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How to Save Money on Long-Term Care
Paying for long-term care can quickly drain a lifetime of savings, but these money-saving tips can lower costs, preserve assets and delay the need for Medicaid
Chris Gash
Key takeaways
- Families can’t avoid the high cost of long-term care, but they can often lower expenses by choosing the right care setting and exploring cost-saving options.
- Selecting a semi-private room and the appropriate level of care can save families thousands of dollars each year.
- Early planning, careful documentation and professional guidance can make qualifying for Medicaid faster and less stressful for families.
When Eileen Kalk’s husband, Tom, 72, was diagnosed with Alzheimer’s disease in 2020, she assumed finding the right long-term care program would be a matter of identifying the best facility. Instead, the semi-retired physician assistant living in Lakeport, California, discovered that affordability — not availability — would become one of her family’s biggest challenges.
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After years of caring for aging parents, Eileen, 70, suddenly found herself navigating the complex and expensive world of long-term care. But like many families, Eileen had to weigh the quality of care against mounting costs and the need to be close enough to visit Tom regularly.
“I looked at home care, but for the number of hours Tom would need with aides, it actually would be more expensive than moving him into long-term care,” says Eileen. She ultimately moved Tom into an older residential memory care community about three and a half years ago, where he continues to receive care as his disease progresses.
Financial reality of long-term care
Eileen Kalk’s experience highlights the difficult financial decisions thousands of caregivers face as they search for quality long-term care options, like nursing homes or memory care units. “The biggest shock isn’t choosing a nursing home — it’s realizing how quickly a lifetime of savings can disappear once long-term care becomes necessary,” says Frank King, assistant teaching professor of health policy and administration at Penn State University.
Eileen Kalk had sticker shock when she started looking at long-term care options for her husband, Tom.
Courtesy Eileen Kalk
The annual cost of a private room in a nursing home is $127,750, a price tag that creates a direct financial burden for many caregivers. Between 2019 and 2024, the cost of long-term care services increased by 23 percent to 48 percent. In contrast, median age 65+ household incomes rose by 22 percent, according to a report by the AARP Public Policy Institute.
Most families pay for long-term care out of pocket. Medicare generally doesn’t cover long-term care, but it may partly cover up to 100 days of nursing care following a qualifying hospital stay if specific medical and doctor’s approval are met.
Medicaid not only provides health coverage for low-income individuals, but it also pays for nursing home care, including room and board. However, applicants must meet strict eligibility and income requirements.
Planning ahead can help. Comparing care options and costs before a crisis can make a meaningful difference. “Assisted living is less expensive than nursing home care, but also, in most states, less closely regulated. Rising prices for both have made affordability a growing challenge as price increases have outpaced Americans’ income growth,” says Alan Weil , senior vice president at the AARP Public Policy Institute.
Everyday ways to lower nursing home costs
While room, board and nursing care account for most long-term care expenses, many families are surprised by the smaller charges that accumulate month after month. From laundry and personal care items to salon services and medical supplies, these routine expenses can add hundreds — or even thousands — of dollars to the annual cost of care.
Reviewing what’s included in your loved one’s monthly bill and looking for opportunities to trim optional expenses can help stretch your budget without compromising quality. While core nursing home fees are typically fixed, some ancillary charges and private-pay rates may be negotiable. Families can ask whether the facility offers move-in incentives or waived community or administrative fees. “It never hurts to ask what financial flexibility may be available,” says Jackie Blew, a nursing home administrator with Eden East Healthcare Management, headquartered in Skokie, Illinois.
Big cost savings to stretch long-term care budgets
Before Medicaid becomes a viable option for covering long-term care costs, there are several ways families can save thousands of dollars a year. Some money-saving options include:
Delay a move to long-term care
“The goal should be to help older adults remain safely and independently at home for as long as possible. That’s where most people want to be, and delaying a move to nursing home care can significantly reduce costs, as long as their care needs can be safely met,” says Bob Etchells, a retired vice president with Presbyterian Senior Living in Pennsylvania.
For many families, combining community-based services can make aging in place both practical and more affordable than private-pay nursing home care.
Experts say families should regularly reassess whether home remains a safe option. Frequent falls, wandering, around-the-clock supervision needs, caregiver burnout or complex medical conditions may signal it’s time to consider assisted living or skilled nursing care. “The goal isn’t to avoid long-term care at all costs, but to make the transition only when it’s truly necessary,” says Blew.
Choose a semi-private room
Opting for a semi-private room instead of a private room can substantially reduce the cost of nursing home care. According to Genworth’s 2024 Cost of Care Survey, the median annual cost of a semi-private room is $111,325, compared with $127,750 for a private room — a difference of $16,425 a year. For families paying out of pocket, those savings can help stretch assets or delay the need to qualify for Medicaid. Before making a decision, ask about roommate matching, room availability and whether a private room could become available later if your loved one’s needs or preferences change.
Consider assisted living versus nursing home
If a loved one doesn’t require 24-hour skilled nursing care, assisted living can be a significantly less expensive option. The median annual cost is about $70,800 — roughly $40,500 less than a semi-private nursing home room.
Blew recommends families consider assisted living first when it’s appropriate. Families can also supplement assisted living with home health aides and companions as care needs increase. But once someone requires extensive around-the-clock care, those additional costs can quickly erode the financial advantage of assisted living. Resources to consider include:
- Home delivery meal services: Programs like Meals on Wheels help ensure older adults are eating healthy meals with regular touch points from volunteers delivering the meals.
- Home care aides and companions: Assist with personal care, meal preparation, medication reminders, housekeeping, transportation and companionship.
- Adult day programs: Offer supervised activities and social engagement while giving family caregivers time to work or recharge.
- Medicare GUIDE program: Available through participating providers in select areas, this program helps people living with dementia and their caregivers coordinate care and access support services. It also includes a flexible respite benefit that may provide $2,500 to $3,000 annually to help pay for respite care and other home-based support.
- Medicaid home- and community-based waiver programs: In many states, these programs help cover home care and other services that support aging in place.
- Community organizations: Area Agencies on Aging, Aging and Disability Resource Centers and senior centers often connect families with free or low-cost local services.
- Faith communities: Churches, synagogues, mosques and other congregations may offer volunteer support, including meals, companionship and help with household tasks.
Explore nonprofit long-term care facilities
When comparing long-term care communities, don’t focus only on the monthly rate. Ask what happens if your loved one outlives their savings.
Some nonprofit providers offer financial flexibility designed to help residents remain in their community as their health and finances change. That may include charitable assistance, access to subsidized housing or the ability to move to a lower-cost level of care within the same organization instead of relocating.
Before signing a contract, ask whether a nonprofit community has a benevolent care or charitable assistance program, accepts Medicaid if residents exhaust their savings and allows residents to transition to different levels of care without leaving the community, says Jon-Paul Venoit, president and CEO of Masonicare, a nonprofit health care organization in Connecticut. “Those policies won’t necessarily lower today’s monthly bill, but they can provide valuable financial protection if circumstances change in the future.”
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