How To Afford Assisted Living When You Have Limited Resources

Certified Senior Advisor (CSA)®
Assistive Technology Professional
Updated:

To find a long-term care facility that is considered affordable is a big challenge. However, you don't have to exhaust all of your financial avenues just to make it possible. So keep on reading as we help you figure out on how to afford assisted living when you have limited resources.

How To Afford Assisted Living
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While finding the right assisted living facility can be somewhat challenging, finding a long-term care facility that you can easily afford is even more challenging.

However, with the right knowledge, preparation, and planning, you can find something that not only matches your elderly loved one’s preferences but also matches the available budget. 

Read on for a detailed guide on how to afford assisted living without breaking the bank. 

Who Usually Pays For Assisted Living Costs?

In most cases, families normally use their private funds to cover assisted living costs. As such, families have to use a combination of retirement accounts, insurance, personal savings, and pension payments to pay for assisted living.

Family members will normally come together and contribute towards the costs of senior living, even though most seniors will have saved for retirement over their working lives. 

Before researching senior living communities, take the time to determine if you can afford them. You should also ensure that the chosen facility can provide the level of care your elderly loved one requires and matches their personal preferences. 

Does Medicare Or Medicaid Pay the Costs of Assisted Living Communities?

No. Medicare is designed to cover medical costs associated with short-term non-custodial care. As such, it cannot be used to pay for assisted living.

However, if your elderly loved one receives any medical care in an assisted living facility, Medicare can cover such costs.

To put this into perspective, supposing your loved one receives assistance in administering insulin injections, bathing, and dressing, Medicare can cover the cost of injections. 

how to afford assisted living health insurance
Unfortunately, most health insurance policies do not cover assisted living costs, but some specific insurance policies do.

Does Health Insurance cover the Costs Of Assisted Living?

Again, the answer is no. Most health insurance policies do not cover the cost of assisted living. However, some specific insurance policies are designed to cover this type of care cost. 

While there is nothing like “assisted living insurance,” you can find something that is very close to it referred to as long-term care insurance. The cost of assisted living, in-home assistance, and nursing homes can be covered using long-term care insurance.

This type of insurance is specifically designed to help you cover these costs without using up all your financial resources/avenues. 

However, it is important to note that long-term care insurance does not cover all aspects of assisted living.

To find out exactly what is covered under your specific policy, it is recommended that you contact your agent and ask for a detailed breakdown of the policy.

Ways To Pay For Assisted Living That You May Not Have Considered

Apart from private funding, insurance, and pension/retirement payments, are there other ways to pay for assisted living? Read on to find out. 

Home Equity

Your elderly loved one may be able to cover the costs of senior assisted living with home equity if they own a home or any other property. There are different ways of using home equity to pay for assisted living. 

If you need to go into assisted living immediately but are yet to come up with the cash needed to cover the associated costs because you haven’t had time to liquidate some assets, a home bridge loan might just work. This is a short-term loan facility that gives you quick access to cash. 

Alternatively, elderly homeowners can tap into their home equity through a reverse mortgage. This facility gives them access to cash while allowing their spouse or adult children to continue living in the house in question. 

Lastly, you can consider selling or renting your house to pay for assisted living. However, this may be a last resort of sorts, as your children or spouse may want to continue living in the home.

Veteran Benefits

If your elderly loved one served in the armed forces, regardless of how long, they might qualify for veteran benefits. Both the individual who served and their spouse stand to receive substantial monthly benefits if they apply for Veterans Aid and Attendance.

Provided that you meet the criteria for financial assistance and there is a need for assisted living, you can receive monthly benefits that can be used to cover assisted living costs. 

You may qualify for these benefits even if you have some money in the bank and/or own your home. You will need medical documentation and military discharge papers to apply for Veteran Benefits.

Existing Life Insurance

If you, or your loved one, have a life insurance policy that is no longer needed, you can use it to cover assisted living costs. 

For instance, you can explore the option of selling the life insurance plan to a third party and receiving cash in exchange while still retaining part of the death benefits.

Alternatively, you can surrender the policy to the insurance company in exchange for cash – however, this means that you won’t receive any death benefits as you will have given up the policy. 

If your policy has a Living Benefits Rider attached to it, you can apply for some benefits now, while leaving the rest for your beneficiaries.

Depending on the policy guidelines, you may even have the option of converting the life policy into a long-term care plan.   

how to afford assisted living reduce costs
Look out for deals and discounts offered by assisted living facilities.

Ways To Reduce Assisted Living Costs

Choose A Cheaper Apartment

Apartments in senior living facilities come in all sizes. If you want to minimize costs, consider purchasing a smaller apartment with basic amenities.

However, be sure to choose something that perfectly matches the needs of your loved one. Alternatively, you can look for a roommate for your loved one – with whom they can share some of the costs. 

Inquire About Discounts

Assisted living facilities offer various discounts and deals when looking to fill vacant apartments or boost intake numbers.

For example, you can ask whether you get a free month if you sign up for an extended period in the beginning or whether you can get a waiver for some fees, among others. 

Only Pay For What You Need

When transitioning to an assisted living community, some facilities give you the freedom to specify what you want; and with it, only pay for what you receive. You can save a lot by choosing to pay for activities of daily living services depending on need. 

Ask About Programs For Low-Income Seniors

If your elderly loved one needs financial assistance when it comes to covering their assisted living costs, they may qualify for various senior benefit programs. Find out whether the benefits from such programs can be used to cover assisted living costs as well.   

Tax Deductions And Credits

Senior and caregiver tax credits can go a long way toward helping seniors and their loved ones recoup assisted living costs.

Seniors with at least two ADLs or chronic illnesses can qualify for senior living tax deductions not exceeding $7,500. Furthermore, caregiver tax credits may also be available to relatives who pay for at least 50 percent of their loved one’s care.  

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

Alternatives To Assisted Living If You Just Can’t Afford It

In-Home Care

In-home care is a great option for individuals who want to stay at home for as long as possible. This arrangement involves hiring a caregiver who looks after the seniors based on their needs. 

Independent Senior Living

This involves getting seniors to live in communities – a great option for those who love community and socialization. However, you arrange any support services just like you would with in-home care. 

Home Sharing

Considered to be quite similar to independent living, home sharing involves seniors living in a home with other people, without any aides to provide assistance, no support services, and no amenities.  

Cohousing

Also similar to independent living, this alternative features several residences on the same property, with shared common spaces. 

Continuing Care Retirement Communities (CCRC)

These communities allow seniors to continue living in one place for the remainder of their lives. Here, you get skilled nursing, memory care, and assisted and independent living all in one place. 

Program Of All-Inclusive Care For The Elderly (PACE)

Designed to provide support services to help people continue living in their homes, especially if they cannot afford assisted living, PACE is administered by the Center for Medicare and Medicaid. 

Board And Care Homes

These may also be referred to as senior group homes, adult foster homes, V.A foster home programs, group homes, or residential care homes.

Normally found in residential neighborhoods, these homes normally accommodate anywhere between 2 and 10 residents. Some of the services provided include recreational activities, meals, and assistance with medication management, hygiene, and grooming, among others.    

Conclusion

From the above, it is possible for you to see exactly how you can afford an assisted living community or your elderly loved one without having to exhaust all of your financial resources.

Click here to learn more about paying for assisted living in our Ultimate Guide to Assisted Living.

And in case you are still unable to afford assisted living, there are many affordable alternatives to assisted living to choose from.

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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