As the United States’ senior population continues its rapid growth, there’s a corresponding need for affordable long-term care options. In addition to senior living communities, assisted living services are an excellent choice for older adults who can no longer remain in their family home. These safe, secure elder care environments offer a degree of independence while assisting residents with their daily needs.
However, assisted living services are expensive, often requiring seniors and their family members to search for viable payment options. If you’re considering a long-term care facility for yourself or a loved one but are unsure how to pay for it, keep reading. We cover whether
Medicare pays for assisted living costs and provide valuable information on other possible payment sources. We also evaluate other long-term care services and help you determine which senior care option is the best choice for your situation.
United States Senior Population Growth
As the need for senior living options increases, middle-income seniors face two significant challenges. First, there aren’t many existing housing solutions for their mid-market segment.
Second, seniors who must pay for housing and healthcare costs often can’t afford one or both services.
Senior living businesses are trying to resolve these troublesome issues by considering more cost-effective construction options. Companies are also repurposing existing buildings and creating unconventional business partnerships.
Overview of Assisted Living Services
An assisted living community is designed for seniors who typically need help with the activities of daily living. At the same time, a quality assisted living facility endeavors to provide each resident with a rich, vibrant quality of life.
Person-Centered Care Philosophy
Each assisted living facility subscribes to the person-centered care philosophy. Rather than a “one size fits all” approach, the facility’s care services are tailored to meet each resident’s changing needs.
In addition to meeting residents’ personal care requirements, these senior care communities focus on providing each person with privacy and dignity. Whenever possible, the emphasis is also on residents’ independence.
Components of Assisted Living Services
At its heart, an assisted living community is a multi-component bridge between living in a private home and living in a skilled nursing facility (or nursing home). Although physical accommodations and services vary between facilities, every long-term care facility should comply with federal, state, and local laws and regulations.
Assisted living facilities, also known as residential care homes, offer several living space designs for residents. Offerings include private rooms, shared rooms, and private or shared bathrooms.
One- or two-bedroom apartments, along with couples’ apartments, are also options. Finally, cottages and condominiums provide a more self-contained lodging choice for residents who prefer that level of privacy.
Tailored Personal Care
Residents in long-term care typically need help with bathing and dressing. Some residents also need toileting assistance. Custodial care services, such as medication assistance or management services, are also available.
Home Care Services
Residents who have been seeking a “no maintenance” lifestyle will find it in an assisted living community. Staff members perform all housekeeping and maintenance tasks, including laundry and linen services.
Social and Community Activities
Residents who enjoy learning and cultural activities will appreciate the community events.
Some long-term care facilities even offer onsite college classes and community group performances. Recreational activities, social events, and worship services also play a key role in assisted living facility life. Finally, facilities generally have a well-appointed, accessible vehicle to transport residents to local shopping venues and appointments.
Devoting attention to residents’ physical well-being is extremely important. An assisted living facility typically provides transportation to residents’ medical appointments. Onsite wellness and exercise programs encourage residents to keep moving and build strength and flexibility.
24-Hour Assistance Available
Assisted living facilities promote resident safety by providing 24-hour support. If needed, assistance is readily available, often with an emergency call button.
Types of Assisted Living Venues
Seniors who require help with activities of daily living, but want some degree of independent living, can choose from three types of assisted living venues. Each facility offers different accommodations and services.
Assisted Living Communities
Assisted living residents often require help with daily activities. However, they usually don’t need 24-hour skilled nursing care for long periods.
Continuing Care Retirement Communities
These “continuum of care” facilities welcome residents with all levels of care needs. Residents generally arrive in reasonably good health and are good candidates for independent living buildings.
A resident’s health often declines over time. At that point, they move to an assisted living unit or even a facility that provides skilled nursing care as well as memory care for seniors with Alzheimer’s and dementia.
Healthcare services are generally available to all residents. The facility can arrange inpatient hospital visits along with the delivery of prescription drugs and medical supplies.
Facilities Integrated with Community Hospitals
Some hospitals operate their own assisted living facilities and/or nursing homes. Whether adjacent to the hospital facility or located offsite, the care facilities fall within the hospital’s medical care purview.
Additionally, these nursing homes can also function as short-term physical rehabilitation facilities after a senior’s hospital stay. A home care senior’s family might also utilize a nursing home for their loved one’s temporary respite care.
Assisted Living Services Costs
Assisted living services are one of the more expensive care options. According to the Genworth 2019 Cost of Care Survey, each assisted living facility resident can expect to pay between $3,000 and $6,000 monthly.
Assisted Living Costs vs In-Home Care Costs vs Nursing Home Costs
Although assisted living services are pricey, they’re lower than nursing home care or extended in-home care costs. On average, nursing home care runs $5,000 to $10,000 per month, while extended in-home care costs about $4,000 per month for 40 hours of weekly care.
Assisted Living Cost Determinants
The assisted living facility’s location, accommodations, level of care, additional services, and other factors can cause a wide variation in the monthly rates. Each facility should be transparent about extra fees for specific services.
The level of care is the biggest cost determinant. If a resident doesn’t need assistance with the activities of daily living, they’ll likely pay less than someone who requires those services. If the resident’s needs change over time, they’ll likely move into the higher cost category.
Reputable assisted living facilities provide detailed pricing information for each level of care. The facility should revisit those figures annually or at a requested care review. The long-term care center should also state what will happen when a resident’s funds run out.
Assisted Living Payment Options
To pay for assisted living services, a resident (or their family) may need to utilize several different payment sources. Note that some methods of payment have eligibility requirements.
Additionally, most health insurance plans don’t provide benefits for long-term care. This means that health insurance will likely not cover assisted living services.
Does Medicare Cover Assisted Living Costs?
Does Medicare pay for assisted living? How much does Medicare cover for assisted living?
And, how do I find an assisted living that accepts Medicare? These are all important questions if you are thinking about an assisted living facility for yourself or a loved one.
Unfortunately, Medicare coverage does not extend to any residency (assisted living) or custodial care costs. Neither Medicare Part A, Medicare Part B, nor Medicare Part C pays for assisted living facility expenses.
Medicare will cover a resident’s health services in accordance with their Medicare Beneficiary Agreement. However, each service must be “medically necessary,” and a participating Medicare health care provider must perform the service.
Brief Summary of Medicare Coverage
According to Medicare.gov, original Medicare is a fee-for-service health plan that contains two parts. Part A relates to hospital insurance, while Part B deals with medical insurance.
For additional perspective, Medicare Advantage Plans provide an alternative way to obtain Medicare Part A and B coverage. Medicare allows private companies to market these plans, but the businesses must follow Medicare’s rules.
Other Potential Funding Sources
Finding financial assistance for assisted living can be an ongoing challenge. Although government programs may provide some assistance, families will likely need to design their own financial support and care plan.
Personal Financial Resources
If a resident doesn’t have sufficient funds to pay for assisted living services, they may have to turn to other options that can help them reach their goal. An estate sale is a great place to start. Estate sales provide seniors with financial resources while allowing them to dispose of items they won’t need in a long-term care facility. Additionally, estate sales allow for the sale of the senior’s home, which can also help fund their new lifestyle.
Family members might also be willing to contribute money. Relatives with limited means but flexible schedules may offer to drive the resident to doctors’ appointments and errands in lieu of a financial commitment. The family may also come up with other creative methods for funding assisted living expenses.
Supplemental Security Income
The Supplemental Security Income (or SSI) Program is a federally funded income supplement program. The SSI Program assists aged, disabled, or blind people who have very little (or no) income.
Through this initiative, residents receive cash for basic needs such as food, shelter, and clothing. Although recipients apply for SSI benefits through the Social Security Administration, SSI benefits differ from Social Security benefits.
Medicaid Program Funds
If you or your loved one has extremely limited financial resources and meets low-income criteria, Medicaid services might be the answer. Generally speaking, the recipient must have under $2,000 in assets (not including their home or car) to have Medicaid pay for some assisted living costs.
Each state has specific Medicaid eligibility requirements, and each state’s Medicaid program often has a different name. Most states, along with Washington, DC, operate home- and community-based Medicaid waivers. These waivers help recipients who want home- or community-based long-term care services, instead of being funneled into nursing home care.
Not every assisted living facility accepts Medicaid payments, and Medicaid-funded beds may be limited. View an online caregiver resource to get more information on long-term residential care facilities that accept Medicaid. Also, check out the Centers for Medicare and Medicaid Services (CMS) website for information on each program’s connection to assisted living services.
Limited Veterans’ Benefits
In some cases, veterans and/or their spouses may receive benefits to pay for some assisted living community costs. The program, titled the “Aid and Attendance” program, is for veterans who have service-related disabilities or injuries, disabled veterans who fall below a certain income threshold, and surviving spouses of veterans.
To obtain veterans’ benefits, the veteran or spouse must work through the Department of Veterans Affairs (VA), which is a complex undertaking. Consider contacting a geriatric planner who can help you and your loved ones navigate the process. Some senior living communities may also have a dedicated concierge who can help.
Long-Term Care Insurance
If you have previously purchased long-term care insurance, the policy likely covers assisted living services. Some insurance companies’ policies designate nursing home care benefits, which are then used for assisted living expenses.
A similar process may apply for designated home care benefits, with funds paid to the assisted living facility. Or, the recipient can receive the funds before routing them to the assisted living facility.
Limited Life Insurance Benefits
A carefully structured life insurance policy may permit a policyholder to obtain a tax-free advance on their death benefit. This advance is designed to help pay for long-term care costs.
Some life insurance policies won’t extend this benefit unless the policyholder has a terminal illness. Other companies are more flexible on this issue.
If your loved one has almost paid off their home (or is already mortgage-free), a reverse mortgage may provide them with funds to pay their assisted living expenses. Simply put, a reverse mortgage enables you to receive your home equity’s cash value.
You can choose lump sum proceeds or monthly payments. Upon the borrower’s death, the loan balance is due, which often means selling the home to obtain the funds.
A reverse mortgage might be a good option when one spouse requires an assisted living setting and the other stays in the home. To apply for this option, one homeowner must be 62 or older, and one person must keep living in the home.
Other Long-Term Care Options
If assisted living services aren’t financially feasible, consider the following three long-term care options. These housing and care alternatives enable the resident to stay within their familiar community.
Here, the resident remains in their home while receiving home-care services that contribute to their well-being. Personal care, home health, and light housekeeping all fall under home-care services. In addition, the resident may receive transportation to medical appointments, day programs, and errands. In certain cases, Medicaid may pay for some home-based services.
Accessory Dwelling Unit
An Accessory Dwelling Unit (or ADU) is a technical name for an in-law apartment. Other terms for this include a “mother-in-law apartment,” “grandma apartment,” and “granny flat.”
Generally, an ADU is a nicely equipped living space in an existing home, say an extra wing or an apartment over the garage.
This living arrangement gives the resident a degree of independence while family remains close at hand. Note that specific accommodations criteria apply, and zoning approval may be necessary.
Subsidized Senior Housing
Certain federal and state programs pay some housing costs for low- and moderate-income seniors. Each resident often maintains an apartment in a nearby apartment building.
Apartment rental costs are often based on a percentage of the resident’s income. Some initiatives also contribute funds for meals and home care services.
Making the Best Decision
When making the best decision for long-term care, think about your or your loved one’s health and financial situation. Remember that a resident’s needs will likely change over time, so choose a facility that can accommodate that evolution. Then, sit back and enjoy the safety and security of your chosen long-term care facility. Remember that an exceptional care center will focus on your loved one’s needs while encouraging them to enjoy a quality life.