Pennywise and Happy: The Ultimate Guide to Financing Nursing Home Care, Part 1

When it comes to nursing home care, many people immediately think of the high costs involved, and you may already have some preconceived notions about how you’ll pay for it.  

Some common misconceptions include the belief that nursing home care is really expensive and that it will require selling your house, that your spouse will be left destitute, or that your children will inherit debt. However, there are many programs available to help pay for nursing home care, and it’s important to understand your options. 

These may include: 

  • The Older Americans Act Program  
  • Medicare  
  • Medicaid  
  • Veterans Benefits  

Whether you’re considering setting up a trust or exploring other options, having a solid understanding of how to finance nursing home care is essential, particularly if you or a loved one is aging, and you want to make informed decisions.  

Explore the Older Americans Act Program, a Hidden Gem 

The Older Americans Act Programs have been around for a long time. Many people don’t realize they were established by federal law back in the 1960’s. These programs are provided through local Aging Services Access Points (ASAP), such as Baypath Elder Services in Marlborough, Elder Services of Worcester, and Minuteman Senior Services which covers the Lexington, Acton, Bedford area.  

The programs offer various services, including Homemaker Services and Home Health Aides, which have certain eligibility criteria, usually based on income. While these services won’t cover nursing home care, they can help seniors stay at home longer and delay nursing home placement.  

 When considering paying for nursing home care, utilizing these services can be a great way to reduce costs. If you need help at home, it’s worth reaching out to your local ASAP to see what services they can provide. They may offer some services for free and additional services for a low cost. This is one of the first options to consider. 

Medicare: Cracking the Co-Pay Code 

Medicare is the most common form of paying for nursing home care. It is an entitlement program that means we have all paid into the system while we worked and are entitled to our Social Security and Medicare benefits. Medicare covers catastrophic care hospitalizations, which is part A, and wellness care, which is part B. Additionally, Medicare HMOs also exist, which are considered part C.  

For nursing home coverage, Medicare pays for Rehab Services. If you had a fall or injury and were admitted to the hospital for at least three overnights, Medicare’s perspective is that it’s reasonable that you may need some rehab before you can safely go home. Medicare will cover rehab so long as you continue to improve up to 100 days, but there is no guarantee that you will get all 100 days. If you plateau in your physical or occupational therapy, Medicare will stop paying for rehab. 

Medicare HMOs may be stricter and look at whether you are likely to be able to go home once you are fully rehabbed. If the answer is no, they may shut off your coverage even sooner. However, it can be hard to predict the timing with Medicare HMOs. 

It’s important to note that Medicare doesn’t necessarily cover a hundred percent, and they don’t necessarily cover all rehab time. Medicare covers 100% of the first 20 days, and from days 21 up to 100 days, there is a copay. For people with a Medicare supplement health insurance policy, the supplement covers the copay. If you get to 100 days but still need rehab, Medicare will not pay for it.  

Piecing Together the Medicaid Puzzle  

Medicaid is a state-provided health insurance coverage program that requires applicants to meet specific financial and medical criteria. In Massachusetts, it is referred to as Mass Health, which covers a wide range of programs, including nursing home care, health insurance for low-income individuals and children, among others.   

To be eligible for Medicaid, you must medically need to be in a nursing home, which means needing assistance with daily living activities, and meet financial qualifications. Assets are closely scrutinized, with a limit of $2,000 in countable assets for a single person and $2,000 for the applicant and $148,620 for the spouse for a married couple. Assets, including personal belongings, prepaid burial and funeral costs, and one car, are generally countable, with some exceptions. A primary residence is not counted as an asset if there is still a healthy spouse living in it, and the equity is less than $900,000.   

Trusts can be used to protect assets, but it has to be the right trust, with no access to the assets, and assets must have been put in at least five years before applying for Medicaid. provides more information on Medicaid, and a guide is available for download. However, specific numbers in the guide may change annually. Pooled trusts may no longer be available as an option starting June 1st.  

Supporting Those Who Served: Veteran’s Benefits   

This is a pension benefit for wartime veterans with high out-of-pocket medical expenses. To be eligible, the veteran must be at least 65 years old, have served at least 90 days in active duty, one of which must have been during a period of war, and received a discharge other than dishonorable. For veterans who served in the Middle East during the ongoing period of war, the service requirement is two years. This benefit is a significant source of funding for senior veterans who may have served in Vietnam or Korea.  

The maximum pension amount a single veteran over 65 can receive is $16,037, and the maximum for a married veteran whose spouse is not a veteran and requires aid in attendance is higher. The actual amount a veteran can receive depends on their income and medical expenses. Most out-of-pocket medical expenses can be subtracted from the veteran’s income, and their pension is determined by the difference. There are eligibility rules for VA benefits, including an asset cap of $150,538 and income calculations based on medical expenses that are in excess of 5%.  

VA benefits can help pay for nursing home care, home care, and assisted living care. Private payment may be required to ensure a private room or access to a particular nursing home. Personal funds may also be necessary for a period while working towards eligibility for other benefits, such as Medicaid.  

Want to Know More?   

Stay tuned for our next article. We will be covering other programs that can help pay for nursing home care, including:  

  • Long-Term Care Insurance  
  • Reverse Mortgages  
  • Life Settlements and  
  • Senior Living Lines of Credit 

Join us for our monthly seminar on all things elder law! Well be sharing valuable insights and strategies to help you navigate the complex world of legal issues affecting seniors.

Whether you’re looking to:

  • plan for long-term care
  • protect your assets, or
  • ensure the well-being and care of your loved ones

Our seminars will provide you with the tools and knowledge you need to make the best decisions for your family.

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