Assisted living isn't cheap. When you reach the decision that an assisted living community is the appropriate care setting for your loved one, you may be struggling with how to finance such care. Medicare, Medigap, and Managed Care will not reimburse assisted living expenses.
This means that most assisted living is paid out-of-pocket. Therefore, it makes sense to take steps to plan for and reduce the amount of money you will have to pay for assisted living costs. Here are some things to consider:
1) Advanced planning yields better results.
Families that plan ahead for the possibility of assisted living are in a better position to comparison shop than those who do not. Many assisted living communities have a waiting list, so finding the right place might involve getting a loved one's name on that list ahead of time.
Having a frank discussion with seniors about both their physical needs and their financial circumstances will help steer you in the right direction when you begin comparing communities. Just as is the case with every major financial decision, a clear understanding of your budget is key.
2) Check out Medicaid or Veterans Benefits Options
Medicaid: If you happen to live in a state where Medicaid pays for some or all of the costs of assisted living, familiarize yourself with the things it will cover by consulting state Medicaid authorities. It is important to note that not all assisted living communities accept Medicaid, so do not assume that your community will do so. It is a good idea to check in and confirm what the community will or will not accept.
Veteran's Benefits: If an older adult served in the military or had a spouse who did so, the Veterans Administration may be able to provide guidance on whether assisted living benefits are available. The requirements for receiving these benefits are quite specific, so it is a good idea to check on eligibility as soon as possible.
3) Explore insurance options to reduce assisted living prices.
Long-term Care Insurance: Many long-term care insurance policies cover certain expenses incurred in assisted living. Both Facility Only and Comprehensive plans can help you cover some of the costs of care. Of course, coverage varies depending on the long-term care insurance policy you choose.
Life Insurance: In some cases, it is possible to use life insurance to help pay for assisted living. Many insurance companies offer accelerated or living benefits that enable you to cash out a policy for a percentage of its face value in cases of need. Check with your life insurance agent to see if this is an option.
Third-party Settlement Companies: If it is not an option to cash out the policy, you may still be able to put your life insurance to good use by selling the policy to a third-party settlement company that will buy your policy at a percentage of its face value with the agreement that upon the death of policyholder, benefits will be paid to the settlement company.
4) Work with a financial planning service.
Some families find it advantageous to access the expertise of financial service companies that specialize in helping older adults find inventive ways to pay for assisted living and long-term care. These companies work with assisted living communities and CCRCs to find ways to cut the costs of long-term care on an individualized basis.
5) Understand the variety of living arrangements available.
Once you know the sources of financial aid available, there is still much you can do to reduce assisted living prices. Here are a few things that can help you lower costs:
• Choose the appropriate living space size. While communities may offer studio, one-bedroom, and two-bedroom arrangements, you can save significant money by choosing the smallest comfortable option for your loved one.
• Consider sharing. While it may not always be possible, in some assisted living facilities, older adults can choose to share or co-house in a living space. Care must be taken to ensure that the two residents are compatible. If a good match can be found, costs can be shared between two families, resulting in significant savings for both.
• Consider a smaller community. Many smaller assisted living communities offer comparable amenities to larger communities at a fraction of the cost. Doing your homework by investigating all options in your area may result in savings.
• Check out neighboring towns or states. The cost of assisted living can vary widely from place to place. If appropriate, thinking outside the box about location may net serious savings.
• Compare all-inclusive packages with a la carte services. Depending on the level of care your loved one needs, it may be advantageous to pick and choose the services utilized rather than paying for an all-inclusive package from the start.
6) Time your requests for maximum impact.
Assisted living communities are subject to the same financial constraints as other businesses. Therefore, it is sometimes advantageous to time your entrance into a community with the end of the month, quarter, or fiscal year. At such times, many communities are open to price and move-in fee negotiation.
Occupancy level is also a determining factor in how willing a community is to negotiate better pricing. While this information is not generally available to the public, it is often available to assisted living referral services. Checking with these services may provide valuable information about communities that are willing to negotiate.
Research Leads to Savings
With such a variety of ways to finance assisted living, it is wise to research all your options to maximize your savings potential. To aid in your research, check out our senior housing information today.