Making Assisted Living Care More Financially Accessible
It's probably no surprise to you that affording quality care in an assisted living community isn't cheap. So how can you manage these costs, without sacrificing the things you or your loved one need the most in a senior community?
The key lies in exploring various financing options for assisted living care.
Join us as we take a look at different payment methods, including Medicare coverage, long-term care insurance, and leveraging home equity, to make assisted living more financially accessible.
Financing Options for Assisted Living Care
In 2024, the median cost of assisted living in the United States is around $4,500 per month. But costs can vary widely depending on location and the level of care required.
When it comes to financing assisted living care, there are several options to consider. One of the most common methods is using personal savings.
Many people set aside money specifically for their retirement and senior care needs. These savings can be used to pay for the monthly costs of an assisted living community.
Family contributions are another option. Sometimes, family members come together to help cover the costs. This can be especially helpful if personal savings are not enough. It's important to have open and honest discussions with family members about what is needed and how they can help.
Retirement funds, such as 401(k) plans and IRAs, can also be a valuable resource. These funds are often specifically intended to support individuals during their retirement years.
Using these funds to pay for assisted living ensures that you have the necessary support as you age.
Veteran benefits are available for those who have served in the military. These benefits can provide financial assistance for senior care, making assisted living more affordable for veterans and their families. It's important to explore all available veteran benefits to maximize this resource.
Medicare Coverage and Its Limitations
Many people assume that Medicare will cover all their needs in an assisted living community. But Medicare has its limitations when it comes to paying for assisted living.
Medicare is designed to cover medical expenses for those over 65 or with certain disabilities. It does not typically cover the costs of long-term care in an assisted living community.
Medicare Part A covers hospital stays, skilled nursing care, and some home health services. While this can help with short-term medical needs, it does not pay for the daily living assistance provided by assisted living communities.
Medicare Part B covers outpatient services like doctor visits and medical supplies. Again, this does not include the cost of assisted living.
There are some situations where Medicare might cover certain costs associated with assisted living. For instance, if a resident needs short-term skilled nursing care or rehabilitation after a hospital stay, Medicare might cover these services.
But these are temporary solutions and do not address the long-term financial needs of living in an assisted living community.
Utilizing Long Term Care Insurance
Long term care insurance is an important resource for covering the costs of assisted living. This type of insurance is specifically designed to help pay for long-term care services. It can include assistance with daily activities and medical care.
Having a long term care insurance policy can provide peace of mind and financial security for those planning to move into an assisted living community.
Purchasing a long-term care insurance policy involves paying regular premiums. In return, the policy helps cover the costs of care when it becomes necessary.
This can include a range of services, from help with bathing and dressing to more intensive medical care. The exact coverage depends on the policy, so it's important to read the terms carefully and understand what is included.
One of the main benefits of long-term care insurance is that it can help protect personal savings and assets. Without this insurance, the high costs of assisted living might quickly deplete savings.
By paying for a policy, individuals can ensure that they have the financial resources to cover their care needs without draining their retirement funds.
It is generally best to purchase long-term care insurance while you are still healthy. The cost of premiums increases with age, and health issues can make it more difficult to qualify for a policy.
Leveraging Home Equity
Home equity can be a valuable resource when financing assisted living care. Home equity is the value of your home minus any outstanding mortgage balance. Many people have built up significant equity in their homes over the years, and this can be used to help pay for assisted living.
One way to access home equity is through a reverse mortgage. This type of loan allows homeowners aged 62 and older to borrow against the value of their home. The loan does not have to be repaid until the homeowner sells the house, moves out permanently, or passes away.
This can provide a steady stream of income to cover the costs of assisted living.
HELOC
Another option is a home equity loan or a home equity line of credit (HELOC). A home equity loan provides a lump sum of money that can be used for any purpose, including paying for assisted living.
A HELOC works more like a credit card, allowing you to borrow money as needed up to a certain limit. Both options use your home as collateral, so it's important to make sure you can make the required payments to avoid risking your home.
Using home equity can have advantages and disadvantages. It allows you to tap into a valuable asset to cover care costs, which can be especially helpful if other savings or income are limited. But it also means taking on debt and potentially reducing the value of your estate.
Financial Assistance and Care
Understanding and utilizing various financing options for assisted living care can make senior living more affordable.
Cardinal Place is a vibrant Assisted Living community in Cambridge, Ohio. Our community offers compassionate care in a home-like setting. We develop individual care plans to meet the needs of each resident, and our full-time nurse is available 24 hours per day to provide clinical oversight and coordination of care.
Get in touch today to find out how we can help with your loved one!