At My Living Choice, as a senior living directory, we understand the vital importance of assisted living communities in the lives of older adults. Some general questions that arise for many families seeking senior assisted living for their loved ones are: How can I pay for assisted living? Does Medicare pay for assisted living for seniors? And more. People typically pay for their loved one's assisted living via retirement funds, private funds, life insurance, or financial assistance programs. However, that's not all you need to know when planning to pay for assisted living, as certain factors need to be considered before creating a workable financial plan. Here's a blog that covers some of the critical aspects to keep in mind, along with common payment methods that many opt for.
Things To Keep In Mind While Planning For Assisted Living
Deciding to move your loved one to an assisted living community is a substantial decision that requires thorough evaluation, especially when it comes to the financial aspect of the move. Therefore, it's essential to consider specific implications related to this aspect. Here's a brief overview of some of those considerations.
Cost Variability
Different assisted living communities have different costs. Typically, the difference in their pricing is justified by factors such as the community's location, range of amenities offered, and level of care provided. Be mindful of this variability before determining whether the costs are justified.
Community's Contracts
Senior assisted living communities generally offer three different types of contracts: Type A (Life Care), Type B (Modified), and Type C (Fee-for-Service). Each type varies in terms of initial fees, monthly costs, and the level of care provided. So, choose the one that best fits your budget and care needs.
Budgeting
The types of costs you will incur for assisted living are broadly categorized into two parts: ongoing expenses and one-time fees. When planning the budget, ensure that you account for potential cost increases over time.
How To Pay For Senior Assisted Living?
Following are some of the most common resources available that you can use to pay for your loved one's assisted living costs.
1. Private Funds
Also referred to as private pay or out-of-pocket payments, private funds are one of the most commonly chosen payment methods that many families opt for. These funds can be sourced from savings, retirement accounts, social security or pension payments, family contributions, or even proceeds from the sale or rental of real estate.
2. Financial Assistance Programs
Under it, you can access various programs, including Medicaid, Supplemental Security Income (SSI), and long-term care insurance. Medicaid is available to certain individuals who meet specific income and resource requirements. Supplemental Security Income (SSI) provides low-income individuals with a monthly stipend to help cover their care costs.
3. Life Insurance
One may even choose to withdraw the accumulated cash value of their life insurance policy to help cover costs. The option to sell a life insurance policy through a life settlement and receive a lump sum payment for long-term care expenses is also available. Moreover, for terminally ill policyholders, opting for a viatical settlement is another viable option to access their funds tax-free.
4. Veterans Affairs (VA) Benefits
While the Department of Veterans Affairs (VA) doesn't directly cover any of the assisted living costs, it can help veterans and their surviving spouses compensate for these expenses through various programs that provide financial assistance. These programs include Aid and Attendance Pension and Housebound Pension.
Key Takeaways
Moving to a senior assisted living marks a significant transition in the lives of every senior. Whether it's for a short-term stay or a long-term one, proper budgeting and financial planning are crucial to ensure your loved one receives ample care and the appropriate support. While most families use their private funds for this purpose, options such as asset liquidation or financial assistance programs are also available. Consider the points mentioned above before deciding on which payment option you will choose. Those seeking trusted senior assisted living options can partner with us at My Living Choice. As a well-known senior living directory, we can help you find the right option that suits your loved one.
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