How to Pay for Aging Care
elder woman looking at younger woman
Most of us don’t like to think about it, but the reality is that many people will need some form of care as they age. Whether due to illness, disability, or simply the natural progression of aging, the need for daily assistance can arise—often sooner than expected. Understanding what Long Term Care entails, how much it costs, and how to plan for it can make a significant difference for your financial future and give you peace of mind.
Quick Answers
There are three answers to the question “How do you pay for aging care?” (Or “Long Term Care”):
I or my family pays for it - Personal Funds, such as savings or income
The government pays for it - Government Programs, like Medicaid, Veteran’s Programs, etc
Other entities pay for it - including Long Term Care Insurance, Life Insurance Hybrid Policies, Annuities, Reverse Mortgages, etc
But what if you are not in a position to financially pay for Long Term Care? We will discuss more below. Let’s get into it! But first…
What Is Long Term Care?
Long Term Care refers to a variety of services that help individuals with chronic illnesses or disabilities meet personal needs over an extended period of time. These services go beyond medical care and are often focused on helping individuals perform what are known as Activities of Daily Living (ADLs). ADLs is a term defined by the government for the sake of evaluating the need for Long Term Care. These activities are:
Ambulating
Bathing / Grooming
Toileting
Dressing
Transferring
Eating
While medical services may be part of Long Term Care, much of the support people require is non-medical. According to Medicaid, Long Term Care is needed when a person’s condition requires “nursing facility level care,” though that definition can vary depending on state regulations.
Types of Long Term Care
Long term care is not limited to nursing homes. Many people begin receiving assistance in their own homes. This is often referred to as “aging in place,” and can involve help from family members, friends, or professional caregivers. Services provided might include personal care, companionship, household chores, and occasional medical visits.
Some families rely on community-based care, such as adult day care centers or senior centers. These programs are designed to supplement home care by offering meals, transportation, exercise, and social activities during the day.
For individuals who need more comprehensive assistance, residential care options such as adult foster homes, assisted living facilities, and nursing homes are available. These environments often provide round-the-clock supervision, personal care, medical services, and in some cases, memory care for those with dementia.
How Likely is it that I or My Family Member will Need Long Term Care?
While some people may never need long term care, the odds are higher than many assume. Statistically, individuals over the age of 65 have about a 70% chance of needing some form of long term care in their lifetime. Even among the general population, estimates suggest that 40% to 60% of people will eventually need assistance.
Healthy living can certainly reduce the risk. Staying active, maintaining a nutritious diet, avoiding tobacco, limiting alcohol, having regular medical checkups, and keeping a safe home environment all contribute to healthier aging. Still, no lifestyle is a guarantee against the physical or cognitive decline that might require long term support.
What Does Long Term Care Cost in Virginia?
Long term care can be expensive—especially if it extends over several years. In Virginia, the average annual cost for a private room in a nursing home is around $117,000. See below for an estimate of the options:
Nursing Home (Private Room)
Virginia State Average - $117,019
Alexandria-Arlington Average - $170,440
Blacksburg-Christiansburg-Radford Average - $109,045
Assisted Living (Private Room)
Virginia State Average - $67,741
Alexandria-Arlington Average - $88,958
Blacksburg-Christiansburg-Radford Average - $75,715
Home Care (44 hours a week)
Virginia State Average - $58,837
Alexandria-Arlington Average - $68,301
Blacksburg-Christiansburg-Radford Average - $65,169
Home Care offers a more budget-friendly option, averaging around $59K per year. Even this, however, can strain retirement savings if extended care is needed for several years. Most families rely on a mix of funding sources to cover long term care costs. Some pay out of pocket using savings or retirement income. Others turn to private options such as long term care insurance, life insurance hybrid policies, annuities, or even reverse mortgages.
Paying for Long Term Care with Personal Funds
The cost of Long Term Care is exorbitant. And it is only going to get more expensive as the results of the health care worker scarcity continues to unfold. Our estate planning lawyers would highly encourage putting your assets in a trust as a way to steward and protect your wealth.
We would recommend that you make the most of your personal funds by using them as the first part of a Two-Part strategy that includes the government paying for Long Term Care. You can learn more about our Two-Part strategy in the section below: “Government Programs for Long Term Care”.
Government Programs for Long Term Care
Government programs can also provide assistance. Medicaid is the most common source of help for low-income individuals or those who have exhausted their assets. Veterans’ programs may offer support for eligible service members and their families.
The Medicare Misconception
Chart showing what Medicare covers and what Medicaid covers
A common misconception is that Medicare covers long term care. While Medicare offers health coverage for those over 65, it does not cover custodial care—meaning the daily assistance with activities like bathing, dressing, or eating that many seniors eventually need. Medicare may cover a short stay in a skilled nursing facility following a hospital stay, but not ongoing long term care.
Qualifying for Medicaid Long Term Care
Medicaid can cover long term care costs, but eligibility requires both medical and financial qualification. Medically, an individual must require help with at least two Activities of Daily Living. Financially, the applicant must typically have no more than $2,000 in countable assets, including retirement accounts and jointly held spousal resources.
Applicants should also be aware of the “five-year look-back” period. If assets were transferred or gifted within five years before applying, the applicant may be disqualified from receiving benefits for a period of time. This rule exists to prevent people from giving away their property to qualify for Medicaid artificially.
Medicaid Planning: Pre-Planning vs. Crisis Planning
Ideally, families should start planning for long term care well in advance. Pre-planning strategies might include creating a specialized Power of Attorney that authorizes asset protection measures or establishing a Medicaid Asset Protection Trust. When assets are transferred into such a trust at least five years prior to applying for Medicaid, they are not counted toward eligibility. The trust can even hold a family home, allowing the individual to continue living there while preserving the asset for their heirs.
In cases where planning was not done in advance, crisis planning can help. For unmarried individuals, this might involve transferring half of their assets and using the remaining half to pay for care during the resulting penalty period. For married couples, Medicaid rules allow for certain exemptions and protections for the healthy spouse. These include the Community Spouse Resource Allowance (CSRA) and the Minimum Monthly Maintenance Needs Allowance (MMMNA), which are designed to prevent the non-applicant spouse from being impoverished.
Not Making a Plan is Still a Plan…
Planning for long term care is not just a legal or financial task—it’s a family matter. Taking the time to assess needs, understand options, and speak with an elder law professional can prevent crisis situations and protect your family’s future. Establishing a strong estate plan, putting a Power of Attorney in place, and talking openly with loved ones are vital steps.
In the end, not making a plan is still making a plan—just not a good one. The earlier you begin, the more choices you’ll have and the more secure your future will be.
Need help navigating long term care planning?
Our experienced elder law attorneys are here to guide you through Medicaid planning, asset protection, and long term care options. Contact us today to schedule a consultation and start your planning with confidence.
