Who pays for most of the long-term care nursing home care provided in the United States?
Asked by: Dandre Maggio | Last update: October 6, 2025Score: 4.9/5 (72 votes)
Who finances most long-term care in the United States?
Long-term care coverage in the United States is a patchwork of programs that often falls well short of meeting people's needs and budgets. While Medicaid is the largest payer, some states have additional programs in place that vary by type of coverage, level of financial assistance, and eligibility (Exhibit 5).
Who pays the most for long-term care?
While Medicaid will pay up to 100% of the cost (indefinitely as long as there is a need), a nursing home resident must contribute nearly all of their income towards nursing home care as a Patient Liability. Note: Medicaid coverage is only provided for persons with limited financial means.
Where does the most funding for nursing homes come from?
Medicaid is the primary funding source for the majority of nursing home services in the US. Managed by states using a mix of state and federal funding, Medicaid covers more than 60% of residents nationwide.
Who is the largest payer for long-term care?
Medicaid is the primary payer across the nation for long-term care services.
The Real Cost of Nursing Home Care | Long Term Care Education
Who pays for long-term care in the United States?
The most common source of assistance is Medicaid, which offers several state-based programs to people who are eligible based on income or disability. These programs include home- and community-based services, adult foster care, and Medicaid personal care services.
Who bears the largest cost for long-term care services?
In terms of long-term care, the major public player is Medicaid – a joint federal-state program – which covers about 20 percent of the nation's total care hours provided and pays a considerable portion of the nation's nursing home bills.
How is long-term care funded in the US?
Paid LTC is financed by a variety of public and private sources. According to Kirsten Colello of the Congressional Research Service, Medicaid and Medicare pay for about 44% and 20% of compensated LTC, respectively. Smaller federal programs pick up around 6% of the tab.
How do most Americans pay for nursing homes?
The most common payment methods for nursing homes include health care programs like Medicare and Medicaid, as well as private insurance. Eligible veterans and their spouses can also apply for veterans benefits to cover nursing home costs.
Does social security pay for nursing homes?
Social Security benefits can indeed be used to cover some of the costs associated with nursing home care. These monthly payments, which most seniors receive based on their work history and contributions to the Social Security system, can be directed towards nursing home expenses.
How can I avoid paying for long-term care?
Does family have to pay for nursing homes?
More than half of the states have “filial responsibility” laws, under which adult children are responsible for their parents' medical bills if their parents are unable to pay. These laws are rarely enforced, for several reasons. For one thing, nursing home expenses usually are covered by Medicare or Medicaid.
Does Medicare pay for long-term care?
Long-term care
Long-term supports and services can be provided at home, in the community, in assisted living, or in nursing homes. Individuals may need long-term supports and services at any age. Medicare and most health insurance plans don't pay for long-term care.
How is most assisted living care usually paid for?
- Long-term care insurance.
- Veterans benefits.
- Charities and nonprofit organizations.
- State and local programs.
What is the average cost of long-term care in the United States?
According to Genworth's estimates, the median cost of a private room in a nursing home is $330 per day or $10,025 per month in 2024. Semiprivate rooms are more affordable, with a median cost of $294 per day or $8,929 month1.
What is the age limit for long-term care insurance?
While there is no set age in which you can no longer purchase long-term care insurance, the oldest age at which most insurance companies will issue a new long-term care insurance policy typically falls within the range of 75 to 80 years old.
How do you pay for assisted living when you have no money?
- Private Pay. Private pay essentially means you get a bill each month and you write a check for the cost of care and services. ...
- Long-Term Care Insurance. ...
- Reverse Mortgage. ...
- VA Benefits. ...
- Medicaid. ...
- Medicare. ...
- Supplemental Security Income (SSI) ...
- Life Settlements.
Who pays the most for long-term care in the US?
Medicaid: Does pay for the largest share of long-term care services, but to qualify, your income must be below a certain level and you must meet minimum state eligibility requirements. Such requirements are based on the amount of assistance you need with ADL. Learn more about Medicaid coverage for long-term care.
What happens to senior citizens when they run out of money?
There is help available for older adults who have run out of money, if you know where to look. The government has many programs that help with needs like healthcare, housing, food, and energy bills. Your local community offers hubs of information like libraries, city hall, and the parks district.
Who is the largest payer of long-term nursing home care?
Medicaid is by far the largest payer in the long-term care space, covering approximately 60% of long-term care services across the United States. This government-funded program provides essential financing for low-income individuals who need care but cannot afford it out of pocket.
What is the biggest drawback of long-term care insurance?
One of the biggest drawbacks of getting long-term care insurance is the risk of losing all the premiums you have paid over the years. If you end up not needing long-term care services, you won't be eligible for coverage. This means the money you've spent for coverage goes down the drain.
How is long-term care paid for primarily?
Most Americans have long-term health insurance. The Hill-Burton Act of 1954 led to the construction and expansion of many hospices. Custodial care includes services such as bathing, feeding, dressing, and getting into and out of bed. Long-term care is primarily paid for by the federal government.
Does a nursing home take your pension and social security?
First for the good news: A nursing home cannot simply take your retirement accounts or savings. Short of legal action due to an unpaid bill, you can distribute your assets as you see fit.
What is the least expensive type of long-term care?
- Home healthcare: This includes home health aides and any other long-term care support you receive at home.
- Assisted living communities: This type of long-term care provides housing with round-the-clock staff to help with basic daily living activities.
What percentage of Americans over 65 have long-term care insurance?
Another way to plan for future care needs is to purchase a long-term care insurance policy. One in ten adults (11%) say they have a private long-term care insurance policy, including 14% of those ages 65 and older.