There are four buckets. They get drained in roughly this order. Most families don't know that until they're already in bucket three.
Pays for short-term skilled care: up to 100 days in a nursing facility after a qualifying hospital stay (3+ nights), with copays after day 20. Pays for limited home health when you're homebound and need skilled care.
Does NOT pay for: assisted living, memory care, long-term nursing-home stays, custodial home care. This is the most expensive misunderstanding in American eldercare. Read the comparison.
If Mom bought a policy 10-20 years ago, dig it out. It typically pays a daily benefit for assisted living, home care, or nursing home — once she has at least 2 ADL deficits or significant cognitive impairment, after a waiting period (usually 90 days).
If she doesn't have a policy, this bucket doesn't exist. Buying it for her now is generally too late and too expensive.
Social Security + pension + investment income + savings principal + the equity in her house. This is where most families spend the most money and the most time. Run the savings runway calculator to see how long it lasts.
The house is the wild card. Selling it usually unlocks 3-7+ years of care, but is emotionally and logistically heavy. Some families do reverse mortgages or HELOC's instead. Each has tradeoffs.
Medicaid is the largest payer of long-term care in the country. To qualify, she generally has to spend down assets to ~$2,000-$3,000 (rules vary by state). The 5-year look-back period means any asset transfers in the prior 5 years are scrutinized.
This is where elder-law attorneys earn their money. The right plan, started 5+ years before need, can preserve significant assets legally. Started after the fact, options are limited.
1. Confirm what Medicare actually covers. Don't assume.
2. Find her long-term care insurance policy if it exists. Read it.
3. Calculate the runway with the tool. Be honest about cost increases.
4. If the runway is under 5 years, talk to an elder-law attorney this month. The look-back window is a window — once you're inside it, options shrink fast.
Palmelle's advisors won't sell you a policy or push a facility. They'll help you sort what's actually paying for what.
Get a real opinion