How to Afford Assisted Living

Q. We are considering assisted living for my father in the not so distant future. He doesn’t quite need a nursing home yet, but he certainly needs more help than we can provide in the home. Although assisted living is not as expensive as nursing home care, it’s still quite expensive. I understand that she can plan for nursing home care with your firm, but is there a way to plan for the costs of assisted living?

A. As people age, various circumstances have to be reassessed. A current living situation might not be meeting the needs of a senior who might be having difficulty caring properly for himself or herself. Assisted living is one option that families often pursue for their loved ones in need of some assistance, but not quite ready for nursing home care.

Families often consider various types of senior residences for their loved ones during the golden years of their lives. These facilities range from independent living homes offering minimal or no care to nursing homes that can provide the highest level of custodial care, support, and supervision. Somewhere in the middle are assisted living homes, which blend the independence of personal residences with other amenities, such as housekeeping, medication reminders, meal services, custodial care, and memory care in special locked-down units.

Assisted living can be a viable option when a person can no longer live alone, but such facilities come with a steep price. In the 2019 Cost of Care Survey conducted by Genworth Financial, the national median rate for assisted living was around $4,000 per month – and of course this is continuing to grow. Locally, $5,000 to $8,000 per month is common for assisted living depending on the level of care needed. Affording these homes and apartments can be challenging for those on fixed incomes, but there are strategies that can help.

The payment method that serves you best will depend on your own circumstances, but a few options exist, as follows:

  • Personal savings: Some people have the means to pay for assisted living with their own savings and retirement nest eggs. However, savings easily can become depleted by a $60,000+ annual bill for assisted living.
  • Life insurance: You could consider paying for assisted living with a life insurance policy. Some life insurance policies let you use the policy for “accelerated” or “living” long-term care benefits. if you have a life insurance policy that does not have a long-term care rider, there are viatical settlement companies that might buy your life insurance policy for a lump-sum settlement, usually 50% to 75% of the policy’s face value.
  • Hybrid long-term care insurance policies most often combine permanent life insurance with an accelerated death benefit rider that pays benefits for long-term care or chronic illness. These hybrid policies have been rapidly gaining in popularity because they address most of the shortcomings of traditional LTC insurance policies. The primary advantages of these hybrid policies are that they offer tax-free reimbursements for qualified long-term care expenses; tax-free death benefits to your heirs if your LTC benefits are not fully used; and a potential return of your premium if you change your mind down the road. Of course, someone already in need of assisted living is not going to qualify for one of these policies, but for still-healthy individuals, these policies can generally be issued up until age 80.

Besides being a Certified Elder Law Attorney, I am also an experienced retirement planning advisor and long-term care insurance advisor. Through my financial company, Lifecare Financial Services, I have been helping clients since 2006 purchase and use hybrid LTC insurance policies to assist in paying for long-term care, especially home care and assisted living, before the need for the nursing home level of care arises. Learn more here.

  • Location: The cost of assisted living facilities varies depending on location. It’s possible to get a lower monthly rate simply by choosing a facility in a different city.
  • Negotiation: Not all prices are set in stone. Speak with a manager at the facility and ask about price flexibility or move-in incentives. You also might be able to get a lower rate by negotiating certain a-la-carte costs over all-inclusive pricing. Perhaps you do not need laundry or shopping services, and family members can fill in the gaps to reduce your bill.
  • Veteran’s benefits: Many veterans are eligible for care benefits that can offset the cost of assisted living care. The Veteran’s Aid and Attendance (A & A) Pension Benefit helps pay for unreimbursed medical expenses (not covered by Medicare or a Medicare supplement) for veterans and their surviving spouses. A & A is a useful program for those who need assistance with the activities of daily living. For more details on the A & A benefit and the requirements to qualify, please click here.

Here at the Farr Law Firm, we work with veterans and their spouses to evaluate whether they qualify for the Veterans Aid and Attendance Benefit and/or Medicaid, and we deal with all the paperwork. As an Accredited Attorney with the U.S. Dept. of Veterans Affairs and as a Certified Elder Law Attorney, I understand both the Veterans Aid and Attendance Benefit and the Medicaid program and the interaction between both benefit programs.

  • Rooms: Opting for a smaller room or sharing a space can keep costs down as well. See if shared rooms are a possibility.
  • Small Group Homes: A small adult group home can sometimes be an attractive alternative to large assisted living communities. These are privately operated homes, typically with 3 to8 residents, and can be very difficult to find without the assistance of a third-party, such as A Place for Mom or a local equivalent such as Custom Senior Living Search.

When Assisted Living is No Longer an Option

If your dad is in assisted living and signs are showing that assisted living is not providing sufficient care, it may be time to consider nursing home care.

It is always wise to plan ahead for when the need for nursing home care eventually comes. Life Care Planning and Medicaid Asset Protection is the process of protecting assets from having to be spent down in connection with entry into assisted living or nursing home care, while also helping ensure that you and your loved ones get the best possible care and maintain the highest possible quality of life.

To begin long-term care planning — whether Medicaid Planning and/or Veterans Planning, and/or planning with hybrid insurance coverage, please call us now to make an appointment for an initial consultation:

Elder Law Fairfax: 703-691-1888
Elder Law Fredericksburg: 540-479-1435
Elder Law Rockville: 301-519-8041
Elder Law DC: 202-587-2797

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About Evan H Farr, CELA, CAP

Evan H. Farr is a 4-time Best-Selling author in the field of Elder Law and Estate Planning. In addition to being one of approximately 500 Certified Elder Law Attorneys in the Country, Evan is one of approximately 100 members of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys and is a Charter Member of the Academy of Special Needs Planners.