When savings run out, Medicaid is the program that pays for long-term nursing home care for most Americans who qualify. That is the short answer to a frightening question — and if you are reading this because a parent's money is nearly gone, take a breath. There is a path, and no one is going to be turned onto the street the day the account hits zero.
A nursing home is expensive on purpose — it is round-the-clock care. A semi-private room costs $315 a day, about $114,975 a year, and a private room $355 a day, per the CareScout Cost of Care Survey 2025 published by Genworth. Almost no family can pay that out of pocket for long. Below is how the money actually works when the private funds are gone.
Medicaid: the main answer when the money is gone
Medicaid is a joint federal and state program, and it is the single largest payer of long-term nursing home care in the country. Unlike Medicare, it covers custodial care — the long-term help with daily living that a nursing home provides. To qualify, your parent must meet both a medical need for that level of care and financial limits on income and assets.
Those financial limits are strict, and they vary a lot from state to state. In general, the person applying can keep only a small amount of countable assets. But the rules are more forgiving than families fear: a home may be protected while a spouse still lives in it, and a spouse who stays in the community is allowed to keep a portion of income and assets so they are not left destitute. This is called spousal impoverishment protection.
Why Medicare will not pay the long-term bill
This is the most common and most painful surprise for families. Medicare does not pay for custodial or personal care that helps with daily living activities such as bathing, dressing or using the bathroom, when this is the only care your parent needs, per Medicare.gov. That is exactly what a nursing home provides day after day.
Medicare will pay for a limited, short stay in a skilled nursing facility — but only after a qualifying hospital admission, only while your parent is actively improving, and only for a capped number of days. Once the skilled need ends, Medicare coverage stops. It was never designed to fund years of long-term care.
Help for veterans and surviving spouses
If your parent served in the military, there may be another source of help. VA Aid and Attendance is a monthly payment added to a VA pension for those who need another person to help with daily activities such as bathing, feeding and dressing, per VA.gov. It can be used toward care costs, including a nursing home.
To qualify, the veteran generally must already receive a VA pension and need daily help, be largely bedridden, live in a nursing home because of disability, or have severely limited eyesight. It cannot be combined with Housebound benefits — your parent qualifies for one or the other, not both. Surviving spouses of veterans may also be eligible. Applications take time, so start early.
Other pieces that can help pay
Before assuming there is nothing, check every possible source. Each one can shrink the gap between what your parent can pay and what care costs.
- Long-term care insurance — if your parent bought a policy years ago, check the benefits; many families forget these exist.
- A life insurance policy that can be surrendered for cash value or, in some cases, converted to help fund care.
- Social Security and pension income, which usually goes toward the cost of care while Medicaid covers the rest.
- Selling or renting a home, though the family home is often protected under Medicaid rules while a spouse lives there.
- State-specific programs and waivers that may help with care at home before a nursing home is needed at all.
How to arrange care when the money is running out
You do not have to figure this out alone, and you do not have to figure it out perfectly. Start with the people already in your parent's corner.
- 1Talk to the hospital or facility social worker — they handle Medicaid transitions every day and can start the paperwork.
- 2Contact your state Medicaid office or local Area Agency on Aging to confirm the exact income and asset limits where your parent lives.
- 3Gather financial records for the past five years — bank statements, property records, income sources — before you apply.
- 4Consult an elder law attorney before spending down or transferring any assets, to avoid a penalty period.
- 5Check VA eligibility if your parent is a veteran or surviving spouse, and apply for Aid and Attendance early.
- 6Choose a Medicaid-certified facility — not every nursing home accepts Medicaid, so confirm before your parent moves in.
A word about hired help along the way: families often turn to a geriatric care manager to navigate all of this. Just know that Original Medicare does not pay for a geriatric care manager — the role is care navigation and coordination, which Original Medicare excludes, per Medicare.gov. Families should count on paying for one out of pocket, per AARP; the Aging Life Care Association reports about 80% of clients pay privately. It can still be money well spent when the choices feel overwhelming.
Staying connected while the paperwork gets sorted
The weeks between "the money's running out" and "the Medicaid bed is confirmed" are stressful and slow. During that stretch, your parent may still be at home alone, and you may be too buried in forms to call as often as you'd like. A daily check-in — a friendly voice that notices how your mom Margaret sounds and lets you know if something seems off — can carry some of that weight. Call Mabel is a daily phone companion built for exactly that gap: warm conversation on her regular phone, and a heads-up to you when something changes. It complements the care and paperwork you're arranging; it is not medical care or emergency monitoring, and it never replaces the human help your parent needs.
- ✓Medicaid is the primary program that pays for a nursing home when savings are gone — start the application early.
- ✓Medicare does not cover long-term custodial care; do not count on it for the ongoing bill.
- ✓Never spend down or gift assets to qualify for Medicaid without advice — the five-year look-back can cause penalties.
- ✓Check VA Aid and Attendance if your parent is a veteran or surviving spouse.
- ✓Lean on the hospital social worker, your state Medicaid office, and an elder law attorney — this is their daily work.