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Unlocking the maze

A guide to financing long-term care for seniors and caregivers

Form The National Institute on Aging

Paying for long-term care can be a significant concern for older adults and their caregivers. To cover these expenses, individuals often rely on a combination of personal funds, government programs and private financing.


Initially, many seniors use their personal savings, retirement funds, investment income or proceeds from selling their homes to cover these costs. Home-based care, such as in-home caregivers, often is paid for using personal funds. While family and friends may provide some care initially, as needs increase, paid services may become necessary. Seniors also may pay for community-based services like adult day programs out of pocket.


Medicare: Medicare helps cover medical costs for individuals aged 65 and older, as well as those under 65 with specific disabilities or health conditions. It covers services like hospital stays, doctor visits, some home health care, hospice care, and preventive services. However, it does not cover assisted living or long-term care.

Medicaid: Medicaid is a joint federal and state program designed for low-income individuals. It covers medical care and certain types of long-term care for those who meet income and eligibility requirements. Medicaid benefits and eligibility criteria can vary by state.

State Health Insurance Assistance Program (SHIP): SHIP is a national program available in each state that provides one-on-one counseling and assistance related to Medicaid, Medicare and Medicare supplemental insurance (Medigap). SHIP can help individuals navigate eligibility, coverage, appeals, and out-of-pocket costs. For more info about SHIP in Mississippi, call 1-844-822-4622.

Department of Veterans Affairs: The VA offers coverage for long-term care at facilities or at home for eligible veterans. Eligibility criteria and availability may vary, and there may be waiting lists for VA nursing homes. To learn more, call 877- 222-8387 or visit the Veterans Health Administration website or the Veterans Affairs Caregiver Support page.

Social Security Administration Programs: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) provide financial assistance to individuals with disabilities. SSDI is for those under 65 who meet specific criteria, while SSI offers monthly payments to adults age 65 and older with disabilities. To learn more, call (800) 772-1213, (800) 325-0778 or visit the Social Security Administration website.

National Council on Aging: NCOA offers a free service called BenefitsCheckUp, helping individuals find federal and state benefit programs for older adults. It includes programs that cover prescription drugs, heating bills, housing, meal programs and legal services. To learn more, visit This website provides information about federal, state, and local government benefits, offering a comprehensive resource for benefit programs.


Long-Term Care Insurance: These policies cover a range of long-term care services, including assistance with daily activities and palliative care. Policies can vary, covering services in various settings such as home care, assisted living, or nursing homes. Costs depend on factors like the type of policy, age at purchase, and optional benefits.

Reverse Mortgages: A reverse mortgage allows homeowners aged 62 or older to convert a portion of their home equity into cash without selling the home. The loan does not require repayment until the homeowner sells, moves out or passes away.

Life Insurance Policies: Some life insurance policies offer accelerated death benefits, providing tax-free cash advances while the policyholder is alive. These advances are deducted from the final insurance payout. Viatical settlements also allow terminally ill individuals to sell their life insurance policies for immediate cash.

Annuities: Annuity contracts with insurance companies can help cover long-term care expenses by providing regular payments over a specified period. Annuities can have tax implications and should be discussed with a tax professional.

Trusts: Trusts are legal arrangements that allow individuals to transfer assets to a trustee, who manages them for the beneficiary’s benefit. Trusts can provide flexible control of assets for older adults or those with disabilities.


Family caregivers often face financial challenges due to caregiving responsibilities. Some states offer payment to family caregivers through Medicaid and other state programs. Eligibility criteria and funding for these programs vary by state. Medicaid may provide financial assistance for caregiving services, and veterans and individuals with specific diseases also may be eligible for support through federal, state, or private organizations.

When it comes to long-term care financing, it’s essential to explore various options based on individual circumstances, such as age, health and financial resources. Choosing the right approach can help ensure access to necessary care while protecting financial stability.

The National Institute on Aging leads a broad scientific effort to understand the nature of aging and extend the healthy, active years of life. NIA is the primary federal agency supporting and conducting Alzheimer’s disease research. Learn more at

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