Strategies for Financing Nursing Home Care and Medicaid

This is a guest post by Raychelle Powers.

When we get to the age that we need nursing home care, we hope we have the money for it. The sad fact is most people don’t have the money to afford long-term care though. Let’s take a look at the financing options available for nursing home care, so that someday, you can rest assured you’ll be in good hands.
nursing home

Basic Options

There are three basic finance plans you should know about. The first option is paying out of your own pocket for long term care. Most people can’t afford the $4,000 – $15,000 a month it costs to live in a nursing home though, making that option a tough one. The next option is utilizing insurance benefits for long term care, but most people don’t have the proper coverage for that. The third option is Medicaid. The Medicaid program goes by financial need. There are ways to protect your personal assets so you don’t have to spend your own money first before qualifying for Medicaid though.

Extra Costs

Don’t become dependent on government benefits. Medicaid is the one government program that is there for people to take care of nursinghomecosts, but it’s not going to take care of everything. Most Medicaid recipients have spent all their private money and expect Medicaid to cover the rest, but they won’t. You need to have some money to pay for specific extras you will need.

Your Assets

Don’t try to give away all your savings and money to family as gifts so you can qualify for Medicaid. If you do, you may be surprised to know they go back five years to check financial records to see if you did this, and this can disqualify your for a period of time from receiving Medicaid benefits. Talk to an expert before you give any gift money away.

Care Services Money

In some instances, you can transfer some money to one of your children or someone in the family to pay for care services. If the cost of the services is equal to the amount you give to them or surpasses it, it will not be considered a gift.

Spousal Opt Out

Sad as it may seem, if one spouse goes into a nursing home and the other is still in good health, the well spouse could be left broke, due to the cost of the ill spouse’s nursing home costs. Fortunately most states are now allowing the spouse that is well to have their assets not counted, by opting out, so that Medicaid cannot take it or deem the sick spouse ineligible for benefits.


Investing in quality health insurance early can do wonders. Furthermore, adequate life insurance can also be used to pay for huge expenses. For instance, if your spouse has a $200,000 policy and passes away, that very well could pay for your time in a home.

Be sure to find an attorney who handles elderly law to generate a Durable Power of Attorney that will include the aging issues and Medicaid options. This could be one of the most important documents you own. The power of attorney will allow someone else to stand up for you and step in when you can’t do it yourself. There are protections built in the power of attorney, but using someone you know and trust is best.

Paying for long term care can be something far more expensive than you may have considered. It’s time to stop and think about what you have, what you need, and what you need to do now to give yourself the best long term care cost options.

Author Bio: Raychelle Powers writes about family, finance & saving money at

Image Credit: Courtesy of thinboyfatter via Flickr

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One thought on “Strategies for Financing Nursing Home Care and Medicaid”

  1. Planning ahead for the costs associated with nursing homes and elder care facilities is so important, but most people wait too late in life to start planning…..discuss with your attorney and financial planner to understand your options when it comes to covering these costs.

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