What Happens If You Have No Money for a Nursing Home?

The prospect of needing nursing home care often brings significant financial concern for many individuals and their families. Costs are substantial, frequently reaching tens of thousands of dollars per month, quickly depleting savings and assets. For instance, the national median cost for a private room is approximately $10,965 per month in 2025, while a semi-private room averages around $9,555 monthly. These figures translate to annual expenses exceeding $114,000 for a semi-private room and over $131,000 for a private room.

Such high costs challenge those with limited or no financial resources. When personal funds are insufficient or exhausted, exploring alternative support becomes paramount. This article details options and processes for affording nursing home care when personal funds are no longer viable.

Understanding Nursing Home Funding

Initial nursing home costs are typically covered through private payment, using personal savings, investments, or other assets. This allows immediate access without public program eligibility. However, high daily and monthly charges quickly deplete personal funds, often within months or a few years.

Long-term care insurance is another funding avenue, designed to cover nursing home, assisted living, or in-home care. Policyholders pay premiums for a daily or monthly benefit once care is needed. While beneficial, policies often have benefit caps, waiting periods, and can be expensive, potentially not covering full duration or total cost.

Medicare, the federal health insurance program for individuals aged 65 or older, has a very limited role in covering long-term nursing home care. It does not pay for custodial care, which is most long-term stays and includes daily activity assistance. Medicare only covers short-term stays in a skilled nursing facility (SNF) for rehabilitation after a qualifying hospital stay. This coverage is limited to 100 days; the first 20 days are fully covered, with a $209.50 daily co-payment for days 21 through 100 in 2025.

When personal funds and private insurance are exhausted or insufficient, many turn to government assistance. For a significant portion of the population, private funding is not sustainable for extended long-term care. The limitations of private pay, long-term care insurance, and Medicare highlight the need for other support systems to ensure access to nursing home services.

Medicaid Eligibility for Long-Term Care

Medicaid is a safety net for individuals needing long-term nursing home care who have exhausted financial resources. This joint federal and state program is the primary payer for those meeting specific financial and medical eligibility criteria, acting as a “payer of last resort.” Eligibility is determined by strict, generally low, limits on income and countable assets, which vary by state.

Medicaid income limits vary by state. Some states use an “income cap,” where gross monthly income cannot exceed a threshold, often 300% of the SSI federal benefit rate. Other “medically needy” states allow applicants to “spend down” excess income on medical expenses. In both cases, approved individuals contribute most monthly income, minus a small personal needs allowance, towards care costs. This is known as the “patient’s share of cost.”

Asset limits are restrictive. For a single individual, countable assets generally must not exceed $2,000, though this varies by state. Countable assets include bank accounts, stocks, bonds, mutual funds, and other investments. Certain assets are non-countable or exempt for eligibility.

Exempt assets typically include the applicant’s primary residence, if its equity value does not exceed a state-specific limit (often $713,000 to $1,071,000 in 2024), especially if a spouse, minor child, or disabled adult child lives there. One vehicle, personal belongings, household furnishings, and a small amount for burial expenses (often up to $1,500-$2,000) are also generally exempt.

Medicaid imposes a 60-month, or five-year, “look-back period” for asset transfers immediately preceding application. Transfers of assets for less than fair market value during this period can result in a penalty period of ineligibility. For example, gifting money or selling property below market value can trigger a penalty.

The penalty period is calculated by dividing the uncompensated value of the transferred asset by the state’s average monthly nursing home cost. This rule prevents individuals from impoverishing themselves solely to qualify for Medicaid after divesting significant assets.

Protections exist for the “community spouse” remaining at home. “Spousal impoverishment” rules prevent their impoverishment due to care costs. The Community Spouse Resource Allowance (CSRA) allows the community spouse to retain assets, typically $30,828 to $154,140 in 2024, protected from the institutionalized spouse’s asset limit.

The Minimum Monthly Maintenance Needs Allowance (MMMNA) ensures the community spouse has sufficient income. If their income falls below a state-determined minimum, a portion of the institutionalized spouse’s income can be allocated to them. The MMMNA typically ranges from $2,465 to $3,853.50 per month in 2024. These allowances help the community spouse maintain financial independence.

Applicants must also meet a medical necessity or “level of care” requirement. A medical professional must assess the individual, determining they require nursing home care rather than a lower level of care. Medical criteria vary by state but generally involve assessing functional limitations, such as needing assistance with activities of daily living (ADLs) or cognitive impairment.

States are generally required to implement “estate recovery” programs. After a Medicaid recipient dies, the state seeks to recover costs paid for their long-term care from their estate. The estate typically includes assets passing through probate, like the home. Exceptions exist, such as when a surviving spouse, minor child, or disabled child resides in the home.

The Medicaid Application Process

Navigating the Medicaid application process requires careful attention and thorough documentation. Applications are typically initiated through the state’s Medicaid agency, often a Department of Social Services or Human Services, or via an online portal.

Submitting the application requires collecting various documents to verify identity, residency, and financial status. These include:

• Proof of identity and citizenship, such as a birth certificate or passport.
• Bank statements for all accounts (checking, savings, money market).
• Investment statements (stocks, bonds, mutual funds, retirement accounts).
• Real estate deeds or vehicle titles.

Income verification is also required, with documentation of all sources like Social Security letters or pension statements. If assets were transferred within the 60-month look-back period, related documentation must be provided. Medical records confirming the need for nursing home care, from a physician or healthcare professional, are also necessary.

Completing the official application form accurately is paramount. The form, which varies by state, requests details about personal information, household composition, income, assets, and past financial transactions. Ensure all sections are filled out completely and truthfully, as inaccuracies can lead to delays or denial.

Once the application and supporting documents are compiled, submission methods include mailing, in-person delivery to a local Medicaid office, or electronic submission via a secure online portal in some states. Retaining copies of everything submitted, with proof of delivery, is a prudent practice.

An interview with a caseworker is often required to verify information and clarify details. The caseworker may ask about financial history, asset transfers, and current living arrangements to ensure eligibility compliance. Being prepared to answer questions and provide additional documentation can streamline the process.

Processing timeframes vary by state and application complexity. While some applications process within 45 to 90 days, others, especially those with asset transfers or complex financial histories, can take longer. Applicants can follow up with the Medicaid agency regarding status if there are undue delays.

After processing, the applicant receives a formal decision notification. If approved, the notice specifies coverage effective date and any patient share of cost. If denied, the notice must provide reasons and inform the applicant of their right to appeal. An appeals process allows applicants to present their case before an administrative law judge.

Other Financial Support Avenues

Beyond Medicaid, other financial support avenues offer nursing home assistance, each with specific eligibility and benefits. These options cater to particular circumstances or populations, providing additional resources when private funds are insufficient.

Veterans’ benefits, especially the Aid & Attendance Pension, can assist eligible veterans and surviving spouses. Qualification requires 90 days active duty, with one day during wartime, and a non-dishonorable discharge. Applicants must also meet medical criteria, demonstrating a need for daily assistance, being housebound, or residing in a nursing home. Income and asset limits apply, with a 2024 net worth ceiling of approximately $155,356. Applications are processed through VA regional offices or accredited veterans’ service officers.

Long-Term Care Partnership Programs are state initiatives encouraging private long-term care insurance while offering enhanced Medicaid asset protection. If an individual purchased a qualified policy under a partnership program and later needs Medicaid, they can protect assets equal to the policy’s benefits. This exempts those assets from Medicaid’s strict limits, incentivizing early planning and impacting future Medicaid eligibility.

Some states offer Home and Community-Based Services (HCBS) waivers. These programs help cover long-term care costs or allow individuals to receive care in alternative settings outside a nursing home, such as assisted living or adult day care. HCBS waivers can be more cost-effective and preferable. However, availability, eligibility, and scope of services vary considerably by state, and they often have waiting lists.

A limited number of nursing facilities may offer financial assistance or charity care. These policies are not a primary solution for long-term custodial care but might provide temporary or partial assistance in dire circumstances. Such programs are rare for long-term care, usually at the facility’s discretion, and often require a formal application and demonstration of extreme financial hardship.