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How Do I Pay for Assisted Living?

With all of the emotional and physical considerations associated with making the move into an assisted living facility, a factor that often gets lost in the shuffle is the financial. Taking a good, comprehensive look into the options available for payment ahead of the move is the best way to not get caught off guard by big, unexpected bills or possible refusal of payment. There are a lot more options out there than you might think.

It’s also important to consider that many assisted living facilities have two different fee structures – fee-for-service or all-inclusive. With fee-for-service, you’ll only pay for the services that you actually use. This includes the room, health care, meals, etc. All-inclusive lumps all of those services into one, which is usually the best deal. As of 2020, the average monthly cost of an assisted living facility is around $4000, which works out to about $130 a day.

Medicaid

By far the most common assisted living payment method for most facilities is Medicaid.

Medicaid payments usually come directly from a few different waivers that they offer – 1915(c) and Home and Community Based Service (HCBS). However, not every state will take these waivers. As of 2019, 44 states currently accept them, including the District of Columbia and many professionals estimate it is likely to be accepted nationwide soon.

However, a newer trend in Medicaid is a move away from waivers in favor of a “managed care” model or a Personal Assistance Service. Check with your specific Medicaid plan to see exactly which you are in.

The good news is, many states are actually increasing the amount of financial assistance they are providing to people entering into assisted living. The logic behind that is that assisted living ends up costing far less than a skilled nursing facility over the long run, which means the state ends up paying less overall. However, even with this increased financial support, some assisted living facilities will not take Medicaid as their reimbursement rates are still lower than other forms of payment.

Veterans’ Aid and Attendance Benefit

If you served in the military long enough to have earned any benefits, you may be eligible for the Aid and Attendance Benefit. This is essentially a pension program, allotting money monthly for people who qualify. The downside of the Aid and Attendance Benefit is that it can be difficult to actually qualify for the program, and the wait times can be extensive. Here a few of the non-negotiable qualifications:

  • Must be a veteren or surviving spouse either over the age of 65, or be officially disabled
  • Must be a “wartime veteren,” during either the World War II, Korean War, Vietnam War, or Gulf War (see specific date qualifications)
  • Can not have had a dishonorable discharge
  • Must require help with activities of daily living (ADLs)
  • Income limits – income must be less than the pension that you are eligible for

To apply, reach out to your local pension management center or visit your regional VA office. All applications are processed by the VA in the order they were received, which generally means it can take up to 9 months to find out if you were approved. 

Assisted Living Loans

A last resort, in many cases, is taking out an assisted living loan. While this isn’t a long term solution, as they were designed to bridge the gaps in financial assistance for no more than two years, they will allow you to deal with an unexpected situation. It can be a good option while you’re waiting for other programs to take effect. 

Assisted living loans work essentially the same as a mortgage. They can be obtained through a bank, private lender, or credit union. They are subject to interest, but also often comes with low fixed rates and longer terms for payoff.  

Paying for an assisted living facility doesn’t have to be a terrifying concept. Knowing your options can help sort out fact from fiction, so that you can put the financial behind you and move on to worrying about packing. If you have questions, don’t hesitate to reach out to the facility you plan on moving into to see if they have suggestions or can help connect you to programs that you may qualify for. 

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