How to Pay for Nursing Home Care When You Have No Savings

The True Cost of Nursing Home Care and Why Medicare Won't Help

The bottom line first: a private room in a U.S. nursing home costs a median of $116,808 per year. A semi-private room averages $104,025. Those figures come from the Genworth Cost of Care Survey, and they vary enormously by state. A bed in rural Louisiana and a bed in suburban Connecticut are not priced on the same planet. You can check your state's median at longtermcare.acl.gov.

Here is the part that catches most families off guard: Medicare does not pay for long-term custodial care. Medicare covers up to 100 days of skilled nursing after a qualifying hospital stay, and only if you continue to need skilled services like IV therapy or physical rehabilitation. Once the need shifts to help with bathing, dressing, and eating (custodial care), Medicare stops paying. That 100-day clock is also not guaranteed; many people are discharged well before it runs out.

So if your parent has no savings and needs full-time nursing home care, the path forward runs through means-tested programs: Medicaid, veterans benefits, or a combination of both, sometimes with short-term financing to bridge the gap.

Medicaid Eligibility for Nursing Home Care: The Key Criteria

Medicaid is the single largest payer of nursing home care in the United States. To qualify, your parent must meet both financial and medical criteria.

Asset and Income Limits

• Assets: The federal baseline is roughly $2,000 to $3,000 in countable assets, but many states set higher limits or run special programs. Some states (known as "209(b) states") use their own, sometimes stricter, criteria. You must check your state's specific limits through your state Medicaid agency. A good starting point is the Eldercare Locator at eldercare.acl.gov, which can connect you to the right office.
• Home equity: There is a federal cap (set at $713,000 for 2026, though your state may differ) on countable home equity, but the home is typically exempt if a spouse or certain dependent relatives still live there.
• Income: Most states require the resident's monthly income (Social Security, pension) to go to the nursing home, minus a small personal needs allowance of $30 to $50 per month.

The 5-Year Look-Back Period

Any assets your parent transferred, gave away, or sold below market value within 60 months of applying for Medicaid may trigger a penalty period. During that penalty, Medicaid will not pay for nursing home care. This is one of the most common traps families fall into. Even well-intentioned gifts to grandchildren or transfers to a family trust can cause problems.

Spousal Protections

If one spouse enters a nursing home and the other stays home, the "community spouse" can keep a minimum monthly maintenance allowance (roughly $2,555 in 2026, adjusted annually) and retain countable assets up to approximately $154,140. These figures change each year and vary by state, so confirm with your state Medicaid office or an elder law attorney.

Your Document Checklist

Before you apply, gather:

1. Five years of bank statements for every account
2. Property deeds and mortgage documents
3. Retirement account and life insurance statements
4. Proof of income (Social Security award letter, pension statements)
5. Proof of citizenship (passport or birth certificate) and Social Security card

How to Apply for Medicaid: A Step-by-Step Process

Apply through your state's Medicaid agency, often called the Department of Health and Human Services. You can find the correct office through the Eldercare Locator or by calling 1-800-677-1116.

If your parent is already in a nursing home and has essentially no assets, ask the facility's social worker about "presumptive eligibility" or an emergency Medicaid application. Many facilities have dealt with this situation hundreds of times and can help expedite the paperwork.

Here is a script you can use when calling the Medicaid caseworker:

"My parent has no savings and needs nursing home care now. We need to start the Medicaid long-term care application. What is the fastest path to approval? Can we get a presumptive eligibility decision?"

If Your Parent Is Denied

Denials happen, and they are not the end of the road. Every state must offer a fair hearing process. You typically have 30 to 90 days from the denial notice to request a hearing. Key tips:

• Read the denial letter carefully. It must state the specific reason (excess assets, missing documents, look-back penalty).
• Gather any evidence that addresses the stated reason. For example, if the denial cites an asset transfer, provide documentation showing the transfer was for fair market value.
• Consider hiring an elder law attorney for the hearing. Many offer a flat fee for Medicaid appeals.

Veterans Benefits: Aid and Attendance for Nursing Home Costs

If your parent (or their late spouse) served in the military during wartime, the VA's Aid and Attendance pension can provide meaningful monthly income toward nursing home costs.

How Much and Who Qualifies

The maximum monthly benefit for a single veteran was $2,300 in 2025, and for a married veteran, $2,727. The VA adjusts these rates annually, usually in December, with cost-of-living increases. Verify the current rates at VA.gov or with a Veterans Service Officer (VSO).

Eligibility requires:

• At least 90 days of active duty, with one day during a recognized wartime period
• A discharge other than dishonorable
• A medical need for help with daily activities
• A net worth below roughly $155,000 (2025 figure, excluding home and vehicle), again subject to annual adjustment

How to Apply

The application requires VA Form 21-2680 (Examination for Housebound Status or Permanent Need for Regular Aid and Attendance), completed by a physician. The single best move you can make is to work with a free accredited Veterans Service Officer. Find one through the VA's accreditation search.

A script for your first VSO call:

"My father is a veteran who needs nursing home care and has no savings. Can you help us apply for Aid and Attendance, and can you tell us whether he might also qualify for Medicaid?"

If the VA Denies the Claim

The VA has a formal decision review process with three lanes: a Supplemental Claim (new evidence), a Higher-Level Review (same evidence, different reviewer), or an appeal to the Board of Veterans' Appeals. You generally have one year from the decision date to choose a lane. A VSO can guide you through this at no cost.

Bridge Financing While Waiting for Benefits

Medicaid applications can take 45 to 90 days. VA claims often take longer. During that gap, someone has to pay the bill. Here are limited options, listed from least risky to most.

1. "Medicaid pending" arrangements. Many nursing homes will hold a bed and accept delayed payment while a Medicaid application is processing. Ask the facility's billing department for a written agreement that spells out what happens if the application is denied or delayed. Not all facilities offer this, so confirm in writing before admission.
2. Life insurance cash value or viatical settlements. If your parent has a whole life policy with cash value, you may be able to borrow against it or sell it (a viatical settlement). Warning: proceeds could count as an asset and affect Medicaid eligibility. Consult an elder law attorney before taking this step.
3. Specialty medical credit (e.g., CareCredit). Some families use medical credit lines, but many nursing homes do not accept them. Call the facility's billing office first. If they do accept it, confirm the interest rate and repayment terms in writing.
4. Credit cards. This should be a genuine last resort. At typical APRs of 20% or higher, three months of nursing home costs (roughly $26,000 to $30,000) can become unmanageable debt fast.

A general rule: do not take on bridge financing that exceeds roughly three months of care costs unless you have a clear, documented path to reimbursement from Medicaid or VA benefits.

Family Pooling and Coordinating Financial Contributions

When siblings and extended family want to pitch in, a little structure goes a long way.

Setting Up a Family Care Fund

Open a dedicated joint bank account where family members deposit monthly contributions. Under current IRS rules, each person can give up to $18,000 per year (the annual gift tax exclusion) to another individual without filing a gift tax return. Contributions above that amount require a filing but rarely result in actual tax owed.

Critical Medicaid warning: Any money given directly to your parent, or spent on their behalf, within five years of a Medicaid application can trigger the look-back penalty. If your parent may apply for Medicaid, have an elder law attorney review the arrangement before any transfers are made. Pooled funds used to pay the nursing home directly (rather than gifted to the parent) may be treated differently depending on the state.

A Script for the Family Meeting

"We need to raise $X per month to cover the gap until Medicaid or VA benefits start. Each of us can commit $Y per month. Let's agree on amounts and open a joint account by Friday."

If your parent is already on Medicaid, family gifts can still cover "personal needs" items (clothing, haircuts, a favorite magazine) within the personal needs allowance. These small gifts do not reduce Medicaid benefits.

Pooled Income Trusts

Some states allow families to establish a pooled income trust that holds income exceeding Medicaid's limit without disqualifying the resident. These trusts must be drafted by an attorney and administered by a nonprofit organization. Ask your elder law attorney whether your state permits them.

What Happens to Social Security and Pension Income

Once your parent is on Medicaid in a nursing home, their Social Security and pension income generally goes directly to the facility as "patient liability." The resident keeps only the personal needs allowance (typically $30 to $50 per month). For a deeper breakdown of how this works, see our guide on what happens to a parent's Social Security and pension when they move to a nursing home.

A few specifics worth knowing:

• SSI recipients: If your parent receives Supplemental Security Income and is in a Medicaid-covered nursing home, the SSI payment drops to $30 per month (the federal benefit rate for institutionalized individuals).
• Spousal income: The community spouse may be entitled to a portion of the nursing home resident's income if their own income falls below the maintenance allowance. Ask the Medicaid caseworker about a "spousal income diversion."
• Pension elections: Some private pensions allow a spousal election that redirects part of the benefit to the community spouse. If your parent has not yet started receiving the pension, check whether this option exists.

Creating a Financial Care Plan: When to Call the Professionals

You do not have to figure all of this out alone. Here are the people who can help, roughly in order of priority.

1. Elder law attorney. They find legal ways to preserve assets and structure Medicaid applications correctly. Typical cost: $200 to $500 per hour, though some offer free initial consultations. Find one through the National Academy of Elder Law Attorneys.
2. Veterans Service Officer (VSO). Free help with every VA benefit application. Locate one at va.gov.
3. State Health Insurance Assistance Program (SHIP). Free counseling on Medicare, Medicaid, and long-term care insurance. Call 1-800-MEDICARE or visit shiphelp.org.
4. Certified Financial Planner (CFP®) with senior care experience. Ask upfront: "Do you have experience with Medicaid planning and veterans benefits?" If the answer is vague, keep looking.

Your Next-Steps Timeline

When	Action
This week	Call an elder law attorney and your state Medicaid office
This month	Submit the Medicaid application and VA Aid & Attendance claim (if eligible)
Monthly	Track spending, benefits received, and any family contributions

If you are also weighing which facility is the right fit, our guide on how to choose a nursing home for a parent with dementia covers the quality indicators and questions to ask during tours.

This article provides general information about paying for nursing home care and is not legal, financial, or tax advice. Rules vary by state and change annually. Consult a qualified elder law attorney or financial planner for guidance specific to your family's situation.