Paying for Aging Services 

True or False:  

When you need long-term care, the government will pay for it.

False. Wrong answer? You aren't alone. According to a recent AARP survey, 55 percent of American adults thought the same thing. That's why, when it comes to paying for aging services, there are only two things to remember: plan and save.

Proper planning doesn't start in the emergency room or the nursing home. It starts by figuring out your preferences, understanding what needs might arise and learning what the costs might be to pay for the services you will need and want. That may mean meeting with your lawyer, taking a trip to the bank or buying a long-term care insurance policy.

Whatever plan you make, saving is the only way to make it happen. The cost of getting older continues to rise, but if you start saving now, you'll make a smart investment.

But what if you or a loved one has not been able to save enough to cover your needs? Luckily, we live in a country that values older adults and provides a safety net for all Americans. That system, known as Medicaid, is an option. But it's an option only for those who have nothing left to spend.

Here's a general overview of the major aging-services payment options that may help you as you age:  

Private Payment Sources

Long-term care insurance is a type of insurance designed to cover people's care and services costs need as they age. Traditionally, it was used for nursing home costs. Now, it covers a variety of aging services, including assisted living, retirement communities and adult day care.

Long-term care insurance typically pays daily rate to care providers. Because every policy is different, find out exactly what levels of care and services your potential insurers will cover and how far the policy's payment cap might take you before you exhaust the benefit. That way, you can research providers with an open mind, and not a limited budget.  

Public Payment Options 

Medicare is a health insurance program for people over the age of 65 and certain disabled individuals. Medicare covers a limited amount of long-term care, including:  

  • Nursing home care after a hospital stay of at least three days. In addition, this coverage requires substantial insurance co-payments after the first 20 days, and can be used for no more than 100 days.  
  • Short-term services through a home care agency. These can be delivered wherever you live, including an assisted living facility. Medicare does not usually cover assisted living costs.  
  • Homecare only if the elderly individual is homebound and needs therapy or skilled nursing care, according to their physician's plan. Medicare coverage is limited to services that will help an elderly person recover from a medical problem. It may not extend coverage for people with chronic care needs, like those with Alzheimer's disease.  

Medicaid is a program that covers impoverished individuals’ health care costs. Because of high long-term care costs, however, nearly 65 percent of all nursing home residents are Medicaid recipients. In Oregon, Medicaid may pay for in-home services, assisted living/residential care, or nursing home care for individuals that are eligible.

To qualify for Medicaid, you must complete a state application and verify that you no longer have any savings or other assets that you pay for your health care services. Federal policy requires states to examine your financial history for the previous five years to assure you have not transferred assets out of your name to avoid using them for health care costs.

This all may seem confusing, but remember, planning and saving is the only way to keep the most options open for you.   

Helpful Resources 

Benefits CheckUp from the National Council on the Aging
BenefitsCheckUp can help you find programs for people ages 55 and over that may pay for some of their costs of prescription drugs, health care, utilities, and other essential items or services.

Check eligibility for U.S. Government benefits

Medicaid Consumer Information


National Care Planning Council's Guide to Long Term Health Insurance

Financing Long-term Care 101