How To Pay For Assisted Living

Assisted living can be pricey, and knowing just what you're paying for can begin to feel overwhelming. The good news is that you or your loved one may have options to help cover various assisted living costs.

In this guide, we'll look at how to pay for assisted living with a range of options. These include insurance, family support, home equity, and veterans' benefits. 

Older adults and their families may rely on private pay options to cover the cost of assisted living. Private funding offers families the flexibility to choose the community that offers the ideal level of care for their loved one.

• Private Health Insurance: Private insurance is unlikely to pay for room and board, but may cover medical services such as checkups and screenings. It may also help with short-term care after surgery, specialist visits, and services such as occupational and physical therapy.
• Personal Savings: You or your loved one may have money set aside in savings, checking, or money market accounts that you can easily access to cover regular assisted living fees or one-time costs.
• Investment Withdrawals: You and your loved one can use funds from IRAs, 401(k)s, stock market accounts, and other investments as needed.
• Retirement Income: Your senior loved one is likely to have Social Security income, and possibly a pension or annuity from work, that can help offset costs.
• Sale of Assets: If your loved one has mostly or entirely paid off a mortgage, its sale can generate a significant lump sum. The same applies to the sale of other belongings, such as a car or boat.
• Life Insurance: Switching a life insurance policy to a cash payout or using the cash value in a permanent policy (such as whole life or universal life insurance) can be useful. 
• Long-Term Care Insurance: Long-term care insurance, if available, can also help pay for assisted living costs.
• Family Support: Adult children and other relatives may contribute to care expenses or monthly costs, which can be more reasonable when split between multiple people.

For senior adults with limited income and assets, public programs can help with affordability. Some of these methods of paying for assisted living are government-based, while others come from private sources. They can be a vital source of medical care and personal support for senior adults, and may include the following:

• Medicaid Home- and Community-Based Waivers: HCBS waivers operate as state-run programs, and thus differ by state. Most won't cover room and board, but instead help pay for medical care and personal support.
• Medicaid State Plan Programs: In some states, assisted living services are covered in the regular Medicaid program, rather than a waiver. 
• Optional State Supplement: Many states offer additional payments for low-income seniors, which they can use to cover room-and-board costs in assisted living facilities.
• State, County, and Regional Senior Assistance Programs: Many areas of the country provide assistance for older adults. Examples include Colorado's Old Age Pension, which provides eligible seniors with a $1,005/month benefit, and Massachusetts' Supportive Senior Housing Initiative.
• Program of All-Inclusive Care for the Elderly: Medicare and Medicaid jointly fund PACE, which coordinates care for seniors who qualify for nursing home care. It can cover health-related services for assisted living residents.
• Veteran's Benefits: VA Aid and Attendance or Housebound allowances can help cover personal care, medical services, and other support.
• Non-Governmental Organizations: Some national and regional charities and church groups may offer financial assistance or subsidized housing to older adults. 

According to a CareScout survey, assisted living costs an average of $5,900/month. That can be a burden for many senior adults, even with insurance, public programs, or private funds to draw from. Other strategies to reduce costs include the following:

• Share a Room or Apartment: Sharing a suite or apartment with another older adult can lower the monthly rental cost.
• Negotiate Fees: Depending on the facility, there may be move-in discounts or other incentives, especially in less desirable areas with low housing demand.
• Consider a Lower Level of Care: Communities often offer tiers of care; if you or your loved one can manage their care at a lower level, it's likely to save money.
• Take a Tax Deduction: Senior adults who qualify as chronically ill can deduct some assisted living costs as medical expenses on their federal taxes.
• Consider Section 202 Housing: Low-income seniors may qualify for this benefit through the U.S. Department of Housing and Urban Development. The program offers affordable housing for senior adults, who may pay just 30% of their adjusted income. Check with your local Area Agency on Aging to see what's available in your region.

Whether your senior lives at home, in an independent living community, a memory care facility, or another setting, moving to assisted living can be challenging. With an average cost of $5,900/month, finding financing can be part of that challenge. Caring.com has extensive assisted living resources to help with the move, as well as Family Advisors who can guide you through the process at no cost to you. If you or your loved one has limited resources, several government and non-governmental sources, along with various strategies, can help lower the overall financial burden created by assisted living.

Chidambaram, Priya, et al. What services does Medicaid cover in assisted living facilities? (2025). KFF.org | Cost of care report. (2025). CareScout | Publication 502 (2024), medical and dental expenses. (2024). Internal Revenue Service | Programs of all-inclusive care for the elderly benefits. (n.d.). Centers for Medicare & Medicaid Services | State medicaid plans and waivers. (n.d.). Centers for Medicare & Medicaid Services| Supportive senior housing initiative. (n.d.). National Low Income Housing Coalition | The Supplemental Security Income program. (2022). Social Security Administration