How to Pay for Memory Care When You Can’t Afford It

The national median cost of memory care in the United States is $5,500-7,000 per month. For most families, that number is a gut punch.

The reality is that very few families can sustain that cost from savings alone for the length of time memory care is typically needed (often two to five years or more). But there are real funding paths available to most families — they just require planning, paperwork, and often professional help to navigate.

This guide covers the five most common funding approaches honestly, including their limitations.

1. Medicaid (The Primary Long-Term Funding Path)

Medicaid is the federal-state program that funds long-term care for those who qualify financially. It is the primary way that most American families ultimately fund nursing home and memory care costs.

The challenge: Medicaid has strict financial eligibility requirements. In most states, a single person can have no more than $2,000 in countable assets to qualify. For married couples, the rules are more complex — a “community spouse” (the spouse still living at home) can retain more assets under Medicaid’s spousal protection rules.

The path to Medicaid typically involves a “spend-down” — using assets to pay for care until you reach the eligibility threshold. This process can be planned strategically with an elder law attorney to protect as many assets as possible for the community spouse and family — but it must be done correctly and in advance. Medicaid has a five-year “look-back” period that examines asset transfers.

Getting on Medicaid is not simple or fast. Start the planning process early — ideally 18-24 months before you expect to need it.

2. Long-Term Care Insurance

If your loved one purchased long-term care insurance before their diagnosis, it may cover memory care costs. Review the policy carefully.

Key things to understand in the policy: the daily or monthly benefit amount, the elimination period (the waiting period before benefits begin, typically 30-90 days), whether it covers memory care specifically (most modern policies do), the benefit period length, and whether it has inflation protection.

File the claim as soon as care begins — elimination periods are counted from the date of claim, and delays cost money. The insurance company will typically require physician certification of the need for care.

If you can’t find the policy or aren’t sure what it covers, an elder law attorney or insurance specialist can help you review it.

3. Veterans Benefits (Aid and Attendance)

The VA’s Aid and Attendance pension is one of the most underutilized benefits available to caregiving families. It provides monthly payments to eligible veterans and their surviving spouses who require the assistance of another person with daily activities — which includes memory care.

Eligibility requires: wartime service (including during peacetime periods designated as “wartime” by the VA), financial eligibility (income and asset limits), and a medical need for assistance.

The benefit amounts (as of 2025) are approximately $2,300/month for a veteran, $1,450/month for a surviving spouse.

The application process is complex and benefits from professional help. A VA-accredited attorney or claims agent can assist — look for ones who charge no upfront fees (the VA limits what they can charge).

Help me figure out what we qualify forFind an elder law attorney near me

4. Bridge Loans and Life Insurance Options

Several financial products exist specifically to bridge the gap while waiting for Medicaid approval or insurance benefits to begin.

Long-term care bridge loans are short-term loans secured against home equity or other assets, used to fund care while longer-term solutions are established.

Life insurance policy conversion — some life insurance policies can be converted or surrendered for cash value, or sold through a “life settlement” for a lump sum. For policies with long-term care riders, these may be activated.

Reverse mortgages — for married couples where the community spouse owns a home, a reverse mortgage can provide income to fund care costs. This has significant implications for estate planning and should be discussed with a financial advisor.

5. Private Pay (And How Long It Lasts)

Many families begin by paying privately. It is worth being realistic about how long savings can sustain this.

At $6,000/month, $100,000 in savings lasts approximately 17 months. At $72,000/year, the math is unforgiving.

This isn’t an argument against private pay — it is often necessary and appropriate as a starting point. But it is an argument for beginning Medicaid planning and exploring other options simultaneously, not after savings are depleted.

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