How to Pay for Assisted Living

Assisted living can be an excellent option for you or a loved one, providing necessary daily support and social connections. However, figuring out how to pay for this senior housing option can be a challenge. Unlike nursing care, assisted living is not covered by Medicare, so alternative payment methods must be considered. Let’s explore the different ways to pay for assisted living.

How much does assisted living cost?

The average monthly cost of assisted living is approximately $4,051, according to Genworth’s 2019 Cost of Care Survey. While more affordable than nursing homes, which can range from $7,000 to $8,000 per month, this amount can still be a significant expense for many families.

Do Medicare and private health insurance cover assisted living?

Contrary to popular belief, Medicare does not cover assisted living. It is primarily focused on medical treatment and short-term nursing care. Similarly, private health insurance typically does not cover long-term care or activities of daily living (ADL) assistance.

What are the different payment options for assisted living?

1. Medicaid: Medicaid covers long-term care in nursing homes, but it generally does not cover assisted living. To be eligible for Medicaid coverage, you must demonstrate both financial need and medical necessity.
2. State-Level Programs (PACE & SHIP): Some states offer programs like PACE (Programs of All-Inclusive Care for the Elderly) and SHIP (State Health Insurance Assistance Program) to provide greater coverage for seniors. PACE offers a team of healthcare workers in your community, and SHIP helps Medicare patients navigate care and pricing. Explore if your state offers these programs.
3. Aid & Attendance VA Benefits: Veterans who need assistance with daily tasks may qualify for the Aid & Attendance benefit, which offers a monthly stipend to cover ADL care on top of the VA pension. Ensure you meet the eligibility criteria to apply for this VA benefit.
4. Long-Term Care Insurance: If you have long-term care insurance, check your policy to see if it covers assisted living costs. Coverage varies, but it often applies when you are diagnosed with a chronic illness.
5. Life Insurance: Some life insurance policies may include provisions to cover long-term care expenses. Check with your provider to determine if your policy can be applied to assist with assisted living costs.
6. Employer-Provided Assistance: It is rare, but some employers offer senior care benefits even for retired employees. Contact your former employer to inquire about any senior care assistance available through the company’s benefits plan.
7. Non-profit Assistance: Depending on your location and personal circumstances, some non-profit organizations may provide aid to help cover the cost of assisted living. Research and explore local non-profits that offer assistance for seniors who do not qualify for Medicaid but still struggle to afford long-term care.
8. Private Funds: If you have savings, the ability to sell your home, or an investment portfolio, you may be able to use private funds to pay for assisted living. Proceed with caution and consider all options available to you before utilizing private funds.

Considerations to reduce assisted living costs

If the cost of assisted living is a concern, here are a few strategies to help reduce expenses:

1. Change your billing type: Assisted living facilities often provide options for all-inclusive pricing or a la carte pricing. Evaluate your service usage and see if switching billing types can help save money.
2. Shared rooms: Opting for a shared room instead of a private one can save around $1,000 per month. Consider having a roommate at the assisted living facility to reduce costs.
3. Relocate: The cost of assisted living can significantly vary based on location. Research states with lower costs and explore any cost-cutting programs they may offer.

By implementing these cost-saving measures, you may be able to mitigate the financial burden of assisted living.

Conclusion

In conclusion, paying for assisted living requires exploring alternative funding sources as Medicare does not cover these costs. Consider options such as Medicaid, state-level programs, VA benefits, long-term care insurance, life insurance, employer-provided assistance, non-profit aid, and private funds. Additionally, consider strategies like changing billing types, opting for shared rooms, and relocating to reduce the overall cost. Find the best payment method for your specific needs and financial situation to ensure a smooth transition to assisted living.

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

Sources:

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