Tips for Financing Assisted Living for a Senior
Is your family beginning to explore assisted living on behalf of a senior loved one? While families are often able to support an older adult’s needs at home for a while, it’s not always possible to do so over the long term. Trying to balance caregiving with a career and your own family isn’t easy. Your quality of life, and the senior’s, will likely improve once you find an assisted living community that is a good fit for their interests and needs.
When families begin the search for assisted living, two questions that usually come up early in the process are how much it will cost and what payment methods are accepted. Many people are surprised to learn their parent’s Medicare or other health care insurance doesn’t pay for assisted living costs. Others aren’t aware that there are programs available that may help make care more affordable.
That’s why we thought it was important to include this resource as part of this Assisted Living Decision Toolkit. We hope this information will help your family better understand the costs associated with assisted living and the types of funding your family member might qualify to receive.
Understanding the True Cost of Assisted Living
As you start getting to know each assisted living community and comparing the costs, you will soon discover that every organization has its own unique pricing structure. To make certain you understand all the expenses you may incur, ask for a list of amenities and services included in the monthly fee and what additional fees you are likely to incur. You might find this Cost Comparison Chart.
Depending on the area of Indiana you are searching in, you’ll likely find the costs can vary significantly. According to a 2021 Genworth financial survey, the national median cost for assisted living is $4,283 per month, which is slightly less than the national average of $4,500.
For older adults who want a large apartment or a community that offers more services and amenities, the monthly fees will be higher. The same holds true if the senior has greater care needs. Most assisted living communities assess level-of-care charges based on how much staff time each individual resident requires.
The base fee for assisted living communities often includes:
- On-site caregivers available 24/7
- Choice of apartments and floor plans
- Safe, supportive environment
- Healthy meals and snacks each day
- Range of daily activities and outings
While the expenses associated with assisted living are usually paid for with private family resources, there are other options to explore. Let’s take a look at five of the most popular.
Programs That May Help Finance Assisted Living
Here are a few suggestions to research as you are putting your budget together:
- Benefits for veterans: Besides a veteran’s regular pension, additional funds are available for those who qualify to finance senior care. Known as the VA Aid and Attendance benefit, it can be an option for a veteran or their surviving spouse. Visit the Pension Benefits section of the U.S. Department of Veterans Affairs website to learn more.
- Long-term care insurance: If your parent purchased a long-term care insurance policy, review the policy to see what it covers. Adult children sometimes mistakenly assume long-term care insurance pays only for nursing homes. Many policies also cover home care services and assisted living communities if certain conditions are met. Call the broker for clarification if you have any questions.
- Medicaid waiver: In the state of Indiana, Medicaid doesn’t directly pay for assisted living, but there is a waiver program that does. Designed to help seniors receive the care and support they need, the Indiana Aged and Disabled Medicaid Waiver is accepted by some assisted living communities. The program offers financial assistance to individuals in Medicaid-approved assisted living communities.
- Bridge loans: For most people, their house is their greatest financial asset. Many seniors need the equity from it to finance assisted living. But many find it easier to complete the move to assisted living before listing their house to sell. Others want to wait to liquidate investments until the market is more favorable. In situations like these, a short-term bridge loan may be a solution. These loans allow a senior to borrow against assets so they can move to a senior community, and then pay back the loan after investments or assets are sold.
- Life settlement funding: It’s somewhat common for people to have older life insurance policies they purchased for peace of mind when they were raising a family. Life settlement companies will purchase these policies from seniors at rates higher than the cash surrender value, though less than face value. The proceeds can then be utilized to finance assisted living. Speak with an attorney or a financial advisor for a referral to a trusted life settlement company.
Share This Assisted Living Decision Toolkit
If you find this information helpful as you create a budget for a senior loved one’s move to assisted living, we encourage you to share it with family members and friends. It can help them feel confident they are making an informed decision for their senior loved ones.