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How do I pay for assisted living?

Posted December 17, 2014 in Advice Column, Downtown


A common misconception about assisted is that you must have cash on hand in order to fund residence at an assisted living community.  The truth is that there are several payment sources commonly used.  These include private funds (whether from the resident or from other family members), Long-term care insurance, investment portfolios, veterans benefits, and Elderly Waiver. Many older adults sell their homes to utilize the equity to pay for their new home in an assisted living community.

If an individual does not want to sell their home, they may consider paying for assisted living through a reverse mortgage.  In this scenario, homeowners essentially borrow against the home’s value.

It is important to understand your long-term care insurance policy.  Many older adults thinkt that assisted living is not covered because the policy specifically states “nursing home.”  Policy holders are encouraged to call their provider and inquire about the coverage.  They may be surprised to learn that coverage is available for assisted living.  In one example, the policy stated that the resident must require assistance with two or more ADLs (activities of daily living).  Examples of ADLs may include assistance with bathing, transferring from bed to wheelchair, dressing, and ambulation.  Some policies are “facility-only” policies which means that the care must occure in a licensed assisted living community—not in a home or unlicensed facility.

Veteran’s benefits can help offset the costs of assisted living programs as well. You will need military discharge papers (or copies) in order to qualify.  You must have a valid medical condition that is validated by a physician.  Certain financial conditions also apply.  Finally, you must complete the Veteran’s Application for Compensation and/or Pension, VA Form 21-526, Parts A-D.    

Medicare doesn’t offer benefits for assisted living care, but sometimes Medicaid will.  For example, there is a program called Elderly Waiver that could also help defray the costs.  Elderly Waiver is a state-funded Medicaid program.  The amount of the benefit depends upon the amount of services.  This program is available to adults 65 or over with specific healthcare needs in order to remain at home versus a nursing home.  Again, financial conditions apply.

Paying for assisted living does not have to be a challenge.  With planning and foresight, assisted living can be an affordable option with the variety of funding sources available.  Tour a community and speak with a Community Relations Coordinator.  These individuals are trained in helping you navigate through and identify payment sources. 


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