# Ways to Pay for Memory Care A general overview of how families pay for memory care, including personal savings, long-term care insurance, Veterans benefits, and government programs such as Medicaid and VA Aid and Attendance. Updated 2026-10-10. Also on the [web page](https://memorycarehomes.fyi/guides/ways-to-pay-for-memory-care). # Ways to Pay for Memory Care Memory care is expensive, and most families use a combination of funding sources to cover the cost. The right approach depends on your family member's assets, income, insurance coverage, and location. This guide provides a general overview of the most common payment methods. Because programs, eligibility, and amounts vary by state and change over time, always verify with a local expert or official agency. ## Personal Savings and Income Many families start with the resident's own assets. This may include Social Security income, pension payments, retirement accounts such as IRAs and 401(k)s, investment income, and proceeds from selling a home. Some families also contribute their own savings. A common first step is to gather a clear picture of the person's monthly income and total liquid assets, then compare that against the monthly cost of memory care in your area. A geriatric care manager or a fee-only financial planner who specializes in senior living can help model how long the savings will last. ## Long-Term Care Insurance Long-term care insurance policies are designed specifically to cover the cost of assisted living, memory care, and home care. If your parent has a policy, the terms will determine how much it pays and for how long. Important details to check include: - The daily or monthly benefit amount - The benefit period, which may be a set number of years or a dollar cap - The elimination period, which is the number of days you must pay out of pocket before benefits begin - Whether the policy covers memory care specifically or assisted living generally - Whether there is an inflation rider Most policies require a doctor's certification that the person needs help with a certain number of activities of daily living or has a cognitive impairment. If your parent has a policy, contact the insurance company early, even before you are sure a move is needed, to understand what documentation you will need. ## Veterans Benefits Veterans and their surviving spouses may qualify for financial assistance through the U.S. Department of Veterans Affairs. The Aid and Attendance benefit, which is part of the VA pension program, provides monthly payments that can be used toward the cost of memory care. Eligibility depends on wartime service, income, and asset limits. The application process can take several months. Some veterans may also qualify for a higher level of care through the VA's Geriatrics and Extended Care programs. If your parent served, contact the nearest VA regional office or a Veterans Service Officer to start the application. ## Medicaid Medicaid is a joint federal and state program that covers long-term care costs for people with limited income and assets. Whether it can be used for memory care depends on the state. Some states offer home- and community-based waivers that allow Medicaid funds to be used in assisted living and memory care settings — though waiver programs generally pay for care services only, not ongoing room and board, which families must still cover. Others require the person to move to a nursing home to receive Medicaid-covered care. Medicaid eligibility rules and the application process differ from state to state. In many states, a person must have very limited assets to qualify, which may require spending down savings first. If you think Medicaid may be needed in the future, consult with an elder law attorney in your state before making any financial moves. ## Medicare Medicare does not pay for the room and board or personal care costs of memory care. Medicare Part A covers skilled nursing care only for a limited time after a qualifying hospital stay and in a Medicare-certified skilled nursing facility. It does not cover custodial care in a memory care residence. Medicare Part D (prescription drug coverage) may cover medications your family member needs, regardless of where they live. ## Selling the Home For many families, the equity in the family home is the largest asset available to pay for care. Selling the home can fund several years of memory care in many markets. If the home is sold after the resident moves into memory care, the proceeds may also be treated favorably under Medicaid spend-down rules, depending on the state. ## Reverse Mortgages and Loans A reverse mortgage allows a homeowner age 62 or older to convert part of the equity in their home into cash without selling. These funds can be used for memory care. The loan is repaid when the home is sold — but the home must remain the borrower's principal residence, and the loan becomes due if the borrower moves out permanently (typically after 12 months away). A spouse or eligible co-borrower living in the home may keep it under certain protections, so this option mostly fits couples where one partner stays home. Some families also use personal loans or bridge loans to cover costs during a transition period, such as while waiting for a home to sell or a Medicaid application to be approved. These options carry interest and fees, so they are best used as short-term solutions. ## Where to Start Begin by gathering financial documents, insurance policies, and the person's most recent tax return or benefit statements. Then make a list of the memory care communities you are considering and request their rate sheets. A financial planner, elder law attorney, or aging services agency in your area can help you evaluate your options and avoid costly mistakes. ## Questions ### Does Medicare pay for memory care? Original Medicare does not cover the cost of long-term custodial care in a memory care community — it does not pay for room, board, or personal care assistance. Part A covers short-term skilled nursing or therapy after a qualifying hospital stay, and Part B can cover outpatient therapy and doctor visits that continue while a person lives in memory care. ### Does Medicaid pay for memory care? Medicaid can help pay for memory care in some states, but coverage varies. Many states offer home- and community-based waivers that can be applied to assisted living or memory care, and some also cover nursing home care for people with dementia. Eligibility is income- and asset-based and differs by state. ### What is a bridge loan and when is it used? A bridge loan is a short-term loan some families use to cover memory care costs while waiting for a long-term funding source, such as the sale of a home or approval of a Medicaid application, to become available. They are typically offered by specialty lenders and carry higher interest rates.