There are a number of ways to pay for your long-term care. Here is a summary …

Private Pay:

In Western New York, the average cost of care for a skilled care nursing home is between $12,000 – $16,000 per month.

Although self-pay may not be the preferred manner for financing long-term care costs, self-pay is the first source of payment to consider.

The benefit of having private funds available to cover the costs of long-term care is choice and flexibility. Having a liquid pool of assets to pay for care makes an individual a desirable candidate for skilled-care placement and may provide the family with a choice of facility for their loved one.


Long-Term Care Insurance:

Long-term care (LTC) insurance is an insurance product that may help pay the costs associated with long-term care. LTC insurance covers services generally not covered by major medical health insurance, Medicare, or Medicaid.

If your loved one is aged 70 or older, it may be too late for him/her to purchase LTC insurance. Some medical conditions may make an individual uninsurable or the premiums may become cost-prohibitive. Often, LTC is unobtainable because of preexisting medical conditions or because the premiums are not affordable.

But even people who thought ahead and purchased LTC insurance may have to pay for certain long-term care costs. For example, the LTC insurance policy may have a waiting period (called an “elimination period”), meaning that the policy-holder will have to pay out-of-pocket until the waiting period expires (usually 30-90 days) before the LTC insurance policy begins paying out.

Further, there are usually limits on what is covered. For example, an LTC plan may provide coverage for long-term care costs for just two years or there may be a $200,000.00 lifetime limit. If your loved one lives longer than the policy provides for, or if his/her expenses surpass the limit, he/she will be responsible for the remainder of costs.



Medicare is a federal program available to persons who are age 65+ and certain disabled persons. Medicare is the health insurance component of Social Security. Many older adults incorrectly assume that Medicare will cover their long-term care costs; however, Medicare is a health insurance plan and long-term care costs are typically classified as non-medical expenses. Medicare may cover short-term stays for rehabilitative care.

If a patient was admitted to the hospital for three days or longer, Medicare will pay for the first twenty days of rehabilitation services in full. Medicare may also pay for up to the next eighty days with a co-pay, if the therapy is deemed “reasonable and necessary to treat the individual’s illness or injury” and requires the services of skilled professionals and medical oversight.



Medicaid is a joint federal-state program for needy persons who meet the financial criteria. There are different programs available for institutional care and home care.

Institutional Skilled Care Medicaid Program:

“Institutionalized Individual” may retain the following: $15,450 in resources, life insurance with a face value of $1,500 or less, unlimited irrevocable funeral trust account, and $50 per month in income.

“Community Spouse” may retain the following: $74,820 in resources (or ½ of the couple’s combined assets up to a maximum of $126,420, whichever is greater), a residence with up to $878,000 in equity value, a vehicle of any value, unlimited irrevocable funeral trust account, and $3,160.50 per month in income. If there is not sufficient income available to provide the community spouse with his/her income allowance, additional resources may in some cases be retained to generate additional income.

  • The 5-year look-back rule applies.
  • The penalty period for any transfer made within the look-back period will begin to run after the person applies (and would have been otherwise eligible) for Medicaid.
  • Exempt transfers between spouses, to disabled children, to trust for the sole benefit of a disabled child, or caretaker child are permissible.

Community Medicaid:

The Medicaid applicant must undergo a screening evaluation to determine his/her care needs.

The Medicaid applicant may retain the following: $15,450 in resources, life insurance with a face value of $1,500 or less, unlimited irrevocable funeral trust account, and $859 per month in income.

The Medicaid applicant’s spouse may retain the following: $74,820 in resources, a residence with up to $878,000 in equity value, a vehicle of any value, and an unlimited irrevocable funeral trust account.  The income contribution of the applicant’s spouse fluctuates depending on the individual circumstances.

  • The 5-year look-back rule does not apply.


Veterans Aid & Attendance:

If your loved one is a veteran or the surviving spouse of a veteran, who served in a period of war, was honorably discharged, and served for at least 90 consecutive days, he/she may be eligible for the Aid & Attendance pension benefit from the Department of Veterans Affairs, which can be used to cover some long-term care expenses.

Aid & Attendance pension funds are available to qualified veterans and their surviving spouses whose unreimbursed medical expenses are greater than their income.

This benefit is available to qualified, honorably discharged veterans, age 65+, who served during wartime. To qualify, the patient must have a medically documented need for help with daily activities and the patient must meet the net worth limit.

The net worth limit is $123,600. There will be cost-of-living inflation adjustments when the Social Security Administration makes cost-of-living increases. “Net worth” means the sum of the claimant’s assets and annual gross income, minus deductible medical expenses.

Example:   If a claimant’s assets total $117,000, with an annual income of $9,000, this totals $126,000 and exceeds the net worth limit.

Previously, the applicant could transfer assets and apply for benefits in the next month with no look-back. However, effective October 18, 2018, there is a 3-year look-back on assets transferred for less than fair market value. Transfers made prior to October 18, 2018 will not be subject to the look-back.

There is a lengthy application process for Veterans Aid & Attendance, but it can be worth the effort because the pension can be used for long-term care at home, in an assisted living facility, or in a nursing home.


Reverse Mortgage:

A reverse mortgage is a cash loan that seniors may take against their home’s equity. The lending bank makes payments in a single lump sum, in monthly installments, or as a line of credit. The loan does not have to be paid back until the borrower passes away or moves from the home for one full year. Most commonly, the loan is not paid back in increments. Instead, the home is sold and the lender is paid back the full loan amount plus interest.

Many seniors are in a situation where they do not have the income or savings to pay for personal care or for home modifications to enable aging in place.  However, they do have equity tied up in their home.  For some of these seniors, a reverse mortgage may be an option to use the proceeds from a reverse mortgage to pay for home care and/or make modifications to their home to make the home safer and more accessible, which can prolong or allow them to age at home indefinitely.

If you have any questions about the above material or wish to speak to an attorney, please contact PB Elder Law at (716) 204-1055. PB Elder Law is located at 455 Cayuga Road, Suite 600, Buffalo, NY 14225.

Long term care, Medicaid, medicare, Reverse Mortgage, Veterans benefits