More seniors than not end up needing long-term care by the age of 65 and up whether that care comes from assisted living or nursing homes. Nursing homes are good for individuals that need active monitoring and have medical issues whereas assisted living is designed to provide custodial care while allowing individuals to retain a semblance of privacy and freedom. They offer services such as dressing, bathing, and feeding.
Many people transition loved ones to assisted living or want to because of special medical needs such as Alzheimer’s or Dementia care. Assisted living facilities are great for seniors with no extended family or those whose family are unable to care for them the way that they need. While federal and state programs are quick to not offer coverage for assisted living and related care, there are plenty of ways to pay for your loved one’s needed care.
Unfortunately, many families do not come up with a plan for the possibility of long term care and find themselves panicking about how they are going to afford it once a parent or loved one has to have it. It is actually quite shocking how expensive assisted living care can be, especially when you have made no move to educate yourself beforehand. It is easy to assume that Medicare or another form of government assistance will cover assisted living and long term care but the truth of the matter is that they do not. Being unprepared for this large of an out of pocket expense can be financially devastating so be sure to do your research for assisted living in your area and the costs that are included.
Medicare Coverage and Assisted Living
Assisted living facilities are a kind of housing options for loved ones who require around the clock care. They fall in between Skilled Nursing Facilities (SNF) and independent living. Assisted living facilities provide services such as helping administer medication, personal care like bathing and eating, and help with daily living in general. This type of home offers residents more freedom as well as privacy than a traditional nursing home as well as offering things like transportation and full time supervision.
The Medicare handbook says that individuals enrolled in Medicare have to pay for any required long-term care services such as nursing homes, home health assistance, and assisted living by themselves whether from income or saving. If you would like a copy of the Medicare handbook it can be found here. It is important to realize the Medicare is health insurance, not a long-term care insurance.
Deciding to transition a loved one into an assisted living facility is a big decision and the cost of the home influences that decision. Being sure you can afford to pay for the care of your loved one is major concern for a lot of families and more often than not, families end up paying that cost out of pocket. There are many factors that determine what the cost of a living facility is going to be including the location, services that are offered, and the amenities that they have available. Whether or not the room is private will greatly affect the cost as well as what part of the city the facility is located in. Some facilities seem more like resorts and offer things such as concierge service, elegant hotel atmospheres, and calendars full of planned activities while some offer the bare minimum services of basic meals, housekeeping, and hygiene assistance. Assisted living is also going to be substantially more expensive if you require care for complex medical issues including Parkinson’s disease and Alzheimer’s.
Finding an assisted living facility that fits your needs as well as your budget can be hard. There is a lot of patience and research involved in order to make sure you get the best choice possible. Oftentimes there has to be compromise on things like location and amenities in order to be sure you can afford the facility and care.
There are programs that can help with the expenses that come with assisted living and Medicare is one of those programs. It is best to find out if Medicare will help as well as how much before making a final decision. Assisted living facilities in the United States often average around two to five thousand dollars a month. This is a lot of money for average families in the United States. When beginning to search for a good facility it is best to keep in mind that even if there is a program covering or helping with cost, the questions asked should be the same as if the resident was paying out of pocket. Some questions to ask are about services, patient to staff ratio, and anything else that you may need or want to know beforehand. The level of financial support available varies greatly depending on your state.
Usually assisted living facilities allow their residents to choose whether they want to pay a fee-for-service or all-inclusive prices. All-inclusive means that everything is covered under one monthly fee such as housekeeping, transportation, rent, meals, and anything else the resident might want to include. The fee-for-service pricing can usually save residents money, especially if they only need a few services or have someone else to help with services.
Medicare
A lot of people wonder whether or not Medicare will help pay for the cost of a loved one being in an assisted living facility and the answer is actually no. Medicare is for those who are 65 years old or younger if they receive disability benefits. In most cases, Medicare will not cover the expenses that come with long-term care and assisted living facilities. There are certain facilities however, that your loved one can stay in that qualify for medical cost help from Medicare. For the most part Medicare will not cover any “custodial care” costs but there are always exceptions and circumstances that allow for coverage.
Some examples of non-medical care services that are not covered include:
- Long-term care
- Nursing homes
- Assisted living facilities
- Non-medical residential care
Medicare can be used to cover care that follows hospital stays, prescription home health care, physical, speech and occupational therapy, as well as short-term care. It will also help pay for medical equipment with the intention that it is for home use. Medicare will also cover hospice care in some cases such as someone with a terminal illness diagnosis or it their life expectancy is around six months or even less.
Medicare Part A and B do not cover any residency costs associated with assisted living which can sometimes exceed fifty thousand dollars a year. Both Part A and Part B do not cover ADL assistance which includes but is not limited to; bathing, eating, dressing, toiletry assistance, etc. Many people are surprised to learn that Medicare actually does not cover care for conditions such as Alzheimer’s and Dementia. This is because they are considered personal care in most cases. Medicare will normally covers costs that are accrued from staying in a living facility but they do not cover the facility costs themselves.
Some Medicare Advantage plans may allow for coverage of home care that differs from what is offered by normal Medicare but these plans are also more expensive. Medigap, or Medicare Supplement, normally does not cover the cost of long-term care either.
Medicare will cover costs for people with dementia if they are deemed medically necessary. Some of these include:
- Inpatient hospital stays
- Skilled nursing care (up to 100 days)
- Hospice
- Lab and diagnostic testing
- Doctor appointments
- Physical therapy
- Medical equipment
- Preventative care
- Some Medicare plans will cover extra services like:
- Dialysis
- Emergency care
- Transplants
- Diabetes care
- Macular degeneration treatment
- Dental
- Vision check ups
- Prescription medication
Medicaid
Medicaid is a federal and state program for families and individuals with limited income that provides them with health coverage. Medicaid benefits coordinate with Medicare benefits. Medicaid can typically be used to cover at least some of the costs for assisted living. If your loved one has limited income then they are likely to be eligible for Medicaid assistance. The purpose of Medicaid is to help senior citizens and disabled persons have access to healthcare when they cannot afford it by themselves. Low income families often qualify for this type of government assistance and although there is nothing that says Medicaid covers assisted living, some states will let Medicaid cover part of the cost but usually not room and board.
- For those who qualify for Medicaid, they will cover some assisted living costs such as:
- Medication management
- Medical exams
- Assessments
- Nursing Care
- Case management
Financial need is the main basis for Medicaid and when trying to be approved for assistance they will do a “look back” of up to five years in the past. What this means is that they will look at any transactions from that time and if you attempt hiding information when trying to qualify there are severe penalties and they can even disqualify you from receiving any assistance through Medicaid for a period time. Normally, you are allowed to have assets around two thousand dollars and still qualify. Certain purchases such as pre-paying for your funeral cannot be used against you when applying.
Sometimes Medicaid will cover the cost of a memory care facility if that facility has a Medicaid contract in place. If they do not then Medicaid will cover the same assisted living services as Medicare.
Other Options
It is important to understand the cost of senior care in order to be prepared for what you will need to pay. If you are going to be helping a loved one find an assisted living facility then assessing your available resources as early as possible is a good move.
One uncommon option to cover the expenses of long-term care is finding an assisted living facility that offers private funding of their own to residents. Long-term care insurance can also be used to cover can occasionally be used to cover portions of the cost but oftentimes residents end up paying from their own money for assisted living. Selling a house or vehicles or even using money that was saved are all options for funding the care of a loved one. If your state Medicaid does not cover room or board in an assisted living home then there are still more options. If the resident is a Veteran then there are welfare programs which are state-funded that could possibly help. Long-term care may be covered in general if resident was a veteran or if the resident is the surviving spouse of one.
The American Association for Long-Term Care Insurance states that over 50% of their insurance applicants that are around the age of 50 years old end up qualifying for discounts. If you wait until your 60’s to apply for Long-Term Care Insurance then that percentage drops down to a 42% chance of qualifying and if you wait until your 70’s then you are left with a measly 24% chance of receiving benefits. It is best to apply for Long-Term Care Insurance early, before your health begins to deteriorate.
There are many ways to come up with more money to pay for assisted living, what matters is knowing where to look. Many people choose to use their personal finances to pay for assisted living facilities. Some sell assets such as the loved one’s home is order to help cover the cost of their new home. Savings accounts are also used to pay for assisted living occasionally.
In most cases, you must have your coverage choice ready to go before you or your loved one require medical care. It is extremely difficult to qualify and receive help after the fact so the key is to get applications in early and learn more about your options to be prepared for the future. Most insurance companies will turn down applicants who have an immediate need for long-term care so being prepared is the best thing you can do for your future self.
To read more about how to financially plan for assisted living costs, visit our blog or our Help and Advice page.
