Very few families can privately fund a nursing home indefinitely at $8,000–11,000 a month. The good news is that "the savings are running out" is a solvable problem with a defined ladder of options — if you start climbing it before the account hits zero, not after. Here is the order that works.
1. Confirm what insurance already covers
Long-term-care insurance. If the resident holds a policy, read it now: elimination period (the days you pay before it starts), daily benefit, and whether it requires a certain level of dependency. Claims are slow, so file early. Life insurance may have options too — some policies allow accelerated death benefits or can be converted into a long-term-care benefit. Do not surrender a policy for its cash value without checking these first.
2. Check veterans’ benefits
A wartime veteran or their surviving spouse may qualify for the VA Aid and Attendance pension, an income supplement for those who need help with daily activities. It is under-claimed and can meaningfully extend private funds. It has income and asset tests of its own — and, since 2018, its own look-back — so it is worth checking eligibility early.
3. Use the home’s equity carefully
The house is often the largest asset. Options include renting it out to fund care, a reverse mortgage (viable mainly if a spouse still lives there), or sale. But the home is usually exempt for Medicaid while a spouse lives in it, and selling it converts an exempt asset into countable cash — sometimes the wrong move. Decide the home’s role as part of the Medicaid plan, not separately.
4. Plan the Medicaid transition before you need it
Medicaid pays for the majority of long-term nursing-home care in the US, and most residents reach it eventually. The mistake is treating it as an emergency at $0. The spend-down and 5-year look-back reward planning and punish last-minute gifts, so the transition should be mapped while funds still exist. Two rules save the most money: understand the community-spouse resource allowance before spending anything, and get elder-law advice before transferring any asset.
5. Make sure the home will keep the resident
None of this matters if the home discharges the resident on conversion. Before funds get low, confirm in writing that the home is Medicaid-certified and will keep the resident and convert them. If it will not, start planning a move to one that will now, while you have time to choose well rather than in a crisis.
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A realistic timeline
Ideally you begin this at least six months before private funds run out: file insurance and VA claims, get the elder-law consult, confirm the Medicaid-certified bed, and organise the financial records the application will demand. Families who start early keep more and move less; families who wait until the account is empty often face a rushed, expensive transfer.
Not sure where to start with the paperwork? Curalune Paperwork Help ($249, one-off) maps the exact documents to gather, the right order of steps and ready-to-send messages for your case — delivered within 24 hours.
Frequently asked questions
What happens when a private-pay resident runs out of money?
If the home is Medicaid-certified and the resident is eligible, they convert to Medicaid and stay. If the home is not certified or refuses to hold the bed, the resident may have to move. This is why confirming the Medicaid-conversion promise in writing at admission matters so much.
Can the nursing home evict my parent for running out of money?
Non-payment is a legal ground for discharge, but a Medicaid-certified home cannot discharge an eligible resident simply for converting from private pay to Medicaid. Involuntary discharge requires proper notice and appeal rights.
Should we sell the house to pay for care?
Not automatically. If a spouse lives in it, the home is usually exempt for Medicaid and selling it turns exempt equity into countable cash. Decide the home’s role as part of a Medicaid plan with elder-law advice, not as a standalone step.
How early should we start planning?
At least six months before private funds run low. Insurance and VA claims take time, elder-law planning is most effective before assets are spent, and the Medicaid application needs five years of records assembled.