What Are the Main Ways to Pay for Long-Term Care?

Skilled-nursing-facility care in New York City and the surrounding downstate counties currently approximates $15,000 to $18,000 per month, with private rooms at the upper end and downstate rates materially higher than upstate. Assisted-living-facility care in the metropolitan area runs $7,000 to $10,000 per month and is generally not covered by Medicaid — assisted living is a private-pay environment in New York with limited exceptions for specific Medicaid-licensed programs.

Home care, delivered through CDPAP or a Licensed Home Care Services Agency, runs $20 to $25 per hour. Live-in 24-hour care (one aide per 24-hour period, sleeping at the residence) approximates $400 to $500 per day. Split-shift 24-hour care (two aides per day, both awake) is more expensive and more frequently denied at the authorization stage. The Medicaid-funded path through Managed Long-Term Care authorizes hours based on a medical assessment, which the family and counsel sometimes have to dispute to obtain the actually-needed hours.

These numbers compound rapidly. A two-year nursing-home stay at downstate rates approximates $400,000. A five-year home-care arrangement at 12 authorized hours per day approximates $550,000. Long-term care is generally the largest single financial exposure a senior household will face — larger than the home, larger than retirement savings, larger than any individual healthcare cost prior to the care episode itself.

For the majority of New York households, Medicaid under SSL § 366 is the only realistic payment channel for sustained long-term care. The program covers nursing-home care (institutional Medicaid) and home-based care (community Medicaid), with separate eligibility tracks for each. Medicaid is means-tested — countable resources must be at or below approximately $30,000 to $32,000 for an individual (with spousal impoverishment rules dramatically expanding what the community spouse can keep), and monthly income must fall within the program's income test or excess income must be diverted through a pooled income trust.

Institutional Medicaid is subject to the 60-month look-back under 42 USC § 1396p(c). Any uncompensated transfer made in the 60 months before application creates a transfer penalty calculated by dividing the transferred value by the regional cost of care. Community Medicaid has a separate 30-month look-back enacted in 2020 that has not yet been enforced, though enforcement remains a year-by-year question.

Medicaid asset-protection planning — principally through a Medicaid Asset Protection Trust under EPTL Article 7 — is the structural tool that allows a household to qualify for institutional Medicaid while preserving a meaningful portion of its assets. The MAPT must be funded at least 60 months before institutional Medicaid application, which is why early planning is materially more valuable than crisis planning.

Long-term care insurance is a private-market product that pays a daily or monthly benefit toward the cost of care once the insured meets the policy's benefit triggers (typically inability to perform two of six activities of daily living, or cognitive impairment requiring substantial supervision). Policies vary widely on benefit amount, benefit period, elimination period, and inflation protection. The best time to buy is in the 50s, when premiums are affordable and underwriting is achievable; by the late 60s, premiums are prohibitive and underwriting is frequently impossible.

New York operates a Partnership for Long-Term Care program that combines a qualifying private LTC policy with enhanced Medicaid asset protection. A Partnership-qualified policy provides dollar-for-dollar resource disregard at Medicaid application — meaning resources up to the amount paid out by the policy do not count against the Medicaid resource limit. For households that purchase coverage in the 50s, the Partnership program offers a hybrid path that bridges private insurance and eventual Medicaid eligibility.

Existing policies should be reviewed for benefit adequacy. A policy purchased in the 1990s with a $100 per day benefit is now hopelessly inadequate against $500-per-day nursing-home costs. Inflation protection riders, where included, may have built the benefit up; where omitted, the policy may pay only a fraction of actual cost. We routinely review existing policies and identify the gaps before crisis arrives.

Wartime-era veterans (and surviving spouses) who require help with activities of daily living are eligible for the VA Aid and Attendance pension — a monthly cash benefit layered on top of the base VA pension. Eligibility requires wartime service (at least one day during a recognized wartime period), an honorable discharge, a current need for assistance with ADLs or cognitive supervision, and net worth below a published cap (currently in the range of $155,000, indexed annually).

Aid and Attendance has a three-year look-back for transfers (separate from and shorter than the Medicaid look-back). Uncompensated transfers within the three-year window create a penalty calculated against the maximum annual pension rate. The planning for Aid and Attendance overlaps with Medicaid planning but follows different rules, and a single transfer can be Medicaid-compliant while triggering a VA penalty (or vice versa).

Aid and Attendance combines well with community Medicaid for veterans staying at home and with institutional Medicaid for veterans entering a nursing facility. The benefits stack — the VA pension is not counted against the Medicaid income limit in most configurations, and the Medicaid coverage absorbs the costs above what the VA pension provides. We coordinate VA and Medicaid planning so the household captures both benefits cleanly.

Medicare does not cover long-term care in any meaningful sense. Medicare Part A covers up to 100 days of skilled nursing facility care following a qualifying inpatient hospital stay, with full coverage for the first 20 days and a significant copay for days 21 through 100. Medicare covers home health on a limited basis tied to a skilled-care need following acute illness. Neither program covers custodial care, assisted living, or sustained home care unrelated to acute medical episodes. Medicare is a payment channel for the first few weeks after hospitalization, not for sustained long-term care.

Private pay — using the senior's own assets — is the realistic option for high-net-worth households where the care episode is expected to be short or where the senior strongly prefers to keep family members from being involved in Medicaid planning. The math has to work: a $3 million net worth can sustain three to five years of private nursing-home pay before reaching Medicaid-eligible asset levels. Below that threshold, private pay generally exhausts the household before the care episode ends.

Home-equity products — reverse mortgages, home-equity lines of credit, and bridge loans — can fund care while the household pursues Medicaid eligibility or transitions to a long-term plan. A reverse mortgage under the FHA Home Equity Conversion Mortgage (HECM) program produces tax-free income that does not affect Medicaid eligibility (though it does increase countable resources if cash accumulates). The structures are complex and carry their own costs; we counsel against them as primary funding but recognize their utility as bridge financing.