Paying for Assisted Living: Six Options to Explore
Assisted living rates will vary from state to state and typically ranges from $2,500 to $6,000 per month in Florida.
The first question most often asked is, will Medicare or other medical insurance pay for assisted living? The answer is no.
1. Long Term Care Insurance
Long-term care insurance policies can be used to pay for assisted living. The policy will need to be activated and may require a health assessment; there may also be a waiting period, typically 90 days, where you would have to pay privately.
2. Veterans Aid and Attendance
Aid and Attendance is a benefit for Veterans of war and their spouses to help pay for assisted living. There are several requirements such as specific service dates, one day served during a time of war, honorable discharge, spouse could not have divorced the Veteran, at least two activities of daily living that require assistance (bathing, dressing, grooming, incontinence), and rent and care services must exceed one’s monthly income. The benefit can provide up to $1,793 per month to a veteran, $1,152 per month to a surviving spouse, or $2,126 per month to a couple if the Veteran needs care.
3. Bridge Loan
Bridge loans are short-term loans of up to $50,000 designed specifically to provide the funds for a move to assisted living. This loan provides a line of credit to finance the first few months of living expenses while seniors sell their home, obtain veterans benefits, or take other actions to free up funds.
4. Life Insurance Policy
A Life insurance policy can be cashed out. The first step is to contact your life insurance company about accelerated or living benefits. If your insurance company cannot or will not buy back the policy, there are third-party companies that do and it is called “life settlement”. Typically the buy back for the policy is 50% of its face value and is determined on the amount of the policy and policy holder’s age. Another option you may qualify for if “life settlement” is not an option, is called a "life assurance" benefit which is a life insurance conversion program, that allows seniors to convert the benefit of a life insurance policy directly into long-term care payments. Typically this program will pay between 15 and 50 percent of the value of the policy.
5. Reverse Mortgage
Reverse mortgages are ideal when one spouse needs assisted living and needs funds to help pay for care and the other spouse wants to remain in their own home. One of the requirements for a reverse mortgage is that one homeowner must be over the age of 62. A reverse mortgage allows you to cash out the value of your home equity, either in a lump sum or in a series of monthly payments. The spouse can remain in the home until death, even if the loan balance exceeds the home's worth.
If your loved one has limited funds, typically a maximum of $2000 per month income and $2000 in assets, not including your home or car, Medicaid may be an option. Medicaid may also be an option when you have a couple who has a “healthy” spouse who desires to remain in their own home and their spouse needs assisted living. The “healthy” spouse may need to protect their portion of the assets so funds will be available should they need care.
Medicaid is a Federally & State funded program and is administered by the state. It is a need-based (financial) qualifying program and pays for medical cost when individuals cannot. Assisted living options will be limited as not all accept Medicaid and the ones that do accept Medicaid may require residents to select "shared" living accommodations and to contribute to the cost of the room.