How to Pay for Assisted Living

It’s estimated that 70% of seniors 65 and over will need some type of long-term care, whether that means skilled nursing or assisted living. Unfortunately, neither comes cheap.

According to the most recent Genworth Cost of Care Study, the average cost for care in a one-bedroom, single occupancy unit at an assisted living facility in Connecticut is $4,880 per month, or $58,560 annually. If you don’t want to pay that assisted living cost out of pocket, there are options that can help reduce the cost of assisted living. Medicare, however, isn’t one of them.

Don’t count on Medicare.

Medicare is a great benefit for millions of seniors who need skilled nursing following a surgery or injury. But it’s important to understand that Medicare covers only medically necessary care. That means doctors, hospitals, drugs, and short-term rehabilitation after hospitalization. Furthermore, if you land in a skilled nursing facility, Medicare will limit the number of days you get coverage.

To qualify for Medicare coverage, certain conditions apply:

• You had a prior hospital stay of at least three days.
• You’re admitted to a Medicare-certified nursing facility within 30 days of your prior hospital stay.
• You need skilled care such as physical therapy or skilled nursing services.
• If you meet all the above conditions, Medicare will pay 100% of your costs for the first 20 days. For days 21-100, you pay your own expenses up to $176 per day and Medicare pays any balance. After 100 days, you are fully responsible for the entire cost of your care for each day you remain in a skilled nursing facility.1

Are you a veteran or surviving spouse?

Veterans and surviving spouses of veterans may be eligible for an annual benefit up to $22,938 through the Aid and Attendance Program. This benefit can help pay for the cost of assisted living, home care, adult day services and a nursing home. You must meet certain criteria:

• The applicant must be a patient in a skilled nursing facility, be legally blind, confined to a bed, or have a documented need for assisted living services, such as bathing, dressing, eating, and getting from a bed to a chair.

The application process is complex and requires considerable documentation, so you may want to talk to a VA social worker for help. But the payments could make a big difference in the quality of care you can afford.

What about private-pay options?

Since Medicare won’t cover assisted living cost, and not everyone qualifies for veterans benefits, you may want to consider long-term care insurance.

The sooner you apply for long-term care insurance, the lower your premiums. Most people with long-term care insurance buy it in their mid-50s or mid-60s. If you wait until your 70s to apply, you may not qualify for health-based discounts.

What does long-term care insurance cover?

Many long-term care (LTC) insurance policies cover care in an assisted living and skilled nursing facility, as well as in-home care and adult day care. LTC policies generally start paying benefits after you’ve waited for a period of time, such as 30, 60 or 90 days, called an elimination period. You also have to meet certain “benefit triggers” before benefits are paid. Triggers are defined in terms of Activities of Daily Living (ADLs) and most policies start paying once you need help with two or more ADLs, such as:

• Bathing
• Dressing
• Eating
• Caring for incontinence
• Toileting (getting on and off the toilet)
• Transferring (getting in or out of a bed or chair)

The biggest downside to long-term care insurance is its cost. Other than your age and health, factors that can reduce your cost of LTC coverage include:

• The maximum benefit the policy will pay
• The maximum length of time the policy will pay out benefits
• A longer waiting (elimination) period

Long-term care insurance can help finance the high cost of assisted living, skilled nursing, memory care and in-home health services. And it can provide peace of mind, knowing you’ll be able to afford quality care, when and if the need arises.

Other avenues to investigate.

Review your existing life insurance policies. A whole life policy may have accumulated cash value that you can withdraw or borrow against.

If you or your parents are staying at home, a reverse mortgage can provide a single cash payment, a regular monthly payment, or a line of credit. This type of loan may be a good option if one spouse requires assisted living and the other spouse wants to stay in the home.

Invest in yourself.

In addition to planning how to pay for the cost of assisted living, there’s another important step you can take to reduce the need for long-term care: Stay active. Exercise regularly, eat a variety of healthy foods, and stay connected to friends and family. It’s what we encourage everyone to do at Meadow Ridge, and it’s what makes our community such a vibrant place to be.

Put Meadow Ridge in your plans.

Our 20-apartment assisted living neighborhood in Redding, Connecticut, is a quick drive from Fairfield, Danbury and Norwalk, and has the welcoming feel of a small community. We offer traditional assisted living services — such as assistance with bathing, dressing and medication management — that enable residents to lead full and active lives. To learn more, use our Contact Us form. We’re always happy to answer your questions.