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How to Pay for Assisted Living

One of the most frequently asked questions is, "how will we pay for Assisted Living"? Most people pay for Assisted Living with current income from social security and pensions coupled with the use of savings, including the proceeds from selling a home. Long Term Care Insurance is more and more widely used to offset the cost of Assisted Living. Some people convert life insurance policies to a loan, and others have family members who help pay a share of the monthly fee. No matter what your socioeconomic status, make sure you are taking advantage of all means available that can help pay for assisted living. Here are ways to pay for assisted living:


Long-Term Care Insurance


Long-term care insurance is a policy that is purchased through a private insurance company. The price varies depending on the person's health, age, and amount of coverage. Long-term care refers to a host of services that aren't covered by regular health insurance, such as assistance with daily activities, like bathing, dressing, medication management, assistance with toileting and, transfering in and out of bed. These services can be provided in a non-medical setting like an Assisted Living Facility.


Aid and Attendance Veterans Benefit


The Veterans Aid and Attendance is an enhancement to a veteran's regular VA pension that helps pay for long-term elder care, such as paying for assisted living facilities, in-home care, adult daycare, or skilled nursing. As of 2018, an eligible veteran may receive up to $1,881 monthly, a surviving spouse is eligible for up to $1,211 monthly, and a veteran with a spouse is eligible for up to $2,230 monthly. For more information about VA Aid & Attendance eligibility visit http://www.lifeoptionsforseniors.com/veterans.


Medicaid (aka Medi-Cal in the state of California)


Medicaid is health insurance for people with low-income, and adults/individuals with disabilities. Medicaid is administered by states, according to federal requirements. The program is funded jointly by states and the federal government. There are many programs under the Medicaid umbrella, including the Assisted Living Waiver Program (ALWP). The program is designed to help Medi-Cal recipients stay in an assisted living facility instead of living in a skilled nursing facility. Assisted Living Facilities must be enrolled in the program to receive payment from the government for the services they provide to the resident. And residents must be enrolled in the program to receive care from the ALWP provider.


Life Insurance


A life insurance settlement converts life insurance into money that can be used to pay for long-term care. The company that issued the insurance policy repurchases it for 50 % to

75 % of its face value. The insurance company pays the premiums until the policyholder dies, at which point the company, not the policy's original beneficiaries, receives the money.


Reverse Mortgage


A reverse mortgage is a loan available to homeowners, 62 years or older, that allows them to convert part of the equity in their homes into cash. If you're wondering whether a reverse mortgage might work for your situation, it's crucial to understand how you can qualify

for a reverse mortgage,

  • You must own your home outright or have a single primary lean you hope to borrow against.

  • Any existing mortgage you have must be paid off using the proceeds from your reverse mortgage.

  • You must live in the home as your primary residence.

  • You must remain current on property taxes, homeowner's insurance, and other mandatory obligations such as homeowner's association dues.

  • You must maintain your property and keep it in good working condition.


Annuities


An annuity is a contract between a person and an insurance company that is designed to meet retirement and other long-term goals. You make a lump-sum payment or series of payments. In return, the insurer agrees to make periodic payments to you beginning immediately or at a later date.


Bridge Loan


A bridge loan is a temporary loan, typically for 6 to 12 months, secured by your existing home. If your care needs become urgent, and you cannot wait until the house sells before moving to assisted living, a bridge loan may be a feasible option. The homeowner is assuming the existing home will sell within the length of time specified in the contract.



It's important to note that Medicare does not pay for any Assisted Living Facilities since Assisted Living Facilities are considered non-medical care. Medicare is health insurance and only pays for medical care, such as doctor's visits, hospital stays, durable medical equipment and short term rehabilitation in a skilled Nursing Facility.

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