Who Pays for Senior Living: Medicare, Medicaid, Long-Term Care Insurance, VA Benefits and Private Pay

This page describes what each program says it covers, using its own words where possible. It is not financial or legal advice. Eligibility depends on the person, the state and the program, so confirm the details with the program itself.

Who pays for what, at a glance

Private funds

Private money pays for most senior living. The National Institute on Aging notes that professional care in assisted living facilities and continuing care retirement communities "is almost always paid for out of pocket." Common sources include personal savings, a pension or other retirement fund, investment income and proceeds from selling a home.

The cost explains why families look for help. The 2024 national median was $5,900 a month for assisted living and $9,277 for a semi-private nursing home room (CareScout Cost of Care Survey).

Medicare

Medicare.gov is direct: "Medicare doesn't pay for long-term care," and for those services "you pay all costs." Most long-term care is non-medical, so "Medicare and most health insurance, including Medicare Supplement Insurance (Medigap), don't pay for long-term care services, including care in a nursing home or in the community."

Medicare does cover short-term skilled nursing facility care under specific conditions:

Medicare.gov notes that some Medicare Advantage Plans may charge copayments during the first 20 days. Some plans may also waive the 3-day requirement.

Medicaid

Medicaid is a joint federal and state program. Rules differ by state.

• Nursing homes: Medicaid.gov states that nursing facility services "are required to be provided by state Medicaid programs for individuals age 21 or older who need them." States "may not limit access to the service, or make it subject to waiting lists." Each state sets its own level-of-care criteria.

• Care outside nursing homes: Under Section 1915(c) waivers, states can offer home and community-based services instead of institutional care. Medicaid.gov reports that "Forty seven states and DC are operating at least one 1915(c) waiver." NIA notes that Medicaid may cover some assisted living costs for eligible people in some states.

• Use in residential care: In 2020, about 18% of residents of residential care communities, including assisted living, were Medicaid beneficiaries (CDC, National Post-acute and Long-term Care Study).

Not every community accepts Medicaid. Ask each community whether it does and which levels of care are covered.

Long-term care insurance

The Administration for Community Living describes long-term care insurance as "designed to cover long-term services and supports, including personal and custodial care in a variety of settings such as your home, a community organization, or other facility." Policies "reimburse policyholders a daily amount (up to a pre-selected limit)" for help with activities such as bathing, dressing or eating.

What a policy pays depends on its terms, including the daily limit, waiting period and covered settings. ACL also notes that the insurer "may raise the premium on your policy." Check the policy document and confirm the coverage with the insurer.

VA Aid and Attendance

VA.gov describes Aid and Attendance and Housebound benefits as "monthly payments added to the amount of a monthly VA pension for qualified Veterans and survivors." Qualifying conditions include needing "another person to help you perform daily activities, like bathing, feeding, and dressing," or being "a patient in a nursing home due to the loss of mental or physical abilities related to a disability." VA notes you can't receive Aid and Attendance and Housebound benefits at the same time.

The payment is based on "the difference between your income for VA purposes and a limit that Congress sets," called the Maximum Annual Pension Rate (MAPR). VA.gov lists these rates effective December 1, 2025:

VA.gov sets a net worth limit of $163,699 for December 1, 2025 to November 30, 2026. Some non-reimbursable medical expenses "may reduce your income for VA purposes." People in a nursing home also file VA Form 21-0779. The medical examination form is VA Form 21-2680.

NIA adds that the VA "provides coverage for long-term care at a facility or at home for some veterans." VA nursing homes may have a waiting list.

Other ways families pay

NIA lists other private options, including "long-term care insurance, reverse mortgages, certain life insurance policies, annuities, and trusts." The right option "depends on many factors, including the person's age, health status, and financial situation."

For an explanation of how communities build their bills, read How senior living pricing works. To compare care levels, read Independent living vs assisted living vs memory care vs nursing home, or see assisted living and memory care.

Questions to ask a community about payment

1. Which payment sources do you accept: private pay, Medicaid, long-term care insurance, VA benefits?
2. If a resident runs out of private funds, what happens to their place?
3. Will you help file long-term care insurance claims?
4. Is any part of the fee refundable, and when?

See which communities are near you

USR lists 21,588 approved senior living communities in 7,597 cities across all 50 states and DC (as of October 2, 2026).

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