How Veterans Can Pay for Long-Term Care: VA Benefits, Medicaid, and Insurance

Long-term care is one of the largest expenses most Americans will face in retirement, and veterans are no exception. A private nursing home room costs an average of over $131,000 per year. Assisted living averages around $64,000 per year. Even in-home care can cost $30,000 to $70,000 or more annually depending on the level of support needed. For veterans, the good news is that there are more payment options available than for the general population. This guide covers every major way veterans can pay for long-term care, from VA benefits and the Aid and Attendance pension to Medicare, Medicaid, long-term care insurance, and personal resources.

VA Long-Term Care Benefits

The Department of Veterans Affairs offers the most comprehensive set of long-term care benefits available to veterans. Through its geriatrics and extended care programs, the VA provides nursing home care in Community Living Centers, home-based primary care, homemaker and home health aide services, adult day health care, and community residential care. These programs are available to enrolled veterans based on clinical need, service-connected disability, and financial status.

For veterans with a service-connected disability rating of 70 percent or higher, the VA is required by law to provide nursing home care at no cost. Veterans who need care for a service-connected condition are also provided care at no charge. For other enrolled veterans, VA long-term care is available based on clinical need, but copays may apply. Even with copays, the cost is typically far less than private-market rates.

To access VA long-term care, you must be enrolled in VA health care. Speak with your VA primary care provider or a VA social worker to discuss your needs and begin the referral process. Availability varies by location, and some programs have waiting lists, so planning ahead is important.

Aid and Attendance Pension

The VA Aid and Attendance pension is one of the most valuable and underused benefits for paying for long-term care. This enhanced pension provides additional monthly income to wartime veterans and surviving spouses who need help with activities of daily living. Unlike VA health care benefits, Aid and Attendance payments go directly to you and can be spent on any type of care or expense you choose.

Maximum monthly payments with Aid and Attendance range from approximately $1,432 for a surviving spouse to approximately $2,642 for a veteran with a spouse. These amounts can add $17,000 to $31,000 per year to your income, which can cover a significant portion of in-home care costs or supplement other payment sources for assisted living or nursing home care.

To qualify, you must have served during a wartime period, meet income and net worth limits (net worth must be at or below $150,538 in 2026), and demonstrate a need for regular assistance. The three-year look-back period for asset transfers prevents applicants from giving away assets to qualify. Processing times range from 6 to 12 months, so apply as early as possible.

Medicare's Limited Role in Long-Term Care

Many people assume that Medicare will cover long-term care, but this is one of the most common misconceptions in health care planning. Medicare is designed to cover acute medical care, not ongoing custodial assistance. Its role in long-term care is very limited.

Medicare Part A covers up to 100 days of skilled nursing facility care per benefit period, but only after a qualifying three-day hospital stay and only when you need daily skilled care such as nursing or physical therapy. For days 1 through 20, Medicare pays the full cost. For days 21 through 100, there is a daily coinsurance of $204.50 in 2026. After day 100, Medicare stops paying entirely.

Medicare also covers limited home health services when you are homebound and need skilled nursing care or therapy. However, it does not cover 24-hour home care, homemaker services, or personal care assistance when that is the only type of help you need. Medicare does not cover assisted living, adult day care, or any form of long-term custodial care. For veterans, Medicare serves as a useful bridge during the first 100 days after a hospitalization but should not be counted on for ongoing long-term care needs.

Medicaid for Long-Term Care

Medicaid is the single largest payer of long-term care in the United States, covering nursing home care for people who meet strict income and asset requirements. For veterans who have exhausted their savings paying for care, Medicaid can serve as a safety net that covers the cost of a nursing home indefinitely.

To qualify for Medicaid nursing home coverage in most states, a single individual must have countable assets of $2,000 or less and income below the state's threshold. Your primary residence, one vehicle, personal belongings, and certain other assets are typically exempt. If your assets exceed the limit, you must spend down by paying for care, medical expenses, or other allowable costs until you reach the threshold.

Medicaid applies a five-year look-back period for asset transfers. If you gave away money or property within five years of your Medicaid application, the state may impose a penalty period during which Medicaid will not cover your nursing home costs. This is stricter than the VA's three-year look-back period. Planning for Medicaid eligibility should start years in advance, ideally with the guidance of an elder law attorney who understands both Medicaid and VA benefits.

Many states also offer Medicaid waiver programs that pay for home and community-based services such as home care, adult day care, and assisted living. These programs can help veterans stay out of nursing homes while receiving the care they need. Availability and eligibility rules vary by state.

Long-Term Care Insurance

Private long-term care insurance is designed specifically to cover the costs that Medicare, Medicaid, and VA benefits may not fully address. A good LTC insurance policy can pay for nursing home care, assisted living, in-home care, and adult day care, giving you the flexibility to choose where and how you receive care.

The cost of LTC insurance varies widely depending on your age at purchase, health status, the daily benefit amount, the benefit period, and other features. Premiums typically range from $950 to $7,000 or more per year. The best time to buy is in your mid-50s to early 60s, when you are more likely to qualify medically and premiums are more affordable. Waiting too long risks being declined for coverage due to health conditions.

For veterans, LTC insurance makes the most sense if you do not have a high service-connected disability rating and therefore are not guaranteed VA nursing home care. It is also valuable if you want the option of receiving care at a private facility closer to your family rather than at a VA Community Living Center. Even with VA benefits, LTC insurance can fill gaps and provide additional resources for more comprehensive care.

Hybrid Life Insurance and Long-Term Care Policies

Hybrid life insurance and long-term care policies have become increasingly popular as an alternative to traditional LTC insurance. These products combine a life insurance policy with a long-term care benefit. If you need long-term care, the policy pays for it by accelerating or redirecting the death benefit. If you never need care, your beneficiaries receive a death benefit when you pass away.

The main advantage of hybrid policies is that your money is never wasted. With traditional LTC insurance, if you never need long-term care, you pay premiums for years and receive nothing in return. With a hybrid policy, there is always a benefit, either for care or as a death benefit. Some hybrid policies also offer a return-of-premium feature, allowing you to get your money back if you change your mind.

Hybrid policies typically require a larger upfront premium than traditional LTC insurance, often paid as a single lump sum or over a short payment period. They may be a good fit for veterans who have savings they want to reposition for potential long-term care needs while preserving a death benefit for their family.

Personal Savings, Home Equity, and Other Resources

Many veterans and their families ultimately use personal resources to pay for some or all of their long-term care. This includes savings accounts, retirement funds, investment portfolios, and home equity. While not ideal, self-funding is the reality for many people who do not have insurance or whose benefits do not cover the full cost of care.

Home equity can be accessed through selling the home, a home equity loan or line of credit, or a reverse mortgage. Reverse mortgages are available to homeowners age 62 and older and allow you to borrow against your home's value without making monthly payments. The loan is repaid when you sell the home or pass away. This option can provide funds for in-home care or other long-term care costs, but it reduces the inheritance you leave to your heirs and should be considered carefully.

Retirement accounts such as 401(k) plans and IRAs can also be drawn upon to pay for care, though withdrawals are subject to income tax. Some states offer tax deductions or credits for long-term care expenses, which can offset a portion of the cost. Social Security benefits and any military pension income also contribute to covering care expenses.

Coordinating Multiple Payment Sources

In practice, most veterans use a combination of payment sources to cover long-term care costs over time. A typical scenario might begin with Medicare covering the first 100 days after a hospital stay, followed by VA benefits or long-term care insurance covering ongoing care, and eventually Medicaid stepping in if assets are depleted. Understanding how these sources work together, and in what order to use them, is essential for maximizing your benefits and preserving your financial security.

The VA's Aid and Attendance pension can be used alongside other payment sources. For example, you might receive Aid and Attendance payments while also using long-term care insurance or personal savings to cover the remainder of your care costs. However, if you are receiving Medicaid-funded nursing home care, your VA pension payments may be reduced.

Long-term care insurance benefits are generally paid regardless of what other benefits you receive, making them one of the most flexible payment sources. LTC insurance does not affect your VA benefits, Medicare, or Medicaid eligibility in most cases.

Planning is the most important factor in successfully coordinating these benefits. A financial advisor or elder law attorney who understands VA benefits, Medicare, and Medicaid can help you create a long-term care funding plan that takes advantage of all available resources. Starting this planning process in your 50s or 60s, well before you need care, gives you the most options and the best chance of protecting your assets and ensuring quality care.

Veterans have access to more long-term care payment options than most Americans. From VA long-term care programs and the Aid and Attendance pension to Medicare, Medicaid, private insurance, and personal resources, there are multiple tools available to cover the costs of care. The challenge is understanding how each option works, who qualifies, and how to combine them effectively. By learning about these options now and planning ahead, you can reduce the financial burden of long-term care and focus on getting the best possible care for yourself or your loved one.