (LongTermCare.gov, Medicaid eligibility; LongTermCare.gov, estate recovery):
- The home. A principal residence isn’t counted as an asset for eligibility, but if your family member’s equity in the home is above a set limit, Medicaid can’t pay for their nursing home care or home and community-based waiver services. States can choose a higher limit, and the limit is adjusted each year. It doesn’t apply if a spouse, or a child who is under 21, blind, or a person with a disability, lives in the home.
- A spouse at home. When one spouse needs nursing home care and the other still lives in the community, spousal impoverishment rules let the spouse at home keep more of the couple’s assets, and possibly some income.
- Estate recovery. If someone gets Medicaid long-term care services, federal law requires the state to recover what Medicaid spent on their behalf from their estate after they die. It applies to people who were permanently institutionalized or age 55 and older when they got the services. Estates are exempt while a spouse is still alive (the state may recover after the spouse dies), and heirs can ask for a hardship waiver.
Because these rules interact with your state’s program, read them as reasons to ask questions early, not as a plan. See when to get professional advice.
PACE
Medicare describes the Program of All-inclusive Care for the Elderly (PACE) as a Medicare and/or Medicaid program, available in some states, that helps older adults who need a nursing home level of care get coordinated care in the community instead. A PACE team coordinates services that may include adult day primary care, home care, personal care, prescription drugs, and transportation to the PACE center and medical appointments (Medicare.gov, PACE).
To join, a person must be at least 55, live in a PACE organization’s service area, need a nursing home level of care as certified by the state, and be able to live safely in the community with PACE’s help. People with Medicaid pay no monthly PACE premium. People with Medicare but not Medicaid pay a monthly premium for the long-term care part plus a Part D premium. Either way, there is no deductible or copayment for care the PACE team approves. Joining a separate Medicare drug plan ends PACE enrollment, so check before changing drug coverage.
VA benefits for Veterans and survivors
VA Aid and Attendance or Housebound benefits add monthly payments to a VA pension for qualified Veterans and survivors. A person who gets a VA pension may qualify for Aid and Attendance if, for example, they need another person’s help with daily activities like bathing, feeding and dressing, or they are in a nursing home because of lost mental or physical abilities related to a disability. A person can’t get both benefits at the same time. You can apply online, by mail with VA Form 21-2680, or in person; someone in a nursing home also needs VA Form 21-0779 (VA, Aid and Attendance and Housebound).
VA Respite Care pays for short-term care so a family caregiver can take a break: either a person who comes to the Veteran’s home or adult day health care, or a short nursing home stay. Enrolled Veterans are eligible if they meet the clinical criteria and the service is available, and a copay may apply based on service-connected disability status and finances; a VA social worker or case manager can help you complete VA Form 10-10EC to learn the copay amount (VA, Respite Care). VA also runs a Caregiver Support Program for the people who care for Veterans.
Support for family caregivers
The federal National Family Caregiver Support Program funds five types of services for family caregivers: information about available services, help getting access to them, counseling, support groups and training, respite care, and supplemental services on a limited basis. It serves adult family members and other informal caregivers of people 60 and older, among other groups (ACL, National Family Caregiver Support Program). What is offered varies by place, so ask your local Area Agency on Aging; the federal Eldercare Locator finds local help when you enter a location. Our respite care guide covers planning a break.
List every possible payer on one sheet
Families often learn about one program at a time, months apart. One sheet keeps every source in view and shows who still needs a call.
Free download: Senior care payment sources checklist (CSV). It opens in Excel, Google Sheets, or Numbers. Each row is one possible payer with the official page to check; the other columns are blank for you to fill in: whether it applies, what it might cover, who you asked, the date, whether you have it in writing, and the next step. The sheet is our own organizing tool, not an eligibility test.
A made-up example: when Medicare days run out
This example is invented. The people are made-up, and it only shows how the rules above fit together.
Ruth, 84, spends four days in the hospital as an admitted inpatient after a fall, then moves to a Medicare-certified skilled nursing facility for rehab. Because she had a qualifying inpatient stay and needs daily therapy, Part A covers her stay, and her family writes down the day count. In week four the therapy team says she no longer needs daily skilled care. From then on, staying is custodial care, which Medicare doesn’t pay for.
Her son fills in the payment sources sheet that night. Ruth has no long-term care policy. Her late husband was a Veteran, so the family reads VA’s Aid and Attendance page about survivors. They book a free SHIP appointment to ask about her Medicare Advantage plan, call the state Medicaid office to ask how long-term care eligibility and the home rules work there, and run our private-pay budget for the months in between. The decision they still have to make, home with help or assisted living, goes on the agenda for a family meeting.
Who to call first
- In the hospital or a rehab stay now: ask the discharge planner whether your family member is an inpatient or under observation, and what Medicare will cover after discharge. Our planning guide has a section on what to do after a hospital stay.
- Paying privately now and it is working: keep a budget and revisit it when needs change.
- Private pay is running out, or care needs are rising: search the Eldercare Locator for your local aging services, and contact your state Medicaid agency about long-term care eligibility.
- Confused by Medicare or a Medicare Advantage plan: book free counseling with your local SHIP.
- Your family member is a Veteran or a Veteran’s surviving spouse: read VA’s Aid and Attendance page before you apply.
- The caregiver needs a break: ask local aging services about caregiver support and respite.
LongTermCare.gov has more on planning for long-term care.
When to get professional advice
Before moving assets, making large gifts, adding someone to a deed, or applying for Medicaid or VA benefits on someone else’s behalf, talk with a qualified professional, such as an elder law attorney or a benefits counselor. Asset rules, home rules and estate recovery depend on your state, so get advice before acting, not after. We don’t recommend specific firms.
How this page is made
Carter Hockinson, editor, checked this guide against official sources: Medicare.gov (long-term care, nursing home care, skilled nursing facility care, home health services, hospice care and PACE), LongTermCare.gov from the Administration for Community Living (Medicaid, Medicaid eligibility and estate recovery), the National Institute on Aging (long-term care facilities and respite care), VA (Aid and Attendance and Respite Care), the ACL National Family Caregiver Support Program and Eldercare Locator, and the SHIP technical assistance site (shiphelp.org). Those pages were checked on October 18, 2026, and re-checked on October 19, 2026. Medicaid.gov didn’t load for us on October 18, so this page links to its state agency list for navigation but doesn’t rely on it for any rule. The 2026 Medicare dollar amounts are copied from Medicare.gov and change every year. The table, the inpatient-or-observation tip, the payment sources sheet, and the call list are our own ways of organizing the official information. The example uses invented people.
Elder Living Guide provides education and referrals. We are not a care provider, facility, agency, or medical practice. Questions: snlepore@gmail.com. Read how our guides and contact requests work.