How to Pay for Assisted Living
Should you or a loved one have a life insurance policy, there are companies that will “buyout” the policy at a discounted rate. The amount will be less than the face value of the policy. There is usually a fee/commission associated with this as well at tax consequences. Much consideration needs to occur before going down this route. It is recommended that you consult with your family and financial advisor before entering into an agreement.
For more information go to: https://www.aarp.org/caregiving/financial-legal/info-2017/insurance-life-settlements.html
Long Term Care Insurance
A Long Term Care Insurance policy is an excellent way to pay for assisted living.
Typically, for a LTC policy to be activated, one will need to be requiring assistance with two or more activities of daily living (ADLs) in a licensed assisted living facility. These include ambulation, bathing, dressing, transferring, and medication reminding. Many LTC policies have an initial elimination or deductible period ranging from 90 to 180 days. Policies have a daily benefit, and some have a maximum total lifetime benefit. It is advisable that you review your policy before activating so you can fully understand your benefits.
For more information, go to: https://www.aarp.org/health/health-insurance/info-06-2012/understanding-long-term-care-insurance.html
Medicaid is a state program, and Medicaid benefits for assisted living vary by state. Generally, if the resident meets state income eligibility guidelines and the assisted living community is licensed by the state and accepts Medicaid, the program pays for “long-term care services” like personal care but doesn’t pay for the room and board portion of assisted living costs.
There are assisted living facilities that accept the Medicaid Waiver program, however many assisted living facilities do not participate. The Medicaid Waiver program pays between $1,000 to $1,500 towards care-related charges in an assisted living facility. It does not cover room and board, only care-related charges. There is an application process that is taking about 1+ year for review/approval. Someone must be living and paying privately at an assisted living facility during this time. Benefits are determined based on one’s financial situation.
Here is a link to the Agency for Health Care Administration (AHCA): https://ahca.myflorida.com/Medicaid/Policy_and_Quality/Policy/index.shtml
Medicare doesn’t cover long-term care costs for assisted living or nursing home care. Medicare typically covers only short-term, in-home or residential care while recovering from a hospital stay.
The most common way to pay for assisted living is privately, out of pocket. Because of the inclusive nature of assisted living, many people find living at an assisted living facility is a very good value since meals, taxes, utilities, transportation, maintenance, and care is included in your rent.
Any of these options can help fund senior housing and care needs:
- Cash assets or business income
- Savings and Certificate of Deposits (CDs)
- Individual retirement accounts (IRAs)
- Stocks and bonds
- Home sale or equity
- Rental property and royalties
- Family trust
Senior Housing Solutions can help find the best assisted living option that meets your needs and budget.
Should you have equity in your home and one spouse requires care, considering a reverse mortgage might be a consideration. A reserve mortgage is basically a loan against the equity in your home. Repayment of the reserve mortgage occurs when your home is sold.
Much consideration and research should occur before agreeing to a reverse mortgage and it is recommended that you consult with your family and financial advisor before entering into an agreement.
For more information, go to: https://www.consumer.ftc.gov/articles/0192-reverse-mortgages
Veteran Benefits – Aid and Attendance
Wartime veterans and their surviving spouses, 65 years and older, may be entitled to a tax-free benefit called Aid and Attendance provided by the Department of Veteran Affairs.
The Benefit is designed to provide financial aid to help offset the cost of long-term care for those who need assistance with the daily activities of living such as bathing, dressing, eating, toileting, and transferring. In 2021, a veteran may receive up to $1,936 per month for themselves, up to $1,244 per month to a surviving spouse, or up to $2,295 per month for a couple. For two veterans who are married and qualify, the benefit amount may be up to $3,071 per month.
For more information, go to: www.va.gov/pension/aid-attendance-housebound