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You already understand the benefits of assisted living. You think your senior loved one would enjoy making new friends and discovering new hobbies. You have already decided about transitioning into it. However, you cannot share the idea with them, because you think you cannot afford it.
Does this sound familiar? Most Americans put off the idea of moving into an assisted living community because they are not sure if they can afford it. We understand that looking at the pricing structures and financing options could be confusing, intimidating, or even stressful. But if you break it down slowly, you will see that although assisted living facilities may seem expensive, most are reasonable for the benefits and security they could provide.
First, let us take a look at assisted living costs.
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The Cost of Assisted Living
How much you will need to pay for staying in an assisted living community depends on its location, how long you are planning to stay, and the medical and non-medical services you acquire while living in the community. According to Genworth Financial’s 2021 Cost of Care Survey, the median annual cost for an assisted living community is $54,000. Long-term care by a home health aide tops $61,776 annually.
Although these expenses could be a tall order to fill, families often discover these are more affordable or could cost just the same as living alone in their own homes, considering all the bills and expenses associated with it. They just have to know and research ways to finance assisted living for their senior loved ones.
6 Tips You Need to Know to Finance Assisted Living
1. Get a long-term care insurance
Long-term care insurance ostensibly aims to cover your care needs in retirement. These policies are intended to cover your long-term health care needs. It may come into play for at-home care, an assisted living community or other long-term care facilities. So if your loved one purchased long-term care insurance, check the policy to see if it covers assisted living.
2. Ensure a life insurance with long-term care benefits
Life insurance could also help pay for long-term care. If your or your loved one’s policy has a cash value, policy owners can access through withdrawals to pay for long-term care. You could also sell the policy for care in what is called a “life settlement option”, which can produce up to three times the amount of money as accessing cash through withdrawals. If the owner is terminally ill, it can also be sold through a viatical settlement, in which proceeds from the sale of the policy are usually income tax-free.
3. Maximize Veteran’s benefits
Eligible United States military veterans can use their benefits to pay for long-term care. They could be eligible through standard medical benefits for a health evaluation, adult health care, respite care, and skilled home health care. Veterans could also utilize disability pay and their veterans pension to fund long-term care.
4. Utilize Medicaid and Medicare
Medicaid is a federal and state-run program that helps people with low income access medical care. Depending on the state where you are in, Medicaid can determine your eligibility for long-term care coverage. It could cover health care, personal care services and living in senior communities.
Meanwhile, Medicare can help finance medical care for people aged 65 years and above. While Medicare does not cover long-term care costs, this can pay for some of the costs for a shorter stay in a skilled nursing facility and hospice care if certain conditions are met.
5. Hack your real estate assets
There are three major ways you can use your real estate assets to finance assisted living costs. First is to tap into your home equity or the real property value. Home equity loans allow the borrower to take a loan against their home equity, for whatever use they might need such as to pay for long-term care services. Another way homeowners could use their property is by getting a reverse mortgage where you can sell your home back to the bank a piece at a time while you continue to live there.
Last is by selling your home and downsize.There are financial firms that offer bridge loans to help cover the assisted living costs while families wait for the sale of a home or other benefits to kick in.
6. Secure Your Loved One’s Future
Caring for senior loved ones entails financial concerns. There are assisted living communities that offer great but affordable services for seniors, and that could guide you with your financing options.
Blue Skies Homes offer professional assessments to have an informed decision on what best suits you or your senior loved one’s conditions. We could also assist you in tapping financial assistance that might be available for you. Contact us today!
