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How to pay for assisted living

Assisted living may be an excellent option for you or a loved one. You may have chosen this senior housing option to maintain your independence and boost your social life, while getting some daily help with tasks. But how will you pay for assisted living?

Paying for assisted living can be a tricky topic. Unlike nursing care, assisted living isn’t covered by Medicare. You’ll need another way to pay for this senior housing option. Let’s take a closer look at how to pay for assisted living below.

How expensive is assisted living?

On average, assisted living costs $4,051 per month, according to Genworth’s 2019 Cost of Care Survey. This is significantly more affordable than nursing homes, which average around $7,000-$8,000 per month. 

However, this cost can still be prohibitive for families. We’ll look at some common options to pay for assisted living below.

Wait, what about Medicare? 

This is a source of confusion for seniors and their families. Medicare doesn’t cover assisted living costs. In fact, it doesn’t cover long-term care. Instead, Medicare covers medical treatment and short-term nursing care.

For this reason, ADL (activities with daily living) care, meals, laundry and other amenities of assisted living aren’t covered by Medicare.

Wait, what about my private health insurance?

Generally speaking, private health insurance covers medical treatment and short-term nursing care. Of course, you should check with your health insurance provider to understand your coverage. Typically, ADL care and other long-term care amenities aren’t covered by this type of insurance.

Ways to pay for assisted living

1. Medicaid

Thankfully, Medicaid does cover long-term care. Medicaid is a government-sponsored health insurance option for low-income residents. In order to receive coverage, you must qualify for both financial and medical need. Usually this means having a low income and no assets (except for a home). You’ll also need a doctor’s testament that you require a care facility. 

If you qualify for Medicaid, you will be able to use Medicaid coverage to pay for assisted living. The only catch is that the facility must be Medicaid-approved. As you research care facilities, make sure they accept Medicaid coverage. 

2. State-level programs (PACE & SHIP)

Depending on your state, you may be able to take advantage of state-level programs. Because of the expense of care, some states are creating workarounds to provide greater coverage for seniors. In particular, these two programs can help pay for assisted living:

  • Programs of All-Inclusive Care for the Elderly (PACE): PACE makes available a team of health care workers in your community. You can qualify if you have Medicare or Medicaid, and live in a PACE-covered area. 
  • State Health Insurance Assistance Program (SHIP): SHIP is a state-level program to help Medicare patients navigate care and pricing in their area. They provide insurance counseling and can help you find senior housing you qualify for. 

If you’re interested in these programs, you should search for your state to see if they’re offered in your area.

3. Aid & Attendance VA benefits

If you’re a veteran, you may also qualify for long-term care coverage. The Aid & Attendance benefit is specifically designed for veterans who need help with daily tasks. Essentially, it offers a monthly stipend on top of the VA pension to cover ADL care. 

To qualify, you must already receive the VA pension and show medical need for daily living assistance. This stipend can be used to pay for assisted living or home care. Apply for this VA benefit in order to cover all your assisted living needs. 

4. Long-term care insurance

Not everybody has long-term care insurance, but if you have coverage you may be able to use it to cover assisted living costs. Long-term care insurance plans vary widely, so check with your provider to find out what’s covered. Typically, long-term care benefits are triggered when you’re diagnosed with a chronic illness, but this will depend on your plan and provider.

5. Life insurance

While not many seniors have long-term care insurance, many do have life insurance. It’s possible that you can apply your life insurance to cover long-term care. This will depend on whether you have hybrid life insurance or a long-term care rider in your plan. Check with your provider to see whether you can use your life insurance to cover assisted living costs.

6. Employer-provided assistance

Some workplaces offer senior care benefits (even for retired employees). While it’s rare, you should contact your former employer and check if any senior care is covered under the company’s benefits plan. Sometimes seniors miss out on cost savings due to employer-provided assistance. 

7. Non-profit assistance 

Another option to pay for assisted living is non-profit aid. This option depends greatly on your location and personal situation. However, some non-profits are trying to cover the care gap, especially for seniors who don’t qualify for Medicaid but don’t have significant assets to cover the high expenses of long-term care.

8. Private funds

Finally, you may be able to use private funds to cover your long-term care. There are few possibilities here. You may have savings, be able to sell your home or have an investment portfolio. Some seniors even take out a reverse mortgage, though this should be done with caution. In any case, your private funds may go a long way to help covering assisted living. 

What are some ways to reduce assisted living costs?

If you’re concerned about the cost of assisted living, there are a few ways to cut costs. Here are some pro tips for reducing your bill:

  • Change your billing type: Assisted living facilities have different types of billing. Often you can choose between all-inclusive pricing (which includes all main services) or a la carte pricing (which means you pay for every service you use). You may be able to save by changing your billing type. If you’re not using many services, you might consider going a la carte – and vice versa. 
  • Get a shared room: Private and shared rooms have a cost difference of about $1,000/month. To save, you can consider getting a roommate at your assisted living facility. In this way, you’ll save a significant amount per month. 
  • Move states: The cost of assisted living varies greatly depending on your location. Some states also offer cost-cutting programs that can help you save on assisted living care. If this option appeals to you, you should research states before making any big decisions.

With these tips, you may be able to save on the cost of assisted living. 

Find and pay for assisted living near you

Assisted living can be the perfect fit. With it, you can get a hand with daily tasks such as bathing or feeding, while also maintaining some independence. These facilities also have a strong sense of community. As you go to pay for assisted living, you can use the information above to find the best payment method for you. 

Want more senior care resources? Go straight to My Caring Plan

Sources:

  1. Paying for Care, NIA, www.nia.nih.gov

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