Untangling the Aspects of Understanding Assisted Living Costs

According to the Genworth Cost of Care Survey 2021, the national median cost for an assisted living facility in the United States is $4,500 monthly. And nursing homes are even higher.

This alarming figure underscores many individuals and their families' financial strain when planning long-term senior care.

But how do you assess the cost associated with such comprehensive care?

Several ways exist to pay for assisted living, including personal savings, long-term care insurance, and veterans' benefits.

Understanding these options can provide relief, as it puts you in control of your financial planning. Let's look at some aspects of understanding the costs of assisted living you should know.

Personal Savings

Paying for assisted living with personal savings is a direct and empowering approach. By setting aside money over time, you can understand your financial assets and cover the expenses.

Retirement Accounts

Retirement accounts, such as 401(k) plans, IRAs, and Roth IRAs, are a common source of personal savings.

There are rules on withdrawals and potential penalties. A financial advisor can help navigate complex retirement funds to help cover assisted living community costs.

Investments and Liquid Assets

You can also use investments and liquid assets, such as stocks, bonds, mutual funds, and savings accounts, to fund assisted living expenses.

The advantage of using investments and liquid assets is their flexibility and accessibility. Review and adjust your investment portfolio regularly to align with your financial goals and risk tolerance.

Liquid assets are precious. You can convert them to cash, providing immediate funds if an urgent need for assisted living arises. Managing these resources helps sustain long-term financial support for assisted living.

Long-term Care Insurance

Long-term care insurance can help cover the costs of assisted living. Individuals buy a policy to help pay for services that regular health insurance does not cover. This type of insurance can provide significant financial support, especially for those with limited savings.

Long-term care insurance provides a sense of security by reducing out-of-pocket expenses, which can be significant, especially over an extended period.

Some policies offer inflation protection, ensuring the benefits keep pace with rising care costs. This can provide reassurance about your future financial stability.

The downside is premiums can be expensive, especially for older adults or those with pre-existing health conditions. Policies also have exclusions and waiting periods, during which the insurance will not cover costs.

Before purchasing a policy, make sure you understand its terms and conditions. Not all policies are the same, and some may have restrictions on what they cover.

This knowledge can help you make an informed decision that aligns with your needs and financial situation.

Veteran's Benefits

Veterans who have served in the military may be eligible for benefits to assist with assisted living costs. Check with the Department of Veterans Affairs for eligibility requirements and programs.

Aid and Attendance Benefit

The Aid and Attendance (A&A) benefit is a program that can help veterans pay for assisted living.

This benefit is available to those who need help with daily activities, such as bathing, feeding, dressing, or are bedridden and unable to care for themselves. Surviving spouses of qualifying veterans may also be eligible.

Housebound Benefit

The Housebound benefit is another financial option for veterans confined to their homes because of a permanent disability. It supplements the basic pension to provide extra financial support for veterans who need help but are less medically dependent than those qualifying for A&A.

Some assisted living communities offer discounts and programs for veterans, as well.

Medicaid

Medicaid is a state and federal program that can help pay for assisted living. Eligibility depends on income and asset limits, which vary by state.

Often, Medicaid covers basic services like room and board, personal care, and nursing care.

Medicaid can assist eligible individuals with the cost of room and board, personal care services, medication administration, housekeeping services, laundry services, and nursing services.

Benefits of Medicaid

Medicaid can provide significant financial relief for those who qualify. It covers expenses that some other forms of insurance do not, is more flexible than Medicare, and includes coverage for personal care services.

Limitations of Medicaid

While Medicaid can provide significant financial relief, it also has its limitations. Not all assisted living facilities accept Medicaid, so check with the facility beforehand.

Qualifying for Medicaid

To qualify, applicants must meet specific income and asset thresholds. Medicaid will thoroughly review your assets and manage your personal finances.

Your assets may be subject to estate recovery after your passing, meaning Medicaid can file a claim against your assets upon death.

An elder law attorney or financial advisor specializing in long-term care planning can help navigate the complexities of applying for and managing Medicaid benefits. They can also ensure you maximize all benefits while preserving your assets for future use.

Supplemental Security Income (SSI)

Supplemental Security Income (SSI) can help cover assisted living costs for individuals with low income and limited assets. This program provides monthly cash help to cover basic needs, including assisted living expenses.

To be eligible for SSI, applicants must have limited income and resources and be either aged 65 or older, blind, or disabled. The amount of SSI benefits received depends on the individual's financial situation and the federal benefit rate, which state funds can supplement in some cases.

Medicaid can consider SSI income when determining eligibility for assisted living benefits. SSI ensures that individuals with limited resources can still access necessary elderly care options. This integration helps bridge financial gaps, making assisted living more affordable for those who qualify.

Understanding the Costs of Assisted Living

So plan ahead! Consider all available options and resources to feel more prepared for the future. A financial advisor, elder law attorney, or healthcare professional can help you create a personalized long-term care plan.

If you're considering a local assisted living community in Mount Pleasant, IA, Addington Place of Mount Pleasant stands out. Our community specializes in assisted living, memory care, and short-term stays. We're committed to providing care that feels like home.

Our approachable team invites you to schedule a tour, allowing you to experience firsthand the warmth, care, and peace of mind we offer. Contact us today to learn more about the costs of assisted living and how we can support you in this important chapter of life.