How to Pay for Assisted Living: A Comprehensive Guide

Financial Resources
September 19, 2023

Deciding to transition your parent to an assisted living community marks a significant and often emotional milestone. It's a step that brings new opportunities and care into their life. However, it's important to recognize that assisted living comes with a price tag, with a national median cost exceeding $4,000 per month. Many families are surprised to discover that Medicare does not fully cover assisted living expenses, leading to concerns about how to fund this crucial transition. Fortunately, there are several viable options for financing assisted living costs, including long-term care insurance, life insurance, leveraging home equity, and more.

Who Pays for Assisted Living?

Most families use their private funds to cover assisted living costs. These funds can come from personal savings, pension payments, retirement accounts, or a combination of these financial resources. Many seniors have diligently saved for their retirement years, yet it's not uncommon for family members to contribute to the costs associated with elder care.

Before selecting an assisted living community for your loved one, take the time to assess how you'll finance their stay. Evaluate the financial resources available through insurance, savings, and contributions from family members.Once you have a preliminary budget in mind, consider your parent's preferences and the level of care they require.

Paying for Assisted Living: Where to Begin

The national median cost of assisted living stands at approximately $4,850 per month for a one-bedroom apartment, according to data from A Place for Mom. Keep in mind that this figure serves as a starting point as you create your budget. Depending on your location and your loved one's care needs, your actual costs may vary.

It's important to remember that even if the cost of living is lower in your area, the expenses associated with your loved one's care can be substantial if they require extensive assistance. Assisted living communities typically conduct a care assessment for new residents to determine their level of care needs. Some communities offer varying levels of care at different prices or provide a base care package with the option to add extra care services. Be prepared for the possibility that your loved one's monthly expenses may increase if their care requirements change over time. Planning for these potential changes now can help alleviate concerns about future costs.

Private Pay Financing Options for Assisted Living

  1. Insurance: Health insurance may cover certain medical aspects of care. Review your insurance policy to see if it can provide any financial support.
  2. Life Insurance Policies: Senior's life insurance policies, or those of family members, can be used to finance assisted living. You can explore options like selling the policy to a third party for its market value, using the proceeds to fund a long-term care benefit plan while retaining some death benefits. Alternatively, you can "surrender" a life insurance policy to the insurance company for its cash value, relinquishing ownership without receiving death benefits upon passing.
  3. Home Equity: If your loved one owns a home or other property, they may have the option to use their home equity to cover the costs of assisted living.
  4. Consider a Roommate: Many senior living communities offer shared living spaces, which can be a more cost-effective alternative to a single room or apartment.

Using Other Benefits to Fund Assisted Living

If your loved one has served in the military, worked for the government, or was employed in the railroad industry, they may be eligible for stipends to help cover assisted living expenses.

  • Wartime veterans and spouses could qualify for a pension program through the Department of Veterans Affairs (VA) designed to offset senior care expenses.
  • Federal and postal employees, as well as annuitants and qualified relatives, may apply for Federal Long Term CareInsurance (FLTCI), which can help cover future long-term care costs. It's important to note that employees must apply for FLTCI before retiring, and certain medical conditions may impact eligibility.

We're here to assist you every step of the way.

We understand that navigating the financial aspects of assisted living can be overwhelming, especially when coupled with the emotional aspect of transitioning a loved one into a new environment. Our goal is to provide you with not only practical information but also empathy and support during this journey.

As you embark on this journey, explore these various financing options to ensure your loved one receives the care and support they deserve while maintaining financial stability. Proper planning and a clear understanding of your resources can help make this transition as smooth and stress-free as possible.

If you have questions or need guidance on assisted living options, please don't hesitate to reach out to us at ONELIFE Senior Living or one of our nearby communities. We are dedicated to helping you make an informed decision that ensures the well-being and comfort of your loved one.