Common Questions About Paying For Senior Living

What Your Family Needs To Know

You may be overwhelmed when trying to determine the best senior living option for yourself or a family member – in particular, when trying to find the best way to pay for it. We can help with some of the most common questions about financing the retirement years. If you’re looking for more resources when making a financial plan for your loved one or family member’s senior care, you can always contact us.

How much does senior living actually cost?

There are several variables that can drive the cost of senior living – for instance location, type of care, and level of services and amenities. According to a survey by the National Center for Assisted Living, the national median costs of care for assisted living services were $4,500 monthly and $54,000 annually in 2021. Senior living apartments without care generally cost less than assisted living, memory care or skilled nursing.

Is there financial assistance available?

We can help you determine whether financial assistance is available for you or a loved one. Many people don’t realize that U.S. wartime veterans and their surviving spouses can qualify for Veterans Aid & Attendance benefits. This monthly benefit is in addition to a veteran’s regular pension and can help cover the costs of assisted living or nursing care. It is a “pension benefit” and not dependent upon service-related injuries for compensation. Some restrictions apply; however, most veterans in need of assistance qualify.

If you or your loved one fall below a certain income level, Medicaid may help cover a portion of senior community or nursing home costs. Each state has its own set of regulations for qualifying, so be sure to look into Medicaid assistance specific to Alabama.

Is senior living covered by Medicare?

It often comes as a surprise to seniors and their families to learn that Medicare does not cover assisted living costs – other than 100 days of skilled services or rehabilitative care for a qualified stay. The services covered by Medicare Part A include hospital stays, short stays in a nursing home for certain types of illnesses and hospice care in the last six months of life – all after a standard yearly deductible.

Is senior living covered by long-term care (LTC) insurance?

The specifics may vary according to the type of policy, but long-term care insurance benefits can be applied to the cost of nursing homes and/or assisted living. The first step is finding out how to collect on your long-term care policy. These policies are most helpful if you’ve been planning ahead – prices increase in cost with age and poor health, so experts recommend individuals begin planning between the ages of 52-64. If you are looking into long-term care insurance for the future, you’ll find increasingly flexible policies available that can meet needs ranging from adult daycare to assisted living to skilled nursing, with certain options even paying a family caregiver for in-home care. Premiums may be tax-deductible, and benefits from tax-qualified plans are non-taxable, making this option even more appealing.

What are other ways to pay?

Most Americans’ most valuable asset is their home – and there are various options for utilizing this option to assist with the costs of senior living. Many individuals and families first try to pay for senior living with the profits made from the sale of a house, but may also decide to look into other options, like renting the house or using the house to qualify for specialized loans.

One such loan is a bridge loan – it’s meant for people who need access to funds right away but are waiting for a home to sell. As an interest-only loan, it uses the equity of a house to pay senior living expenses until the house is sold. The borrower then pays off the loan with money from the sale of the house when it becomes available.

Get To Know Your Options

You can also consider funding through certain life insurance policies. Often seniors have funds invested in a life insurance policy but find they need financial support while living. In this instance, individuals would ask their life insurance company about “accelerated” or “living” benefits, in which case the company buys back the policy for 50 to 75 percent of its face value. Different rules may apply depending on the company and type of policy. 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.

More questions?

If you have additional questions about senior living and how to pay, reach out to us at Redstone Village so we can provide you with the information you need to make the best choice for you or your loved one.