As you consider the potential move for yourself or a loved one to assisted living, it’s natural to grapple with feelings of worry and anxiety. One of the biggest concerns you might have is: how do you pay for assisted living?
In this blog post, we’ll explore financial strategies that can help you pay for assisted living and ways to help make this transition smooth and manageable for everyone involved.
Will You Need Long-Term Care?
Statistically speaking, approximately 70% of individuals over the age of 65 will need some form of long-term care services during their lives, as highlighted by the U.S. Department of Health and Human Services.
Additionally, symptoms of Alzheimer’s may manifest as early as 60 years old. While many Alzheimer’s patients may be cared for by loved ones, others will need long-term specialized care.
Finally, the cost of senior care is on the rise, adding another layer of consideration. A CNN report from April 20, 2023, highlights the increasing expenses associated with senior care.
Taken together, these factors emphasize the importance of planning for your potential long-term care needs so you can prepare for the evolving landscape of senior healthcare.
How Do Seniors Pay For Assisted Living?
The good news is that paying for long-term care in your golden years can be more manageable than you might think. Here are the most common assisted living payment options you can take advantage of to ensure affordable and quality care.
Long-Term Care Insurance
Long-term care insurance is a proactive financial tool designed to cover the costs associated with assisted living. It offers financial assistance for services not typically covered by health insurance.
However, premiums increase with age, and eligibility criteria may limit its availability. Before using this payment method, double-check that your policies cover the specific needs of assisted living care.
Converting Life Insurance for Senior Living
You or your loved one can explore whether you can (or should) convert life insurance policies into funds for assisted living. Your options may include selling the policy for a lump sum (life settlements) or using accelerated death benefits. Be sure to check whether this will affect your Medicaid eligibility, and thoroughly read the terms and potential tax consequences.
Additionally, learn the tax implications of a life settlement. Proceeds from settlements may be subject to taxation, and you or your loved one should be aware of the specific tax treatment based on the duration of the settlement.
Government Programs
Government programs such as Medicaid can provide financial assistance for assisted living. Note that Medicaid eligibility criteria are not standardized across the country; they vary by state, influencing the availability of benefits for assisted living.
It helps to take the time to look up Medicaid benefits in your state so you understand the specific eligibility and coverage you have. Some states may have restrictions or specific requirements for assisted living facilities to participate in Medicaid-funded programs, so be sure to check on those, too.
Veteran’s Benefits: Aid and Attendance
Veterans and their spouses may qualify for Aid and Attendance benefits, which offer financial support for assisted living. To qualify, veterans must meet eligibility criteria, including wartime service requirements and having served a minimum of 90 days in active duty. The application process involves submitting the necessary documents to the Veterans Affairs (VA) office, as outlined in VA Form 21-2680.
When in doubt, seek assistance from organizations that specialize in veteran support to help you through the application process.
Private Funds
Many families use private funds to cover assisted living costs. Before using any of these, look at the long-term sustainability of these funds and plan accordingly. Some other commonly used private funds include profits from the sale of a home or a personal savings account.
Your Home
For seniors who own their homes, exploring options like reverse mortgages can provide additional funds for assisted living. Selling your home, too, may provide enough money to cover several years or more of assisted living expenses.
Your Savings
If you’ve been careful with your savings, you may have enough to cover your long-term care needs for at least a few years. Just make sure you plan and budget effectively to ensure these funds cover ongoing care costs without jeopardizing your financial security.
Assisted Living Vs. Independent Living Cost
Assisted living and independent living are different types of senior housing options. Independent living is suitable for seniors who maintain their autonomy and require minimal assistance. Assisted living provides more support with daily activities to accommodate those needing extra help.
Because of the additional services provided, assisted living generally costs more than independent living. As you plan your long-term needs, make sure you know the level of care you need and the cost of any potential facilities you consider.
Find Quality Assisted Living At New Perspectives
When it comes to quality care for yourself or your loved ones, the Assisted Living options at New Perspectives will take care of you in comfort and style. Enjoy your independence while knowing that you’re getting the help and support you need.
Contact us today to take a tour or speak with one of our knowledgeable Assisted Living specialists.