Helpful Ways to Pay for Assisted Living Costs

 Assisted living rent can vary from $2,000 to $5,000 monthly. Depending on what type of care your loved one needs, assisted living can be the most affordable solution when compared to a nursing home ($5,000 to $10,000 or more per month) or long-term in-home care. If closely monitored medical supervision is not necessary for your aging senior, assisted living might be the best financial choice.

One payment strategy that has become popular is to use Medicaid.  If your loved one does not have many financial assets and their income levels are low, this could be the right solution for them. However, the process can be complicated and time-consuming.

If you are trying to help a senior with a creative financial strategy by gifting money and other assets to family members, known as "Medicaid spend-down", the government has a five-year look-back rule regarding financial transactions. There are strict guidelines about Medicaid spend-down. If a senior is caught incorrectly spending down resources to qualify for Medicaid, the penalties are steep, including disqualification from receiving Medicaid for a lengthy period. Also, many states do not cover assisted living under Medicaid, but require the submission of an additional waiver.   Be aware that Medicaid assisted living payments are only accepted by some communities and Medicaid beds are usually limited. There can be long waiting lists to enter into a Medicaid financed assisted living facility.

If your senior has a disability, he or she may qualify for Supplemental Security Income (SSI), which is a federally administered program. SSI is the government safety net for those destitute and wholly or partially disabled by illness or injury. SSI is a monthly payment which a senior can use to pay for assisted living. To qualify for SSI, contact the appropriate local Social Security office and provide financial documentation and a doctor certification to attest to your senior's inability to work because of a medical disability.

If your loved one or their spouse is a Veteran, residential care could be paid for in a variety of situations with Veterans benefits. There is a set of benefits available to those with disabilities or service-related injuries, and there is also another set of benefits called Aid and Attendance, made available to any Veteran or surviving spouse who is both disabled and whose income is below a certain threshold. The Veterans Administration website outlines the complicated process to access benefits. It is extremely beneficial to work with an elder law attorney who knows the details of the programs and can assist with the application. 

A life insurance policy can pay for your loved one’s assisted living. Often, seniors have a long-standing policy that was implemented to help family members upon their death, but a life insurance policy can provide financial support now. A process known as "accelerated" or "living" benefits is a "cash out" policy that can have your senior redeem 50 to 75 percent of the face value of the policy. Each amount is based on specific policy conditions as well as individual corporate rules. Some policies can only be cashed out if the policyholder is terminally ill while other companies are more flexible in cash outs. If your senior's particular company does not allow the policy to be cashed, it can still be sold to a third-party company who usually affords the same 50 to 75 percent face value cash out. That company continues to pay the original premiums until their death, at which time the company redeems the full value of the policy. Finally, if your loved one's policy is of lesser value, it may qualify for a life settlement option known as a "life assurance" benefit or conversion program, which allows the senior to convert between 15 and 50 percent of the policy value directly into long-term care payments.

Does your loved one have a long-term care insurance policy? It can pay for assisted living care. Policies vary, but once the determination and action is taken to collect on it, those monies can be paid directly to an assisted living facility or to the beneficiary who in turn pays the facility. It is wise to consult with an elder law attorney to help understand individual company requirements to optimize the process of collection.

An annuity can be used to pay for some or all of the senior's assisted living. If your loved one invests a lump sum into an annuity, they will receive regular payments over a promised time period, usually the rest of their life. The annuity helps to stretch your senior's budget and guarantee at least some money is coming in, even in the event they live longer than expected. Most annuities allow the beneficiary to continue to receive money regularly even if the purchase premium runs out. If your senior were to live a very long time, they would get more back than they put in and an added bonus is that annuities are oftentimes not fully counted as assets by Medicaid when applying for government assistance. The income is counted but not the value of the asset. It is imperative to seek the advice of an elder law attorney before opting into an annuity as they are complex financial products and a wrong decision could be disastrous. 

If your loved one is healthy enough to successfully live in an assisted living facility, the monthly cost is likely a top factor when considering their options. These are some, but not all of the viable and creative ways to pay these costs. To fully explore the options available and what is best for your senior seek the advice of an experienced elder law attorney and make the best decision for your loved one. Contact our office today at (402) 614-6400 and schedule an appointment to discuss how we can help you with your planning and which strategy is best to help your senior pay for assisted living.