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What You Need To Know About Paying For Senior Living

Your Questions Answered

If you’re looking into the best senior living option for you or your family, the transition can seem intimidating – in particular, when trying to determine the best way to pay for it. We can help with some of the most common questions about financing the retirement years. If you’re looking for more resources when making a financial plan for your loved one or family member’s senior care, you can always contact us.

Figure Out Your Options

How much does senior living really cost?

There are quite a few variables that can drive the cost of senior living – for instance location, type of care, and level of services and amenities. According to a survey by the National Center for Assisted Living, the national median costs of care for assisted living services were $4,500 monthly and $54,000 annually in 2021.

Is senior living covered by Medicare?

It often comes as a surprise to seniors and their families to learn that Medicare does not cover assisted living costs – other than 100 days of skilled services or rehabilitative care for a qualified stay. The services covered by Medicare Part A include hospital stays, short stays in a nursing home for certain types of illnesses and hospice care in the last six months of life – all after a standard yearly deductible.

What financial assistance is available?

We are happy to help you determine whether financial assistance is available for you or a loved one. Many people aren’t aware that U.S. wartime veterans may qualify for the Aid & Attendance benefit for veterans and their surviving spouses. This monthly benefit is in addition to a veteran’s regular pension and can help cover the costs of assisted living or nursing care. It is a “pension benefit” and not dependent upon service-related injuries for compensation. Some restrictions apply; however, most veterans in need of assistance qualify.

For those individuals who fall below a certain income level, Medicaid may help cover a portion of senior community or nursing home costs. However, depending on your state, there are different regulations for qualifying, so be sure to look into Medicaid assistance specific to Texas.

Is senior living covered by long-term care (LTC) insurance?

It depends on the type of policy, but long-term care insurance benefits can often be applied to assisted living and/or nursing costs. Those with long-term care insurance need to look into how to collect on their policies. Some policies even cover needs ranging from adult daycare to assisted living to skilled nursing, with a few policies even paying a family caregiver for in-home care. You also might realize tax benefits; however, premiums can be costly and increase in cost with age and poor health, so experts recommend individuals begin planning between the ages of 52-64.

Are there other ways to pay?

Most Americans’ most valuable asset is their home – and there are various options for utilizing this option to pay. Many individuals and families first try to pay for nursing home costs with the profits made from the sale of a house, but may also decide to look into other options, like renting the house or using the house to qualify for specialized loans.

One such loan is a bridge loan – it’s meant for people who need access to funds right away but are waiting for a home to sell. As an interest-only loan, it uses the equity of a house to pay senior living expenses until the house is sold. The borrower then pays off the loan with money from the sale of the house when it becomes available.

You can also consider funding through certain life insurance policies. In order to cash out a policy before death occurs, individuals would look into “accelerated” or “living” benefits. The insurance company that originally issued the policy buys it back for 50 to 75 percent of its face value, although different rules apply depending on the company and type of policy. Another option, known as a “life assurance” benefit or life insurance conversion program, allows seniors to convert the benefit of a life insurance policy directly into long-term care payments.

More questions?

If you have additional questions about senior living and how to pay, reach out to us at Longleaf Bee Cave so we can provide you with the information you need to make the best choice for you or your loved one. We’re here to be a resource when it comes to your questions about how to pay for the retirement years.