Who Will Pay for Long-Term Care? What Families Should Understand Before a Crisis

 Posted on October 29, 2026 in Estate Planning

An elderly person may fall down and break their hip, or they may experience a stroke. They may encounter other health issues that could make it difficult to meet their own needs. In these situations, a person may no longer be able to live independently, and they may need help around the clock. In many cases, these situations develop in a matter of weeks, and families may find themselves touring nursing homes while trying to figure out how to pay for one. Without proper planning, the money a couple has saved, their family home, and a spouse's financial future could all be at risk.

When a person needs long-term care, a family will need to determine how these expenses will be paid. In some cases, the person receiving care will be required to use their own income and savings to cover expenses. Medicare may provide some coverage, and Medicaid benefits may also be available. Long-term care insurance can sometimes fill gaps, but only if it was purchased years earlier. Steps can be taken to protect assets while addressing long-term care expenses, but it is important to begin planning ahead of time. An attorney can provide guidance on the options for planning and asset protection that are available.

How Much Does Long-Term Care Cost in Illinois?

Long-term care may involve help with regular activities like getting dressed, eating meals, and moving around safely. While a person may receive care in a nursing home or assisted living facility, care can also be provided in the home.

According to the 2025 CareScout Cost of Care Survey, the national median price for a semi-private nursing home room is about $9,581 per month, which adds up to nearly $115,000 per year. A private room may cost about $130,000 per year. In Illinois, the costs of nursing home care is around $8,300 per month for a semi-private room or $9,300 for a private room.

The costs of other types of care also add up quickly:

• In-home care from a home health aide can cost nearly $7,000 per month.

• Assisted living in Illinois has a median cost of about $6,200 per month.

• Adult day programs may be the most affordable option, averaging around $2,000 per month in Illinois, but they will only provide care during daytime hours.

How Fast Can These Costs Drain a Family's Savings?

Consider a widowed homeowner in Yorkville who has $200,000 in savings who moves into a nursing home that costs $8,000 per month. Even with Social Security and a small pension covering part of the bill, their savings account could be gone in less than two years. Many people will need care for much longer.

For married couples, the risks can be even greater. When one spouse stays home while the other begins living in a nursing home, the couple’s retirement savings can quickly disappear, and other assets may be used up to pay for ongoing expenses.

What Are the Ways to Pay for Long-Term Care?

Families generally rely on four sources to pay for care, and each works very differently.

Paying Privately

A person may use their own money to pay for the costs of a nursing home. This may include savings, retirement accounts, pension income, or proceeds from selling a home. This may offer the most freedom to choose where a person will receive care, but the downsides are obvious. Decades of savings may be used up in just a few years, leaving little or nothing for a person’s surviving spouse or children.

Long-Term Care Insurance

Some insurance policies may provide a set amount that can be used to pay for long-term care costs. Most policies have a waiting period of around 90 days before benefits begin. Policies may also cap how much they will pay per day and in total.

This type of insurance can be very helpful, but it has limits. Premiums can be expensive, and they may rise over time. A person will generally need to buy a policy while they are still healthy. Someone who has already been diagnosed with dementia or another serious condition will likely be turned down.

Medicare

Many elderly people rely on Medicare, the federal health insurance program that provides benefits for people 65 and older. Families may assume that Medicare will pay for a nursing home. In reality, Medicare will generally only cover short-term skilled care, such as physical therapy after a hip replacement.

To qualify for Medicare benefits, a person will usually need to be admitted to a hospital and stay for at least three days. They will need to receive daily skilled nursing or rehab services. Medicare may pay for the first 20 days in a skilled nursing facility. For days 21 through 100, the patient will be required to pay a daily copay, which is $217 per day in 2026. After day 100, Medicare will no longer provide coverage.

Medicare does not cover custodial care, including help with bathing, dressing, eating, and other daily tasks. These forms of care are what elderly people will need when they reside in nursing homes or receive other forms of long-term care. For these reasons, Medicare usually is not a solution for people who need long-term care.

Medicaid

People with limited income and assets may be eligible to receive Medicaid benefits. Medicaid can provide coverage for long-term care, but a person will only qualify for these benefits if the total assets they own are below a certain threshold.

As of October 2026, an unmarried Illinois resident who receives Medicaid long-term care benefits generally cannot have countable assets that total more than $17,500. These assets may include bank accounts, investments, and most property other than a primary home, one vehicle, and certain personal items.

Many people will only be able to qualify for Medicaid after a spend-down of their assets. The money they have saved may need to be used to cover the costs of a nursing home or other forms of care until their countable assets fall below the threshold. However, planning ahead can help a person protect against the loss of their assets while ensuring that they will qualify for Medicaid.

Does a Spouse Have to Go Broke Before Medicaid Will Pay for Long-Term Care?

No. A husband or wife who stays at home will have some protections to prevent them from using up their savings when the other spouse receives long-term care. As of January 2026, a spouse who remains at home while the other spouse receives long-term care will be allowed to keep countable assets of $143,172. They may also be able to receive part of the other spouse's income if their own monthly income falls below a set amount. This amount is $4,066.50 in 2026. A couple’s family home will generally be protected while the community spouse lives there.

These protections have limits, and a couple with substantial savings may still need to spend a significant amount before Medicaid will provide coverage for long-term care. However, steps taken ahead of time can help ensure that a community spouse will have the resources they need and that assets can be passed on to children or grandchildren rather than being used to pay for a nursing home.

What Are Common Misconceptions About Paying for Long-Term Care?

Families may make decisions about nursing home care based on things they've heard from friends or read online. Some of the most common myths include:

• "Medicare will cover Mom's nursing home." Medicare covers short-term rehab, not long-term custodial care.

• "We'll just give the money to the kids." Gifts made within five years before applying for Medicaid can trigger penalties.

• "The house is always safe." A home may be exempt while a person is alive, but the government may seek repayment for Medicaid benefits from a person’s estate after their death.

• "It's too late to do anything once Dad is in a nursing home." While options may be more limited in a crisis, some planning may be possible, and steps can be taken to protect assets and minimize financial losses.

• "Only wealthy families need to plan." Middle-class families often have the most to lose because their savings are large enough to be spent down but not large enough to cover years of long-term care.

Why Should Families Start Planning Before Long-Term Care Is Needed?

Time is the most valuable tool in long-term care planning. Because Medicaid uses a five-year look-back period when determining whether a person qualifies for long-term care benefits, assets transferred during that period could lead to penalties. Many asset protection strategies will only work if they are put in place well before care becomes necessary. For example, certain types of irrevocable trusts can protect assets from being used to pay for nursing home costs, but a trust must be set up and funded more than five years before applying for Medicaid.

Contact Our Yorkville, IL Medicaid Planning Lawyer

Long-term care costs may become an issue that can arise faster than a family expects. The rules for Medicare, Medicaid, and long-term care insurance are easy to misunderstand. At Gateville Law Firm, we can help ensure that a family will have peace of mind about financial concerns in the years ahead. We will help families understand their options and make sure trusts or other methods are used correctly to protect their assets. Contact our Montgomery long-term care planning attorney at 630-780-1034 to schedule a consultation.