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Let’s say your mother — call her Linda — just moved into a nursing home. The bill lands: about $9,000 a month. You do the math on her savings and your stomach drops. At that rate, she’s out of money in a year.
It’s a hypothetical, but the numbers are painfully real. The 2025 CareScout Cost of Care Survey puts the median nursing home at roughly $9,600 a month for a semi-private room — about $115,000 a year — and closer to $10,800 a month for a private one (1).
And here’s the gut-punch most families don’t see coming: Medicare doesn’t pay for this. It covers short rehab stays, but not the ongoing custodial care — help with bathing, dressing, eating — that a nursing home mostly provides (2). About 70% of people turning 65 will need some long-term care in their lives, so this is not a rare bad-luck story (3).
I’ve been a CPA since 1981. So let me answer Linda’s family’s real question — who pays? — and walk through the six moves that matter, in order.
1. Know the three ways the bill actually gets paid
There are really only three sources: Linda’s own money, long-term-care insurance (if she bought it years ago), or Medicaid once her savings are largely gone. Medicare isn’t on the list (2).
Most families discover this at the worst possible moment. Knowing it now — before a crisis — is what gives you time to plan instead of just react.
2. If she owns a home, that equity is a tool
When someone needs care but their cash is tied up in the house, home equity can bridge the gap — especially if a spouse is still living there.
One solution might be a reverse mortgage.
The most common reverse mortgage myth is that the bank takes your house. The truth: with a reverse mortgage, you keep the title and stay in your home. The loan simply lets you spend the equity you’ve spent decades building — now, when you need it.
A reverse mortgage isn’t for everyone, but if you’re 62 or older and own your home, check it out. For example, Longbridge Financial — a top-rated reverse mortgage lender — offers a free quote showing exactly what you’d qualify for. A licensed specialist then explains what it costs, how repayment works, and what it means for your heirs.
Straight answers, no obligation. Get the facts in about two minutes.
3. Protect the healthy spouse before you spend a dime down
Here’s the part that saves families: when one spouse needs Medicaid and the other is still at home, federal rules let that “community spouse” keep a protected share of the couple’s assets — tens of thousands of dollars, up to roughly $160,000 in 2026 by the American Council on Aging’s reading of the limits — plus, often, the house and a car.
So “spend it all down” is usually wrong advice. Don’t drain accounts or hand money to the nursing home before you understand what the well spouse is legally allowed to keep.
4. Respect the five-year look-back
Medicaid reviews the last five years of financial moves. Giving away money or property to qualify can trigger a penalty period where Medicaid won’t pay — exactly when you need it most.
This is why do-it-yourself Medicaid planning backfires so often. The instinct to “gift the house to the kids” is the single most expensive mistake I see.
One thing before we keep going — the financial world is louder and dumber than ever. Hot takes everywhere. Almost none of it is worth your time. I’ve spent 35+ years cutting through the noise so you don’t have to. Sign up for the free Money Talks Newsletter — 10 seconds, no spam, just the stuff that matters.
5. If it’s not your turn yet, insure against it while you can
Insurance can’t help Linda now — but it can keep you from being Linda. This is the move to make in your 50s or early 60s, not your 70s.
According to government data, about 7 in 10 people turning 65 will need some form of long-term care. And Medicare doesn’t cover custodial care — the day-to-day help with things like bathing and dressing — which can leave families facing six-figure bills that eat into retirement savings.
Long-term care insurance helps fill that gap, covering services like home care, assisted living, and help with daily tasks. Rates are typically lowest if you buy in your 50s or early 60s, couples often qualify for discounts, and premiums may even be tax-deductible.
Check it out. Click here for a list of the best LTC insurance companies — takes 2 minutes.
6. Get an expert before you make an irreversible move
Between Medicaid rules, the look-back, and the spousal protections, this is not a place to guess. An elder-law attorney and a good financial advisor can save a family far more than they cost.
To find a fiduciary financial advisor check out SmartAsset. They instantly matches you with up to three fiduciary advisors — legally required to prioritize your interests. They spot tax savings, Social Security strategies, and planning gaps you’d never see alone. $100K+ in investments? Get matched free in minutes. The match is free and so is a first appointment.
My honest take
If Linda’s family is reading this in a panic, take a breath. The worst decisions in a care crisis are the fast ones — the drained account, the house signed over, the check written to stop the bleeding. Slow down and get advice first; the money you protect may be the healthy spouse’s whole future.
And if your parents are still healthy, this is your reminder to ask the uncomfortable questions now, while everyone can think clearly. Where’s the house titled? Is there any coverage? What are their wishes?
Handled early, long-term care is a plan. Handled in a panic, it’s the thing that quietly takes down two people instead of one.
Sources
1. CareScout / Genworth; 2. Medicare.gov; 3. Administration for Community Living; 4. American Council on Aging
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