How Much Does Long-Term Care Cost and How Do I Pay for It?
By McKenna K. Coffeen | Elder Law
July 8, 2026
One of the most common concerns families face when discussing long-term care is cost. Whether care is provided at home, in an assisted living facility, or in a nursing home, long-term care expenses can become significant very quickly.
In Wisconsin, nursing home care can cost thousands of dollars each month, and even part-time in-home assistance may create substantial financial strain over time. Because Medicare coverage for long-term care is limited, many families are surprised to learn that they may eventually need to rely on private funds, long-term care insurance, or Medicaid to cover ongoing care expenses.
Generally speaking, there are several common ways families pay for long-term care:
Private Pay
Many individuals initially use personal savings, retirement accounts, investments, or proceeds from the sale of assets to pay for care. While this may work in the short term, extended care needs can quickly deplete lifetime savings.
Veterans’ Benefits
For qualifying veterans and qualifying spouses of veterans, an increased monthly income payment for long-term care expenses from the Veterans’ Administration, called “Aid and Attendance,” may be available. Increased monthly income means less assets have to be used for long-term care expenses.
Long-Term Care Insurance
Some individuals purchase long-term care insurance policies to help cover future care expenses. Coverage varies significantly depending on the policy terms, eligibility requirements, waiting periods, and benefit limits. These policies may help pay for home care, assisted living, or nursing facility services.
Medicare
Medicare coverage for long-term care is very limited. Generally, Medicare only covers short-term skilled nursing or rehabilitation services following a qualifying hospitalization. It does not typically pay for ongoing custodial care or long-term assistance with daily living activities.
Medicaid
For many families, Medicaid becomes the primary source of long-term care coverage once care needs become substantial. Wisconsin Medicaid programs can help cover nursing home care as well as home and community-based services through programs such as Family Care and IRIS.
Importantly, Medicaid planning involves both financial eligibility and functional eligibility. In addition to meeting income and asset requirements, an individual must generally demonstrate that they require a sufficient level of care through Wisconsin’s functional screening process.
Many people are surprised to learn that Medicaid programs may also allow certain family members to be compensated for providing in-home care. Depending on the program and circumstances, spouses or adult children may be able to serve as paid caregivers, helping families maintain care at home while reducing financial pressure.
Additionally, in many circumstances, payments received by qualifying in-home caregivers may not be subject to federal income tax under current IRS guidance when specific requirements are met, including shared living arrangements.
Because Medicaid eligibility rules are highly technical and mistakes can create significant delays or penalties, planning ahead is critical. Asset transfers, income structuring, caregiver agreements, and timing considerations can all affect eligibility.
Our firm helps families evaluate long-term care options, understand Medicaid eligibility requirements, and develop strategies to help preserve assets while ensuring loved ones receive the care they need.
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