Pay for Assisted Living

9 Smart Ways to Pay for Assisted Living
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As you're weighing senior care options for your loved one, cost is likely a top factor. The good news? Depending on what care your loved one needs, assisted living can be much more affordable than nursing home care or long-term in-home care. Assisted living rents vary, but you can generally expect to pay $2,000 to $5,000 per month (compared to $5,000 to $10,000 and up for nursing homes). If your loved one doesn't need close medical supervision, assisted living might be your best bet, financially speaking.

But how will you pay for assisted living? Explore eight creative ways to afford assisted living that you haven't thought of yet.

Important note: Medicare won't pay for assisted living beyond short-term rehabilitation.

1. Pay for assisted living with veterans benefits.

If your loved one (or your loved one's spouse) was a veteran, you're in luck when it comes to residential care. Veterans benefits can be used to pay for residential care in a variety of situations. One set of benefits is available to those with service-related injuries or disabilities; another set of benefits, known as Aid and Attendance, is available to any veteran or surviving spouse who's disabled and whose income is below a certain limit. To qualify for and access these benefits, you'll need to go through the Veterans Administration, which can be a tricky and time-consuming process. It's extremely helpful to work with a geriatric planner who knows the ins and outs of the system. Many senior living communities offer a financial concierge service that can include guiding you through the process of qualifying for benefits.

Another option is to work directly with services such as Elderlife Financial, which works with assisted living and continuous care retirement communities (CCRCs) to provide this concierge service. Elderlife Financial connects you with its network of veterans benefits experts, who can help obtain the maximum benefits your loved one is entitled to.

2. How to Use a Life Insurance Policy to Pay for Assisted Living

If your loved one has a life insurance policy, he probably purchased it long ago, thinking to provide support to his family after his death. But a life insurance policy can also provide financial support now, if that's when the money would be most helpful. To cash out a policy, ask your life insurance company about "accelerated" or "living" benefits. Commonly, the company that originally issued the policy buys it back for 50 to 75 percent of its face value. The amount is decided based on the policy amount and monthly premiums as well as the policyholder's age and health. Different rules may apply depending on the company and type of policy. For example, some policies can only be cashed in if the policyholder is terminally ill; others are much more flexible.

If the company that issued the policy won't cash it in, don't worry. Your loved one can also sell the policy to a third-party company in return for a "life settlement" or "senior settlement," which is usually a lump sum of 50 to 75 percent of the policy's face value. After buying the policy, the settlement company pays the premiums until the policyholder dies, at which point the company, rather than the policy's original beneficiaries, receives the benefits. Another option, known as a "life assurance" benefit or life insurance conversion program, allows seniors to convert the benefit of a life insurance policy directly into long-term care payments. Life insurance conversion typically pays between 15 and 50 percent of the value of the policy -- less than a life settlement -- but is available for lesser-value policies that might not qualify for life settlement.

RELATED -> FIND ASSISTED LIVING NEAR YOU

3. How to Use Long-Term Care Insurance to Pay for Assisted Living

If you or your loved one bought care insurance, you're one of the lucky ones. Long-term care insurance policies apply to assisted living care; all you need to know is how to collect on it. Some long-term care policies have a specific designated benefit for nursing home care, based on a mental or physical diagnosis, which can be used to pay for assisted living. Or the policy may set a designated payment for home care, which can be paid directly to the assisted living facility or to the beneficiary, who then uses it to pay for assisted living.

One more thing: If your loved one didn't buy long-term care insurance, it's probably too late now to consider this option. But there is time to sign up for a long-term care policy yourself, so you don't put your own family in the same pickle in the future.

4. How to Use an Annuity to Pay for Assisted Living

If you have a nest egg but you're concerned about outliving your resources, an annuity may be a good option. When you purchase an annuity, you pay a lump sum up front -- and receive regular payments back over a promised period of time, usually the rest of your life. An annuity can help you stretch your budget and be sure that you'll always have at least some money coming in even if you live longer than you expect.

The big benefit of annuities is that you continue to receive money regularly, even if your purchase premium runs out. If you live a really long time, you get more back than you put in. The underwriter takes the risk that you might live longer than the money lasts -- and makes an extra profit if you die early. Underwriters don't go into the annuity business expecting to lose money, but annuities can still be a better deal for you than just consuming your money year by year.

Another benefit is that annuities aren't fully counted as assets by Medicaid when you apply for government assistance. The income from the annuity is counted as a "resource," but the much larger sum originally used to purchase the annuity is not.

Annuities are complex financial tools. There are many variations. Some you buy now to get future payments, others deliver immediate payments; some are based on a fixed interest rate, others work off variable rates. You'll want to do some homework and talk to a trusted financial adviser about what annuity options might be appropriate for your situation.

Be very cautious when investing in annuities. There are unscrupulous marketing schemes pushing phony annuity deals that target vulnerable seniors through community centers, adult education seminars, telemarketing, and slanted advertising. And outright annuity fraud is more common than most people realize. Always use your common sense filter: If it sounds too good to be true, it might be a scam. You'll want to choose a reputable company when you buy an annuity, and work with a representative who comes highly recommended. And make sure your representative helps you think through some of the trickier details, like inflation.

5. How to Use a Reverse Mortgage to Pay for Assisted Living

If your loved ones own their home outright or have only a small mortgage on it, a reverse mortgage might be just the solution you're looking for.

A reverse mortgage allows you to cash out the value of your home equity, either in a lump sum or in a series of monthly payments. The bank decides on a value based on what the home is worth, interest rates, the applicant's age, and other factors, and the loan balance gradually increases over time. (If a bank holds a mortgage on the house, it has to be paid back before you can begin receiving payments.) The borrower can stay in the home until death, even if the loan balance exceeds the home's worth. Upon death, the loan balance must be repaid, which usually means selling the home.

Reverse mortgages were originally developed to help widows remain in their homes after the breadwinner passed away. Today they work best when one parent needs assisted living but the other can remain in the home. To apply for a reverse mortgage, one homeowner must be over the age of 62, and one person must continue to live in the home.

Be sure to do your homework about the pros and cons of reverse mortgages -- they aren't for everyone. For example, it's probably not a great choice for a beloved property that you want to keep in the family.

Finally, a reverse mortgage is a big commitment, so it's important to work with a reputable company. Make sure you understand the terms and read the fine print, as there are many rules about homeowners' insurance and mortgage insurance and keeping the property well maintained. There may also be high fees involved, or clauses that make it easy to lose the home. The Consumer Financial Protection Bureau recently reported that reverse mortgage scams and foreclosures are on the rise.

6. Rent out Your Home to Pay for Assisted Living

If only one parent is still living, or if both parents need assistance with daily living, the family home can be an important resource. Selling is an option, of course. But in many families, Mom and Dad's house is cherished and family members aren't ready to make this decision. In this case, consider renting out the house and using the rental income to pay for assisted living. The idea of being a landlord might seem scary, but for a percentage fee you can hire a service to manage the property for you.

RELATED -> FIND ASSISTED LIVING NEAR YOU

7. How to Use Medicaid or SSI to Pay for Assisted Living

If you don't have much in the way of savings or other financial assets and your income is low, you may qualify for government assistance to pay for long-term care.

Start with Medicaid, which is run as a partnership between the states and the federal government. In many states the programs go by another name, so look up the name of your state's program online or in the government pages of your phone book (example: Arizona Long-Term Care System). Medicaid eligibility is different from state to state, but typically you must have less than $2,000 in assets, in addition to your home and your car, in order to qualify.

Only some assisted living communities will accept Medicaid, and Medicaid beds are usually limited. To find long-term residential care options near you, check with your local Area Agency on Aging. To help you navigate the maze of signing up for public benefits, you can also call for a free consultation from a Government Health Insurance Counselor.

Important note: Beware of trying to qualify for Medicaid by "gifting" money and other assets to adult children or other family members, also known as "Medicaid spend-down." This once-popular strategy isn't as easy as it sounds and can backfire badly. The government has become increasingly strict about Medicaid qualification and has the right to do a "look-back," going over your financial transactions for the past five years. Any gifts of money or assets made during this time are counted as resources, including assets put into an irrevocable trust. If you're caught trying to spend down your resources to qualify for Medicaid, the penalties are steep -- including disqualification from receiving Medicaid for a lengthy period of time.

If you have a disability, another option is supplemental Social Security income (SSI). Also administered by the state, SSI is part of the governmental safety net for those who are impoverished and partially or totally disabled by illness or injury. SSI comes in the form of monthly payments, which you could use to pay for nursing home care or assisted living. To qualify for SSI, contact your state disability department. You'll need to document your financial status and you'll also need a doctor to certify that you can't work because of a medical disability.

8. How to Pool Family Resources to Pay for Assisted Living

If you're worried about Mom or Dad living alone, other family members may be worried, too. Getting everyone together to talk about it sometimes makes it possible to find a solution, such as pooling assets and trading money for time. For example, if one or two siblings or family members handle the brunt of daily care, such as driving to medical appointments, others with less flexible work schedules might contribute money instead. Or if there's a family home that no one wants to sell yet, siblings with available funds might pay for assisted living with the promise of repayment when the house is sold.

The research and paperwork associated with finding and choosing among assisted living facilities and qualifying for financial support is a big job. Sometimes families get stuck because no one feels qualified to take on the task. It can be a huge relief to work with a geriatric care manager or senior move manager who knows the resources in your area. A care manager can work with the entire family to present options, resolve roadblocks, and help you find the perfect situation for your loved one.

Money matters can also bring up family tensions. If you're having trouble communicating about this challenging topic, learn more about how to handle family conflicts. You might also enlist the help of a mediator.

9. Pay for Assisted Living With a Bridge Loan

If your loved one doesn't have a lot of free cash or financial assets that are easily liquidated, the answer might be a bridge loan, a relatively new option developed by Elderlife Financial. Bridge loans are short-term loans of up to $50,000 designed specifically to provide the funds for a move to assisted living or a continuing care retirement community (CCRC). They come in two types. The first type is an unsecured (no collateral required) line of credit intended to finance the first months of living expenses while seniors sell their home, obtain veterans benefits, or take other actions to free up funds.

Interest rates for these lines of credit range from 8.25 to 12.5 percent, so this option is best used when the time to payback is relatively short. (Borrowers have up to five years to repay, but most repay the loans within a year, according to the company.)

The second type, called the Capital Access Program, is a lower-interest, lump-sum loan secured by real estate or another asset that the company recently introduced. It's designed to help seniors come up with the large up-front entrance fee typically required for a CCRC.

Seniors (or other family members) qualify for both types of loans based on the usual criteria, such as credit score, credit history, and debt-to-income ratio. The senior or an adult child can be the borrower, and up to six family members can cosign the loan application. Of course, as with any loan, cosigners are liable if the borrower runs into trouble with repayment. In many cases, payments can be made directly to the CCRC for convenience.


about 1 month ago, said...

I am seeking a assisted living for a friend that I was in Vietnam with! He has a 100% disability rating for his heart and PTSD! I understand that the veterans will pay ONLY $1732 per month towards your fees! Is this correct?? I Am seeking a Veterans home that is operated by the U.S. dept. Of Veterans Affairs! If none of you have nothing to do with the Veterans affairs ( except by accepting their limit) please do not respond to my request unless they can deduct $2000.00 from your fees! ... Show more I am seeking a assisted living for a friend that I was in Vietnam with! He has a 100% disability rating for his heart and PTSD! I understand that the veterans will pay ONLY $1732 per month towards your fees! Is this correct?? I Am seeking a Veterans home that is operated by the U.S. dept. Of Veterans Affairs! If none of you have nothing to do with the Veterans affairs ( except by accepting their limit) please do not respond to my request unless they can deduct $2000.00 from your fees! Thank you! Hide


about 1 month ago, said...

Please include all resources available including SSA,SSI and VA availability Please include all resources available including SSA,SSI and VA availability Hide


2 months ago, said...

I have Medicare/Medicaid and live on a very low income would love to find a place that offers assistant living! Please help me! I have tried doing it on my own but I don't seem to succeed! Thank you, Janet Jenkins I have Medicare/Medicaid and live on a very low income would love to find a place that offers assistant living! Please help me! I have tried doing it on my own but I don't seem to succeed! Thank you, Janet Jenkins Hide


2 months ago, said...

Hello this is Quincy Brown and I am typing this note on behalf of myself and family to Thank you taking over my single rent by lease contract with AnAheim Housing Authority and the Biltmore Colony rent by lease which my contract is up this December. My spouse and I will down their by the 15 th of this month to finalize the deal. Again thank you. Hello this is Quincy Brown and I am typing this note on behalf of myself and family to Thank you taking over my single rent by lease contract with AnAheim Housing Authority and the Biltmore Colony rent by lease which my contract is up this December. My spouse and I will down their by the 15 th of this month to finalize the deal. Again thank you. Hide


3 months ago, said...

Selling real estate is an option for paying for assisted living care. For many people a reverse mortgage is not a good choice because of all the paperwork and time involved. Selling the real estate to someone who can pay cash and close in 7 days or less is a better option. Selling real estate is an option for paying for assisted living care. For many people a reverse mortgage is not a good choice because of all the paperwork and time involved. Selling the real estate to someone who can pay cash and close in 7 days or less is a better option.
 Hide


3 months ago, said...

I am 65 DISABLE female cornanary heart disease, chronic copd, Major depressive disorder, here's, neurological issues, incontinence, can do minimal for self, past brain anurysum 1988, new growth in same area. Have care giver 3 - 4 day a week. No collateral, medicare/MEDICAID, $840.monthly. Require assistance in some daily living activities. Am I good candidate is a nice Asst. Lvng Fac. What other than clothes am I allowed to bring. Awaiting your response. I am 65 DISABLE female cornanary heart disease, chronic copd, Major depressive disorder, here's, neurological issues, incontinence, can do minimal for self, past brain anurysum 1988, new growth in same area. Have care giver 3 - 4 day a week. No collateral, medicare/MEDICAID, $840.monthly. Require assistance in some daily living activities. Am I good candidate is a nice Asst. Lvng Fac. What other than clothes am I allowed to bring. Awaiting your response. Hide


4 months ago, said...

I am 58 and disabled and crippled in my right lower leg. I have early onset dementia no home, no vehicle, no collateral. I am on Medicaid and draw $740.00 each month with $81.00 worth of food stamps. I e been approved for a caretaker seven days a week not to go over 40 hours per week. Would I qualify for asisted living with no out of pocket expenses? I am 58 and disabled and crippled in my right lower leg. I have early onset dementia no home, no vehicle, no collateral. I am on Medicaid and draw $740.00 each month with $81.00 worth of food stamps. I e been approved for a caretaker seven days a week not to go over 40 hours per week. Would I qualify for asisted living with no out of pocket expenses? Hide


4 months ago, said...

I'm 55 years old and disabled. My only resources is social security disabling which is under 1650.00 monthly gross pay. I also have a disabled son. He is on SSI which is about 925.00 monthly gross. He has a traumatic brain injury since the age of 4 months old. He is very high functioning but still requires assistance in social skills and everyday ADL. We both need a separate apartment since living together in a small apartment is deterioratin me quickly, physically and mentally. He also... Show more I'm 55 years old and disabled. My only resources is social security disabling which is under 1650.00 monthly gross pay. I also have a disabled son. He is on SSI which is about 925.00 monthly gross. He has a traumatic brain injury since the age of 4 months old. He is very high functioning but still requires assistance in social skills and everyday ADL. We both need a separate apartment since living together in a small apartment is deterioratin me quickly, physically and mentally. He also needs the chance to prove himself. He is a full time college student. GPA 3.5 Hide


4 months ago, said...

I called caring.com and the gentleman that answered the phone ask me a hundred questions and get a free recording messages.last time I called carry not, I had a nice woman to give me all the information. I called caring.com and the gentleman that answered the phone ask me a hundred questions and get a free recording messages.last time I called carry not, I had a nice woman to give me all the information. Hide


4 months ago, said...

I am 54 yrs old have been on disability for 15 yrs had a heart transplant done and many surgeries can I still get assisted living help ? I am 54 yrs old have been on disability for 15 yrs had a heart transplant done and many surgeries can I still get assisted living help ? Hide


5 months ago, said...

Hi everyone, Thanks for your comments! For those seeking help with finding assisted living or who have outstanding questions about senior living options, please do get in touch with our team of family advisors: (800) 325-8591 This is a free, phone-based service that can help you understand your local options, get some starting rates, learn what other consumers have said in reviews, and schedule tours. The service is available seven days a week. We also have an online directory you can... Show more Hi everyone, Thanks for your comments! For those seeking help with finding assisted living or who have outstanding questions about senior living options, please do get in touch with our team of family advisors: (800) 325-8591 This is a free, phone-based service that can help you understand your local options, get some starting rates, learn what other consumers have said in reviews, and schedule tours. The service is available seven days a week. We also have an online directory you can peruse: https://www.caring.com/local/assisted-living-facilities Hide


5 months ago, said...

I would like the assisted living for my husband at the age of 90 my age is 66 I still work. But! I would like to clean cook and do our laundy is there way for that I would like the assisted living for my husband at the age of 90 my age is 66 I still work. But! I would like to clean cook and do our laundy is there way for that Hide


5 months ago, said...

Please just inform me about what is available with minimal care withclients still functioning. Please just inform me about what is available with minimal care withclients still functioning. Hide


5 months ago, said...

My Mother is at an assisited living facility, but will have to move out because she was told she didn't qualify for Medicaid after being told she was. the case worker called me a week after she went in and said she had made a mistake! The facility has given us a price of $2300.00 But that leaves me paying her supplemental ins. premiums and also for her incontinence needs and prescriptions. We have applied for VA benefits but don't know how long that will take. ANY advice would be greatly... Show more My Mother is at an assisited living facility, but will have to move out because she was told she didn't qualify for Medicaid after being told she was. the case worker called me a week after she went in and said she had made a mistake! The facility has given us a price of $2300.00 But that leaves me paying her supplemental ins. premiums and also for her incontinence needs and prescriptions. We have applied for VA benefits but don't know how long that will take. ANY advice would be greatly appreciated! The deadline is 9/23 if we don't bring her home them we will be incurring more debt with the facility. Hide


6 months ago, said...

Need assistance in finding facility for adult daughter who's diagnosed schizphrenia. Live in mcdonough George Need assistance in finding facility for adult daughter who's diagnosed schizphrenia. Live in mcdonough George Hide


6 months ago, said...

I provide assisted living for my father in my home. Can I draw up a contract between us so I can receive income from him for care? I was thinking I could spend down his $ on assisted living expenses. I would claim it as income on my taxes. I am a licensed nurse, currently giving him IV antibotics at home, and have been caring for him for 4 years, its taking more of my time. Ive had to cut my hours to meet his needs. I provide assisted living for my father in my home. Can I draw up a contract between us so I can receive income from him for care? I was thinking I could spend down his $ on assisted living expenses. I would claim it as income on my taxes. I am a licensed nurse, currently giving him IV antibotics at home, and have been caring for him for 4 years, its taking more of my time. Ive had to cut my hours to meet his needs. Hide


7 months ago, said...

What if you don't have any family and only have social security What if you don't have any family and only have social security Hide


8 months ago, said...

What age does one have to be to qualify for assisted housing? What age does one have to be to qualify for assisted housing? Hide


10 months ago, said...

I live in New York and have been looking for assisted living for my 81 year old mother. The best case scenario for cost is $6,000 to. $10,000 a month. Incredibly expensive and out of reach when you consider in addition to rent you pay for a level of care which is determined by facility as well as medication management. These can add an additional $800 to $2200 a month. Also some facilities raise the rent yearly!! Talk about taking advantage of people. My brother and I feel so badly that... Show more I live in New York and have been looking for assisted living for my 81 year old mother. The best case scenario for cost is $6,000 to. $10,000 a month. Incredibly expensive and out of reach when you consider in addition to rent you pay for a level of care which is determined by facility as well as medication management. These can add an additional $800 to $2200 a month. Also some facilities raise the rent yearly!! Talk about taking advantage of people. My brother and I feel so badly that we can't afford to help my mom more. Hide


11 months ago, said...

Does Medicaid pay for a in home Caregiver?
 Its for my sister she is in need of help and daily need such as Cooking Light cleaning shopping Dr appointment things like that.The ironic part about this is that I used to do this I worked in healthcare for over 35 years.I am the only advocate for my family I had cancer surgery in 2011 and unfortunately I had to file for Social Security disability because my surgery left me with the condition called Brachial Plexopathy.I only can use NY right... Show more Does Medicaid pay for a in home Caregiver?
 Its for my sister she is in need of help and daily need such as Cooking Light cleaning shopping Dr appointment things like that.The ironic part about this is that I used to do this I worked in healthcare for over 35 years.I am the only advocate for my family I had cancer surgery in 2011 and unfortunately I had to file for Social Security disability because my surgery left me with the condition called Brachial Plexopathy.I only can use NY right hand.I miss working with people as I was very good at what I did,I recently had to put my father into a nursing home due to dementia.Ive always then the caretaker in my family now I find myself in a position that I need help taking care of my family.I'm very thankful for this site I dont feel so alone anymore. I realize how hard it is to be a caregiver especially when it comes to family I think all of you and if anybody has any advice for me please feel free to let me know my name is Diana.My sister has Medicaid is anybody familiar with in home care that takes Medicaid if so please email me back.
 Sincerely,
 Diana Hide