For many people, one of the main concerns about choosing an assisted living facility is the cost. Individuals may worry about their finances as they look at the cost of medical expenses and the price of a loved one living at an assisted care facility. In order to ease these worries, it’s best to explore your options. Looking at the different ways you can pay for assisted living for your loved one without accumulating tremendous amounts of debt can help you move forward in the decision to find assistance.
When looking for assisted living, the first thing to look at is what options you and your loved one have on hand for paying out-of-pocket. A person interested in starting assisted living might have a savings account or a retirement fund. Your loved one might also have personal income in the form of stocks and bonds if they’ve invested. Another source of personal funds could be what money is made after selling your loved one’s home. Out-of-pocket options are the first to consider when paying for assisted living, especially in the early stages of assisted care.
Government Healthcare Benefits
There are many different types of government healthcare payment options and benefits for those in need of assisted living. A great resource is the Centers for Medicare and Medicaid Services website. This website will provide information about coverage options in your specific circumstance. However, Medicare is specifically for medical costs and doesn’t cover assisted living. Medicaid can cover costs of medical expenses and some types of long-term care depending on your financial circumstances and if you meet eligibility requirements.
Other government programs to look into are Social Security Administration programs such as social security disability insurance (SSDI) and supplemental security income (SSI). Your loved one can qualify for SSDI if you are under 65. In order to receive SSDI, they will need to be able to prove that they are unable to work because of their medical condition and that their medical condition will last at least a year or will likely result in death. SSI is for people who are 65 and older and have a disability. In order to be eligible, your loved one will need to be under certain income and resource limits.
Private Payment Options
Private finance options include long-term care insurance and some life insurance policies. Whether you can use these policies depends on your age, health situation, and what you plan to use them for. Consider these options when you shop for private insurance. Ask your current insurance provider what they cover for long-term care.
Long-Term Care Insurance
Many people don’t have long-term care insurance, but if your loved one is diagnosed with a long-term illness or could require assisted living, looking into long-term care insurance might be a great option. Long-term care insurance can cover many different types of long-term care, such as palliative and hospice care. Insurance companies offer many different types of coverage depending on your needs.
Some policies cover nursing homes only, while others can cover at-home care or care at a facility. The policy cost depends on what is offered and how old your loved one is when you purchase this insurance policy. It’s recommended that a person buys long-term care when they are younger because they are at lower risk of needing care. A person who isn’t in good health or is older will need to pay higher premiums. It’s also important to note that your loved one might not qualify for long-term care insurance if they are already receiving end-of-life services.
Life Insurance Policies
Life insurance could also be another avenue of payment. Depending on the policy, some life insurance companies offer to pay for long-term care. Some life insurance companies provide “accelerated death benefits” that offer cash advances that can be used while your loved one is still alive. The advance is subtracted from the amount that beneficiaries receive after a loved one passes on. These accelerated benefits can cover the costs of nursing homes, long-term care, being terminally ill, or having a life-threatening illness.
Your loved one’s life insurance policy might also have an option called a “life settlement.” This policy allows you to sell your loved one’s life insurance policy at its current value. However, this option usually is only available to people who are 70 or older. This money is also taxable and can be used for any reason.
Look Into These Options Sooner Rather Than Later
It’s never too early to look into payment options for assisted living and other long-term care services for your elderly loved ones. The costs of assisted living can be expensive, which is why it’s essential to have a plan in place. Research the different requirements for each option and determine if you qualify. There are plenty of ways to afford assisted living regardless of your income and circumstance.