Private pay assisted living means your parent pays the community's bill from their own money instead of through Medicaid. Most residents pay this way. The 2025 national median was $6,200 a month, from $4,369 in Mississippi to $12,096 in Hawaii, according to CareScout. Families usually combine income, savings, a house sale, long-term care insurance and, for some veterans, VA pension with Aid and Attendance.
Key facts
- The 2025 national median cost of assisted living was $6,200 a month, or $74,400 a year, up 5% from $5,900 in 2024. (CareScout, 2026)
- Hawaii had the highest state median for assisted living in 2025 at $12,096 a month, and Mississippi the lowest at $4,369. (CareScout, 2026)
- Most assisted living residents pay for their care from their own personal resources, and as of March 2025, 44 state Medicaid programs covered assisted living services. (U.S. GAO, 2026)
- Federal Medicaid funding for home and community-based waiver services is not available for the cost of room and board, apart from narrow exceptions such as some respite care. (Cornell LII, undated)
- From December 1, 2025, VA's maximum annual pension rate for a veteran with no dependents who qualifies for Aid and Attendance is $29,093, and the net worth limit for Veterans Pension is $163,699. (VA.gov, 2025)
The admissions director slides the residency agreement across the table and asks, "Will your mother be private pay?" It sounds like a box to tick. For private pay assisted living, the answer sets who gets the bill, what happens if the money runs low, and whether she can keep her apartment later. This post covers what private pay means, what it costs in your parent's state, what the base rate leaves out and how families fund it.
The one question to ask before signing, about Medicaid later, is in the section on what happens if money runs low.
What does private pay mean in assisted living?
Private pay, also called self pay, means your parent pays the bill from their own resources. That money can come from income, savings, the sale of a house, or insurance and benefits your parent receives. The other path is Medicaid, which can pay for care services in some communities for people who qualify.
Private pay is the usual case. A 2026 GAO report says most assisted living residents pay for their care from their own personal resources. The National Center for Assisted Living (NCAL) says the same of the costs: the majority are paid from the personal finances of residents or their families.
Medicare doesn't change this. NCAL notes that Medicare does not cover assisted living expenses, though some health services, such as prescriptions under Medicare Part D, may be covered in limited cases.
For a private payer, the money terms in the residency agreement matter most. NCAL's checklist for families asks about these before signing:
- Is there a security deposit or an entrance fee, and what is the refund policy?
- Under what circumstances might the fees change, and how much notice is given before an increase?
- Does the community take part in Medicaid?
- Can the service agreement or contract be changed later?
How much does private pay assisted living cost?
The 2025 national median for assisted living was $6,200 a month, or $74,400 a year, in CareScout's Cost of Care Survey. That was 5% more than the 2024 median of $5,900. CareScout's state figures are the monthly rates communities reported for a private one-bedroom apartment.
| State | 2025 median, per month | Per year |
|---|---|---|
| Hawaii (highest) | $12,096 | $145,155 |
| Alaska | $9,882 | $118,578 |
| Massachusetts | $9,600 | $115,200 |
| Connecticut | $9,118 | $109,410 |
| New York | $7,110 | $85,320 |
| California | $7,000 | $84,000 |
| National median | $6,200 | $74,400 |
| Texas | $5,666 | $67,992 |
| Florida | $5,610 | $67,320 |
| Arkansas | $4,637 | $55,644 |
| Alabama | $4,425 | $53,100 |
| Mississippi (lowest) | $4,369 | $52,425 |
A median is the middle of the range, so half of communities charge more. Your parent's bill depends on the apartment, the town and the level of care. Every state is listed in assisted living cost by state, and each of our state rules pages shows that state's median next to its Medicaid program. If your parent can still live on their own and is weighing a campus with every level of care, the costs work differently; see continuing care retirement community fees and contracts.
What the base rate covers, and what costs extra
The base rate is the monthly price for the apartment and a basic package of services. Depending on the pricing model, care may be added on top. NCAL suggests asking which model a community uses:
- All inclusive. One monthly price for housing and care.
- Tiered. The cost of care is split into levels, each with a bundle of services such as bathing, medication help, dressing and mobility help.
- Fee for service. Each service is priced on its own, a la carte.
NCAL's cost calculator lists the lines that can show up on a bill. They include meals, housekeeping, personal laundry, linens, medication management, personal care, transportation, phone, cable, internet and the beauty shop. Ask the community to fill in each line for your parent's expected care.
Words for the business office: "Before we sign, could you put in writing what the base rate includes, the current price of each care level, how much notice you give before a rate increase, and whether my mother could stay in her apartment if she later qualifies for Medicaid?"
The charges families most often miss are covered in the hidden costs of assisted living.
How do families fund private pay assisted living?
Most families combine several sources. Each one has its own rules and its own expert.
| Source | What to know | Who to ask |
|---|---|---|
| Income (Social Security, pensions) | Covers part or all of the bill; whatever is left is the monthly gap | Your parent's statements |
| Savings and investments | Withdrawals can have tax effects | Tax professional, financial planner |
| Sale of the house | Up to $250,000 of gain ($500,000 for married couples filing jointly) can be tax free if the IRS tests are met | Tax professional, real estate agent |
| Long-term care insurance | Some policies, including combined life and long-term care policies, cover assisted living | The insurer |
| VA pension with Aid and Attendance | Income and net worth limits apply | VA-accredited representative |
| Bridge loan | Short-term money while a house sale is pending; must be repaid | The lender, financial planner |
The house. IRS Publication 523 has a rule that matters after a move. Say your parent became physically or mentally unable to care for themselves and used the house as their main home for at least 12 months of the 5 years before the sale. Then time in a care facility licensed for their condition counts toward the 2-year residence test. The order of steps is in selling the house to pay for assisted living.
Insurance. NCAL lists long-term care insurance and combined life and long-term care policies that include assisted living coverage. How a claim works is in using long-term care insurance for assisted living.
VA benefits. VA pays the difference between a veteran's income for VA purposes and a limit Congress sets, the maximum annual pension rate. From December 1, 2025, that limit is $29,093 a year for a veteran with no dependents who qualifies for Aid and Attendance. Unreimbursed medical expenses may lower income for VA purposes. The net worth limit is $163,699, and a parent above it isn't eligible for the pension. See VA Aid and Attendance and assisted living.
Bridge loans. If you compare loans, the CFPB says the APR measures the interest rate plus the extra fees the lender charges. Questions to ask a lender are in bridge loans for assisted living.
How long will your parent's money last?
Start with three numbers: the full monthly cost, the monthly income and the savings that can be used. Cost minus income is the monthly gap. Savings divided by the gap is a rough count of months.
A hypothetical example: your dad's community costs $7,000 a month and his income is $3,000. The gap is $4,000. With $300,000 in savings, that's 75 months, a little over six years.
Rates rise, though. The national median went up 5% from 2024 to 2025. Run the same example with the bill rising 5% each year and his income staying flat. The gap grows from $4,000 a month in the first year to about $5,500 in the fifth. The savings then last about 63 months, a year less than the flat math showed. Rerun the numbers each time the community announces a new rate.
If siblings or grandchildren chip in, settle the terms in writing before the first payment. Agree on who pays how much, who manages the payments, and whether the money is a gift or a loan to be repaid later. A tax professional or elder law attorney can explain how each choice is treated.
The assisted living budget post walks through each cost and income line. You can also download the free monthly budget template (.xlsx), which works out the gap and the months for you.
Keep the private pay numbers in one place
When income, savings and a house sale all feed one monthly bill, everyone needs the same figures. Parent Move Plan Complete includes a shared costs log your siblings can open in Google Sheets or Excel. The move itself runs on a day-by-day plan counted back from move-in day.
Get your first 3 days freeWhat happens if the money runs low?
It depends on your parent's state and on the community. As of March 2025, 44 state Medicaid programs covered assisted living services, the GAO found. In 29 of those states the coverage runs through home and community-based services waivers, and those waivers let a state limit how many people take part. So a spot may not open right away.
Medicaid also covers less of the bill. Federal Medicaid money for waiver services can't pay for room and board, apart from narrow exceptions. Rent and meals then have to come from somewhere else, such as your parent's income. The GAO notes that other federal programs, such as HUD and VA programs, may help with room and board. Our state pages name each state's program, and does Medicaid pay for assisted living explains how eligibility works.
NCAL's advice to families is to ask the community to explain its policies for residents who use up their personal funds. Questions to ask while savings still cover a year or more:
- Does the community accept Medicaid for assisted living services?
- If a private pay resident becomes eligible for Medicaid, can they stay in the same apartment?
- How much notice does the community give before a move-out for unpaid bills?
- Who on staff helps families with a Medicaid application?
Write down each answer, who gave it and the date. An elder law attorney or your state Medicaid agency can explain the rules where your parent lives. What families do when the savings are nearly gone is covered in when the money runs out in assisted living.
Frequently asked questions
Is self pay the same as private pay in assisted living?
Yes. Both mean the resident pays the community's bill from their own resources, such as income, savings, the proceeds of a house sale or insurance benefits, rather than through Medicaid. The GAO reports that most assisted living residents pay this way.
How much does private pay assisted living cost per year?
The 2025 national median was $74,400 a year, or $6,200 a month, according to CareScout's Cost of Care Survey. State medians ranged from $52,425 a year in Mississippi to $145,155 in Hawaii. Your parent's bill also depends on the apartment and the level of care.
Does Medicare pay anything if my parent is private pay?
Medicare does not cover assisted living expenses, the National Center for Assisted Living notes. Some health care services may still be covered in limited cases, such as prescriptions under Medicare Part D. The rent and care charges stay with your parent.
Can a private pay resident switch to Medicaid later?
Sometimes. As of March 2025, 44 state Medicaid programs covered assisted living services, but many use waivers that can limit how many people enroll, and not every community takes Medicaid. Medicaid waiver money also doesn't pay room and board. Ask the community and your state Medicaid agency before your parent's savings get low.
Sources
- CareScout: Cost of Care Survey 2025 (accessed Nov 2026)
- CareScout: Cost of Care Survey 2025, Ranked Median Costs by State (accessed Nov 2026)
- U.S. GAO: Assisted Living Facilities, Information on Federal Spending and Medicaid (GAO-26-107884) (accessed Nov 2026)
- National Center for Assisted Living: Choosing an Assisted Living Community, a consumer's guide (accessed Nov 2026)
- Cornell LII: 42 CFR 441.310, Limits on Federal financial participation (accessed Nov 2026)
- VA.gov: Current pension rates for Veterans (accessed Nov 2026)
- IRS: Publication 523 (2025), Selling Your Home (accessed Nov 2026)
- CFPB: What is the difference between a loan's interest rate and its APR? (accessed Nov 2026)