What Should You Do When You Can’t Afford Assisted Living?

You might consider assisted living for your senior loved ones when they need more help with their daily activities. But it is no secret that assisted living can cost a lot. So in this article, we share with you some helpful information on what should you do when you can't afford assisted living.

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Assistive Technology Professional
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Can't Afford Assisted Living
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When your aging loved one needs help with some of their daily activities, assisted living offers support while encouraging your parent to maintain independence and enjoy retirement.

The median cost of assisted living in the U.S. is around $4,300 a month. Many families are disappointed to learn that Medicare doesn’t cover assisted living.

What if you don’t have the money in the bank to provide assisted living for your older adults? Fortunately, there are many other ways of paying for assisted living for your loved one.

This article provides information on what should you do when you can’t afford assisted living.

How Much Does Assisted Living Cost?

Many factors affect how much you need to pay for assisted living. Your location, the size of your apartment, the community you choose, and the number of services you need are some factors affecting the cost of assisted living.

The national median for assisted living in the United States is $4,300 a month, as per the Genworth Cost of Care Survey of 2018. It adds up to $51,600 per year. The same survey says that a private room in a nursing home would cost around $8,365 a month.

Assisted living costs are higher in the states where the general cost of living is high. 

can't afford assisted living payment options
There are various payment options available for assisted living.

What Are All Your Payment Options For Assisted Living?

The choice to move your older adult into assisted living or memory care comes with many questions.

Which senior living facility is the best fit for your older adult? How to pay for assisted living? Will my parent be well cared for? These are some of the most important questions you need to answer before deciding to move your loved one into assisted living or memory care.

As per the Genworth Financial Cost of Care Survey of 2019, the cost of assisted living has risen on average from 1.71% to 3.64% per year. It is an annual increase of about $1,321.

With the cost of assisted living rising each year, understanding your payment options is important for both you and your loved one. Here are some of the payment options available to you for assisted living:

Paying With Personal Funds

Paying for an assisted living using your personal funds or savings is the best way to do it. You or your loved one may have a pension or other retirement funds for this purpose.

On the other hand, you may have additional income from stocks or other investments. You may also have proceedings from selling a home. All these are great options to pay for assisted living.

You can also cash personal investment portfolios such as 401(k) plans or IRAs to pay for community care. But this option may not be accessible to a large number of applicants out there.

Reverse Mortgages

A reverse mortgage lets a homeowner convert part of the equity in the home for cash. It helps seniors with limited income to pay for their assisted living expenses.

The borrower’s credit isn’t relevant here since there are no payments, and the home will serve as collateral. When the borrower is no more, his or her heir can repay the mortgage without selling the home.

But you should expect to pay a hefty origination fee and costs if you choose this option. The fees will become part of the initial loan and accrue interest.

Long-Term Care Insurance

A long-term care insurance policy helps you save money by preserving your savings and assets. In fact, you don’t have to pay for assisted living from personal funds when you opt for this type of policy.

Depending on the insurance policy, you can choose where your loved one will receive care, such as in a nursing home, assisted living center, or their own home.

Since all insurance policies are not created equal, you should talk with your insurance provider to find out about the benefits of your long-term care insurance policy. 

Medicare & Medicaid

Many people wonder whether Medicare and Medicaid pay for assisted living.

Even though Medicare doesn’t pay for residential services or personal care in an assisted living community, it can be used by people who have exhausted their own personal income resources or by those with low income to qualify for government aid.

One important thing to remember is that the chosen assisted living facility should participate in the program for this option to become viable. But not all assisted living providers participate in state-funded programs because of low reimbursement rates and high regulations by authorities. 

Equity Lines Of Credit

Equity lines of credit are a form of revolving credit using your home as collateral. This type of payment option is ideal for paying for assisted living for your older adult. It offers lower costs and is ideal for couples of mixed ages who are not eligible for reverse mortgages.

The homeowner will use a loan against his/her home to pay for assisted living. The homeowner should be able to make monthly payments on the loan to qualify for this option.

You should weigh the options carefully before using this payment method to pay for assisted living for your loved one. The costs of equity lines may differ. You should shop for the credit terms that best meet your borrowing needs.

Veteran Benefits

If you or your spouse is a veteran, you are eligible to pay for assisted living using this payment option.

To become eligible for this option, you should be active for at least 90 days, where just 1 of those days was during a war period. The program is known as the Aid and Attendance Benefit and is designed to help Veterans and surviving spouses find a suitable assisted living facility.

RELATED: Do Assisted Living Facilities Accept Credit Cards?

can't afford assisted living still need it
There are other sources where you can draw money to pay for assisted living.

What Should You Do When You Can’t Afford Assisted Living And Still Need It?

You will be surprised to know that you can draw money from other sources to pay for assisted living even when you don’t have money to pay for it.

When you don’t have money to pay for assisted living and still need it or your money runs out while you are in a facility, you can file a hardship waiver with your state’s Department of Health & Human Services as per federal law.

On the other hand, you can reach out to government agencies, including your Area Agency on Aging or your local long-term care ombudsman.

In fact, the Federal Older Americans Act requires every state to have these agencies. The ombudsman can negotiate with your facility or secure financial aid to pay for your care.

What Are Some Options For Continuing Your Care When You Can’t Afford It?

  • Check out local community programs for seniors
  • Check out state-funded assisted living programs
  • Opt for a senior care bridge loan
  • Change your location since assisted living care in the countryside or suburbs is much cheaper than those in the city.

Are There Ways To Reduce The Cost Of Your Assisted Living Bill?

The size of your apartment plays a crucial role in expanding your assisted living bill. For example, renting a studio instead of a one-bedroom apartment can reduce your monthly payments by at least 15% to 20%.

Shared living is another option to reduce your bill. On the other hand, you can opt for a smaller community instead of a large assisted living facility. Finding an assisted living facility just an hour away from a large city can reduce your costs by as much as 25%.

RELATED: Assisted Living: Ultimate Guide to the Whole (Scary) Process

Should You Consider A Nursing Home?

Nursing homes are more expensive due to their specialized and higher care levels. A nursing home is ideal for older adults who need significant medical care in addition to companionship, assistance with ADLs, and on-site amenities.

If you wonder what you should do when you can’t afford assisted living, you have come to the right place. The aforementioned article provides information on what should you do when you can’t afford assisted living.

Keep Reading About Paying for Assisted Living

Assisted Living Take Your House
Can Assisted Living Take Your House If You Need Help?
Assisted Living Facilities Accept Credit Cards
Do Assisted Living Facilities Accept Credit Cards?
Do Assisted Living Facilities Typically Accept Medicaid
Do Assisted Living Facilities Typically Accept Medicaid?
Certified Senior Advisor (CSA)®
Assistive Technology Professional

Scott Grant has spent more than 20 years serving seniors and the elderly in the home medical equipment industry. He has worked as a manufacturer's rep for the top medical equipment companies and a custom wheelchair specialist at a durable medical equipment (DME) provider in WV. He is father to 4 beautiful daughters and has three terrific grandkids. When not promoting better living for older adults, he enjoys outdoor activities including hiking and kayaking and early morning runs.

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