How to Pay for Long-Term Care without Going Broke

How to Pay for Nursing Home Care without Going Broke

One of the things that concerns people most about nursing home care is how to pay for that care. There are basically four ways that you can pay for the cost of a nursing home care:


If you are fortunate enough to have this type of coverage, it may go a long way toward paying the cost of the nursing home. Unfortunately, long-term care insurance has only started to become popular in the last few years and most people facing a nursing home stay do not have this coverage. There are many varieties of insurance available. Be sure to consult with your elder law attorney to determine if there is an option that meets your needs.


This is the method many people are required to use at first. Quite simply, it means paying for the cost of a nursing home out of your own pocket. Unfortunately, with nursing home bills averaging approximately $12,000 – $14,000 per month in our area, few people can afford a long-term stay in a nursing home.


This is the national health insurance program primarily for people 65 years of age and older, certain younger disabled people, and people with kidney failure. Medicare provides assistance with nursing home costs related to short-term rehabilitation services, but only if you meet the strict qualification rules.


This is a federal and state funded and state administered medical benefit program which can pay for the cost of the nursing home if certain asset and income tests are met. In Massachusetts, the program is called MassHealth.

To qualify for Medicaid, applicants must pass fairly strict tests on the amount of assets they can keep. To understand how Medicaid works, we first need to review what are known as exempt (non-countable) and non-exempt (countable) assets.

Exempt Assets and Countable Assets:

What Can you Keep and What is at Risk?

Exempt assets are those which Medicaid will not take into account when a person applies for Medicaid benefits. In general, the following are the primary exempt assets:

  • Home (primary residence), for a single person, home equity must be less than $906,000 (in 2021). The nursing home resident is required to declare “intent to return home”, even if this never actually takes place.
  • $2,000 cash or other countable assets.
  • Personal belongings and household goods.
  • One car or truck.
  • Burial spaces and certain related items for applicant and spouse.
  • Up to $1,500 per person as a burial fund for applicant and spouse.
  • Irrevocable, prepaid funeral contract.
  • Cash value of life insurance if face value is $1,500 or less.

All other assets are generally non-exempt, and are counted. Basically, all money and property, and any item that can be valued and turned into cash, is a countable asset unless it is one of those assets listed earlier as exempt. Countable assets include:

  • Cash, savings, and checking accounts, credit union share and draft accounts.
  • Certificates of deposit.
  • U.S. Savings Bonds.
  • Individual Retirement Accounts (IRA), Keogh plans, 401K plans, 403B plans.
  • Trusts (depending on the terms of the trust).
  • Real estate (other than the primary residence).
  • A second car, truck or mobile home.

While the Medicaid rules themselves are complicated and tricky, it’s safe to say that a single person will qualify for Medicaid if she has only exempt assets plus cash and/or money in the bank, up to $2,000.

©Surprenant & Beneski, P.C. 35 Arnold Street, New Bedford, MA 02740, 336 South Street, Hyannis MA 02601 and 45 Bristol Drive, Easton MA 02375.  This article is for illustration purposes only.  This handout does not constitute legal advice. There is no attorney/client relationship created with Surprenant & Beneski, P.C. by this article. DO NOT make decisions based upon information in this handout. Every family is unique and legal advice can only be given after an individual consultation with an elder law attorney. Any decisions made without proper legal advice may cause significant legal and financial problems.