Finding a Way: Long-Term Care Payment Options for Seniors

Updated: Aug 21, 2019

Senior Citizen

Medicare is an invaluable financial asset for America’s seniors. Unfortunately, Medicare doesn’t help much if you’re facing the high cost of assisted living or nursing home care. A private room can cost $7,000 or more a month, while assisted living averages $3,500 a month for a one-bedroom apartment. If those figures are beyond your means, you’ll need to find other ways to pay for long-term care, which can mean getting a little creative depending on your situation.

Here are a few options to consider.

Home Upgrades

Making a few upgrades can make it possible to remain in your home until you’re able to find the means to finance long-term care. If mobility is an issue, have grab rails installed in the bathroom, hallway, and stairway. Poor lighting is often a factor in home accidents, and it’s a major concern for seniors, so make sure there’s abundant ambient, non-glare lighting throughout your house. It may also be necessary to widen doorways (which should be at least 32 inches across), remove rugs, furniture, and small objects that represent a tripping hazard.


Medicaid is a program that’s jointly funded by state and federal governments designed to help seniors and disabled individuals pay for assisted living, nursing home, and community-based care. If you have limited income and assets, Medicaid could be an important resource if you’re facing the high cost of long-term care.

Long-Term Care Insurance

The good news is that, in most cases, long-term care insurance will cover the cost of assisted living. However, the bad news is that if you wait too long to purchase a policy, the cost will be quite high and may be unaffordable by the time you’re in your senior years. Very few people buy a long-term care policy in middle age or earlier, which gives you a better chance of finding a policy with affordable premiums.

If you haven’t been able to save enough to pay for long-term care, long-term care insurance can still be an option, but you should be aware that 45 percent of people age 70 to 79 are declined for coverage, according to the American Association for Long-Term Care coverage. It’s recommended that you take out a policy before you turn 65.

Investment-Based Funding

If you don’t have enough in savings, don’t qualify for Medicaid, and can’t afford long-term care insurance, you may need to get creative about utilizing available assets. Many people aren’t aware that you can sell a life insurance policy to raise funds for healthcare-related costs. Other options include taking out a reverse mortgage, seeking a bridge loan, or investing in an annuity.

Be aware that some of these options come with a certain amount of risk. For example, reverse mortgages come with conditions that may not be acceptable given your circumstances. The loan balance goes up as interest and fees accumulate, so as home equity is used up, you’ll have less to leave your heirs, who will have to repay the balance.

Sell Your Property

If you can’t afford long-term care, it might make sense to sell your home and use the proceeds to cover the cost of care. If you don’t have significant equity in your home, selling it to pay for long-term care may not be a viable option. Of course, it can often take quite a while for a home to sell. If that’s the case, consider applying for an eldercare loan to cover your costs while you wait. If selling just isn’t an option, consider renting your home (or part of it) to generate funds.

If long-term care is in your future, be aware that Medicare will cover very little of the costs. Unfortunately, that means the majority of the financing must come from you. It’s an expensive proposition, so consider every option available to you, even if that means securing a reverse mortgage or placing your home on the market.

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