Assisted living care provides support with daily living activities, such as bathing, dressing, and medication management, to support independent living. The vast majority of older adults will need long-term care at some point; that means understanding the costs as well as creative ways to pay for assisted living is crucial for older people and their families.
Costs of Assisted Living
What Does Assisted Living Cost?
The average monthly cost of assisted living varies by location, with a 2024 national median of around $5,900/month, according to CareScout’s Cost of Care survey.
It’s essential to understand what is included in the monthly fee and what additional costs may be incurred. Assisted living costs typically include room and board, personal care services, and access to amenities, such as dining, transportation, and social activities. Monthly fees may also cover skilled nursing facility care, skilled home health care, and other medical services. Sometimes these amenities are included in base fees, while others are add-ons.
Why Does Assisted Living Cost So Much?
Assisted living residents need a little extra help in day-to-day life, including assistance bathing, dressing, and more. That extra help means paying trained professionals and having the right licenses and insurance for communities to operate safely and legally. Furthermore, added health care costs, including medical services, medication management, and skilled nursing care, can contribute to assisted living and other senior care costs.
In-home Care Costs vs Assisted Living Costs
The 2024 national median monthly cost was $6,292 for homemaker services and $6,483 for home health aides, according to CareScout. These services give seniors access to the services they need to age in place safely, but come at a higher cost, on average, than residential assisted living services do.
Ways to Pay for Senior Care
1. Nonprofit Financial Assistance Programs
Many nonprofit entities offer financial support and other assistance programs specially tailored to the needs of older adults. Low-income seniors and their family members can find and access these local financial assistance programs through the official Eldercare Locator.
2. Reverse Mortgage
Homeowners have the option to tap into the built-up equity in their homes through a reverse mortgage. This payment option allows them to access tax-free funds either as a one-time lump sum or through scheduled payments, all without the need to make monthly payments. However, reverse mortgages often come with steep costs and may impact eligibility for other financial assistance programs like Medicaid.
3. Medicaid
Medicaid is a government-funded health insurance program that may help cover the costs of senior care, including assisted living expenses. The specific services covered depend on both the state’s individual Medicaid guidelines and the particular care requirements of the senior.
4. Home Equity Line of Credit (HELOC)
A home equity line of credit (HELOC) gives homeowners access to a revolving line of credit, enabling them to borrow funds as necessary. Interest is only charged on the amount actually borrowed, not the entire credit limit.
5. Waivers
A large number of seniors require assistance with activities of daily living (ADLs), such as bathing, dressing, and other personal care activities. State-funded waiver programs can provide financial assistance to eligible individuals by helping them access necessary healthcare and long-term care services.
6. VA Benefits
The Department of Veterans Affairs provides a range of veterans benefits that can assist veterans, surviving spouses, and other eligible beneficiaries in covering the cost of personal care services, including care received in skilled nursing and assisted living facilities.
Two key VA programs that help with these expenses are the Aid and Attendance benefit and the Housebound Allowance. These benefits are added to the monthly VA pension for those who qualify.
7. Social Security
Social Security offers various types of benefits that can assist with the expenses of assisted living.
Certain Social Security programs that may help cover senior living expenses include Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), retirement benefits, survivor benefits, and family benefits.
8. Bridge Loans
Short-term bridge loans provide financial support during a funding gap. When it comes to senior living, these loans can help families manage initial expenses, such as move-in costs, while they arrange for more permanent financing.
9. Long-term Care Insurance
Long-term care insurance (LTCI) is a form of private insurance that helps cover the cost of extended care services. Policies typically include coverage for options such as in-home care, adult day programs, and residential care settings like assisted living, memory care, and skilled nursing care (nursing home care) communities. Independent living arrangements are generally not included in LTCI coverage.
10. Life Insurance Policy
Some life insurance policies can be sold for cash, though the amount received is usually less than the policy’s full value.
There are two main ways individuals can access funds from a life insurance policy before it matures or the insured person passes away. One option is a cash surrender, where the policyholder cancels the policy and receives a payout based on its current cash value. The other option is a life settlement, also known as a viatical settlement, where the policy is sold to a third party. While a life settlement typically yields a higher payout than a cash surrender, the process is often more complex and time-consuming.
11. Section 8/Housing Choice Voucher Program
The U.S. Department of Housing and Urban Development (HUD) helps eligible low-income older adults find and access local, affordable housing options through Housing Choice Vouchers, better known as Section 8.
12. Asset Sales
Downsizing by selling major assets like homes and vehicles can provide families the liquid cash necessary to pay for the senior living option of their choice, including assisted living.
13. Family Assistance
Adult children can help their loved ones pay for assisted living costs, using their own financial resources or exploring government assistance programs.
14. Financial Advisor Services
Older adults and their families can work with a financial advisor to navigate the complex process of paying for assisted living, finding new ways to pay for services.
15. Communal Dwelling
Communal living means more friends and fewer living expenses. Sharing an apartment, renting out a room, or moving to an assisted living community can all be financially savvy moves for seniors looking to save on living costs if they currently live alone or hire in-home care services. Opting for a shared room, rather than a private suite, in a senior living community can further reduce costs.
Frequently Asked Questions
How can you pay for assisted living when you can’t afford it?
Ways to pay for assisted living with little to no money include:
- State-sponsored waiver programs
- Supplemental Security Income (SSI)
- Social Security Disability Insurance (SSDI)
- Local financial assistance programs
Does Medicare pay for assisted living?
Medicare does not typically pay for room and board associated with assisted living. It may, however, cover other expenses for services received in assisted living, like on-site skilled nursing care services.
What can a nursing home take for payment?
A skilled nursing care community can receive payment from residents through various means, including private pay, long-term care insurance, and public assistance programs. What they cannot do is seize private assets, like a house, from residents and their family members. They can, however, file estate claims when a resident passes.
Can I buy long-term care insurance for my parents?
Yes, adult children can purchase long-term care insurance policies for their parents.
However, it’s different than parents buying these policies for themselves. If the adult children purchase the insurance for the parents, the children will be the responsible party for payments. If the parents are so unwell that they cannot purchase insurance for themselves, adult children may not be able to buy a policy, as many private insurance companies will deny coverage for certain conditions, or the rates may be so high that it is not financially feasible.
How can you make assisted living affordable?
There are many creative ways to pay for assisted living, including tapping into home equity and exploring local resources. If your family is ready to explore assisted living options, contact Avista Senior Living. One of our representatives can help you explore your options and make a financial plan to help your family get peace of mind that your aging loved one gets needed care at an affordable rate.
Disclaimer: Each person’s situation is unique. This article is for general informational purposes only and is not intended to take the place of medical, financial, tax or legal advice.