Financial Assistance for Assisted Living
When looking for financial assistance for long-term care, many people are surprised to learn that Medicare does not cover assisted living. Still, in addition to private pay, the following options are available and may help you pay for assisted living.
Medicaid: In most states, Medicaid provides some financial assistance for assisted living for seniors who qualify. In many cases, coverage is through a 1915(c) waiver program, commonly known as Home & Community Based Services (HCBS) waivers. Waiver programs provide expanded coverage from standard Medicaid, and HCBS waivers are specifically intended to give seniors more choice when it comes to long-term care rather than defaulting to a nursing home. The available HCBS waivers and what they cover vary between different states, so be sure to look into your state’s Medicaid program for more information on coverage of assisted living services.
Long-Term Care Insurance: Long-term care insurance policies specifically cover some of the costs of long-term care such as assisted living. These policies may not cover all forms of long-term care, so be sure to look into the specifics. It can be challenging to be approved for a long-term care insurance policy after reaching a certain age, so this option is typically only available to those who already have a policy before the need for assisted living arises.
VA Aid and Attendance Benefit: The Aid and Attendance (A&A) benefit for veterans is a monthly payment that some veterans receive in addition to their standard VA pension. A&A is intended to help disabled and/or elderly veterans access the care that they need, such as assisted living. Veterans who sustained an injury in combat and meet income requirements and their spouses are eligible for A&A.
Reverse Mortgages: If a senior is moving out of a home that they own and into an ALF, a reverse mortgage can be a good option to help pay for assisted living expenses. Reverse mortgages are loans that one takes out against the value of their home without having to immediately sell the home. When the last resident of the home moves out and the home is sold, the loan recipient will be required to pay it back with interest.
Life Insurance: One typically purchases a life insurance policy to benefit their loved ones after the policyholder passes. However, in some cases, it makes sense to “cash-out” the policy early in order to have liquid assets to use to pay for long-term care. Some insurance companies will essentially buy back the policy for a portion of its cash value, while others seek a third party to handle a “life settlement.” In any case, it’s important to consider the pros and cons of using one’s life insurance policy to pay for long-term care.