Making the decision to move a loved one or yourself into an assisted living facility can be challenging. This is especially true when you consider the assisted living costs over time, as the current national average for assisted living is more than $4,000 per month.
Unfortunately, assisted living isn’t something you can expect to be fully covered by Medicare. Fortunately, paying for assisted living is much easier than you would think, as there are several ways to come up with the money, including:
- Life insurance
- Long-term care insurance
- Home equity
- And more!
Below we’ll discuss the various ways in which you can pay for assisted living and more.
Who Is Responsible for Paying for Assisted Living?
Determining who will cover the assisted living costs for you or your loved one can be difficult. Many families choose to use private funds for their loved ones, while others rely on a combination of savings accounts, such as:
- Personal savings accounts
- Pension payments
- Retirement accounts
In addition to an individual’s savings accounts, family members may still contribute to their assisted living expenses to ensure they receive the best care and have access to everything they need. Of course, many aging adults and their families also rely on certain assets, insurance, public assistance, and other types of benefits to help cover the costs when private funds and retirement savings simply aren’t enough.
The most important element to consider when it comes to assisted living costs, however, is choosing an assisted living facility that you or your loved one can realistically afford.
How to Pay For Assisted Living
There are several factors that will determine the cost of assisted living. Some of the primary factors that make up assisted living expenses include:
- Location
- Level of personal care offered
- Amenities
- Your individual needs or your loved one’s needs
Using the national average as a starting point is an excellent way to figure out a budget. From there, you’ll need to discuss the costs for things like skilled nursing and other means of specialized care to get an idea of what the facility in question charges.
They’ll also likely conduct a care assessment to determine the actual level of personal care needed for you or your loved one to provide an exact number. It’s also important to understand that the level of care needed may increase over time, which means the monthly assisted living costs will also increase.
With all of these things in mind, here’s a breakdown of how you can pay for assisted living so you can start planning:
Private Pay
As mentioned above, many families choose to cover the costs for themselves or their loved ones when it comes to assisted living. Whether the money comes from one family member, a retirement fund, or multiple family members, it’s always a good idea to come up with a strict budget and plan for the assisted living expenses to increase.
Health Insurance
Aging adults typically rely on health insurance to cover the cost of everything from doctor appointments to hospital stays. Depending on the individual policy, most aging adults may be able to claim some aspect of the medical care they receive in assisted living facilities.
- Medicare: Medicare may cover some aspects of assisted living, such as medication administration. While Medicare won’t cover personal care assistance like bathing or dressing, it will likely cut costs where medication assistance like insulin injection fees are involved.
- Private health insurance: Some private health insurance companies like Aetna, Blue Cross, and Humana have policies that cover some skilled nursing and health care costs associated with assisted living. However, your private health insurance won’t pay for personal care, and you’ll need to contact your insurer directly to get more details about what they’ll cover and what they won’t regarding assisted living facilities.
- Long-term care insurance: Long-term care insurance usually goes into effect when your loved one can no longer perform two or more activities of daily living (ADLs), such as bathing, grooming, or getting dressed. However, you or your loved one must register and pay for a long-term care policy before the age of 60 — and you’ll want to review the policy to ensure you know what it will cover.
- Medicaid: Medicaid often covers medical assisted living costs for low-income seniors who qualify. It’s a state-regulated resource, so you’ll need to make sure you meet your state’s requirements upon applying. Keep in mind, however, that not every assisted living community accepts Medicaid as payment.
Life Insurance
Most people don’t realize that a family member’s life insurance policy or a senior’s life insurance policy can be used to cover assisted living expenses.
Essentially, you can sell your policy to a third party for its market value and use the proceeds to pay for assisted living. You can use what you sell to fund a long-term care benefit plan while still holding on to some of your death benefits, or you can completely surrender your policy for its cash value.
Home Equity
If you or your loved one owns a property, that property may be leveraged to cover assisted living and care.
There are three ways you can leverage your home or another property:
- Bridge loan: This is a short-term loan that’s best for emergency situations that require quick cash. You can use a bridge loan to start funding your assisted living while selling your home or liquidating other assets.
- Reverse mortgage: This option is a way to tap into your home’s equity to supplement your funds as either a lump sum or payment plan while any dependents or other adults can remain living in the home.
- Sell or rent your property: Selling or renting your home is an excellent way to pay for a senior living community. All you have to do is calculate your budget and the cost of care you’ll need and decide which option will keep you flush.
Other Benefits
There are several other benefits you or your loved one may be eligible for, such as:
- The Department of Veterans Affairs (VA) for wartime veterans and their spouses
- Federal Long Term Care Insurance (FLTCI) for federal, railroad, and postal employees as well as annuitants and their qualifying relatives.
Many of these benefits offer a stipend to offset some of the costs, so you’ll likely have to use any public benefits in combination with other payment methods.
Don’t Be Afraid to Ask for Help
Figuring out how to pay for assisted living can feel overwhelming, but there are plenty of options out there to ensure that you or your loved one never have to go without care. If you need more help finding resources for assisted living funding, contact us at Sunflower Communities, and we’ll provide you with all the information you need and more.