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Unfortunately, many Americans simply do not have the funds to pay for the rising costs of traditional assisted living facilities. Researchers estimate that by 2029, more than half of middle-income seniors in the U.S. won’t be able to afford annual assisted living costs.
Fortunately, there are many financial assistance options and resources for older adults with limited income. These range from subsidized housing to VA benefits and social security income. In this article, we’ll discuss how to make assisted living work with any financial status.
Pro Tip: For top living facilities recommendations, enter your zip code and read our guide to the best assisted living facilities by city.
Assisted living costs vary from state to state. Generally, urban areas have higher costs than rural areas. There could also be a higher need for senior housing in a particular area, thus driving up the costs of assisted living facilities. Some of the most common factors related to assisted living costs include the level of care, the location, the amount of personal care, and the supervision required, along with additional amenities.
Compared to senior apartments, assisted living facilities can be more expensive. On average, an assisted living facility can cost $4,300 per month or up to $60,000 annually. Most people pay for assisted living by tapping into their savings or social security income. Other ways to pay for assisted living facilities can include long-term care insurance, VA benefits, and Section 202 or other federal government or state-supported programs.
FYI: There are certain policies that can help cover gaps in original Medicare. Read our guide, Best Medicare Supplement Plans for Low-income Seniors, to learn about supplemental insurance for older adults with limited income.
There are many ways to help pay for the costs of assisted living. Each of them varies in terms of eligibility, services it will pay for, and dollar amounts.
Section 202, or Supportive Housing for the Elderly Program, is funded by Housing and Urban Development (HUD) and is intended for low-income seniors, including “the frail elderly.” The program helps provide rent subsidies for low-income seniors who wish to live independently but still need assistance with daily living tasks such as cooking, meal prep, and transportation.
This program is open to any low-income households that have at least one older adult who is at least 62 years of age. To apply for this program, individuals should check their eligibility status and research Section 202 Houses in the area. From there, you can contact a Section 202 representative to obtain more information about the unit and learn more about the application process. In general, the program pays up to 70 percent of the cost, while eligible residents are required to pay up to 30 percent of their net income towards rent.
These benefits are funded by the VA and available to all eligible U.S. military veterans and their spouses. VA benefits can help pay for the cost associated with assisted living or a nursing home.
Examples of VA benefits include disability compensation, health care, home loans, and burial. For “elderly veterans,” the VA offers two programs for senior housing: the Aid and Attendance program and the Housebound program. The Aid and Attendance program provides a monthly pension amount, pending certain qualifications such as the need for assistance with daily tasks such as eating or dressing. To receive assistance from the Aid and Attendance program, an older adult may be eligible if they receive a VA pension and meet one of the following criteria:
According to Veteran Aid, Aid and Assistance can pay up to $2,230 per month in VA benefits for an older veteran and his/her spouse. One of the restrictions of the Aid Attendance program is you can’t get Housebound benefits during the same time.
If you’d like to apply for Aid and Attendance or Housebound Benefits, you can send a completed VA form to your pension management center and fill out VA Form 21-2680 (Examination for Housebound Status or Permanent Need for Regular Aid and Attendance). Alternatively, you can apply in-person at the nearest VA regional office.
For older veterans who need help with activities of daily living, you can enroll in the Adult Day Health Care program through the VA. This program is for veterans and can be used in combination with other Home and Community-Based Services. It’s provided at VA medical centers or through other community organizations.
Long-term care insurance is a great option for older adults who need financial assistance to help pay for the cost of assisted living, in-home care, or nursing homes. You may qualify for long-term care insurance if you have a disability or your health provider is able to certify that you can’t perform several activities of daily living alone. Long-term care insurance can also benefit older adults with Alzheimer’s, dementia, or other chronic medical conditions.
The amount that long-term care insurance can cover depends largely on policy and risk of age. For example, the 2021 American Association for Long-Term Care Insurance estimates that a 65-year-old male can pay an annual premium of $1,700 for a $165,000 long-term care insurance policy. If needed, long-term care insurance can cover up to $165,000 worth of needs related to the cost of assisted living or in-home care, or nursing care.
To apply for long-term care insurance, you can look into different insurance providers that offer long-term care insurance policies and may need to answer a health questionnaire or additional health screenings.
Pro Tip: Caring for someone with Alzheimer’s or dementia that requires a reliable medical alert system? Read our guides to the best medical alert systems for dementia and best medical alert systems overall.
Medicaid may help cover some of the costs related to assisted living for low-income older adults. Medicaid provides health coverage to millions of Americans and low-income older adults. The program is funded by individual states and the federal government.
Pending eligibility and certain qualifications, Medicaid may help pay for the cost of assisted living as well as Alzheimer’s or memory care. Medicaid can also cover select long-term care services for individuals that are eligible, according to the American Council on Aging.
Although Medicaid eligibility differs by state, some of the most common eligibility factors include the following:
There may be certain coverage limits on income or age, so it’s best to visit your local state Medicaid website. Eligible seniors can also go through the respective HCBS Medicaid Waiver that’s offered through their state, also known as Home and Community-Based Services Programs or 1915(c). To apply for Medicaid, you can apply through the Health Insurance Marketplace or with your state Medicaid agency.
If you need help covering certain costs related to assisted living, there are still plenty of Non-Medicaid State programs available. Keep in mind that these programs may differ by name or services depending on states and other qualifications and criteria. Non-Medicaid State programs might be able to help cover the cost of room and board or have other forms of financial aid available to older adults.
These programs usually help older adults with financial assistance or the opportunity to make certain home modifications so they can reside in the comfort of their own homes. These programs go by different names, depending on the state you live in.
For example, Georgia offers the Non-Medicaid Home and Community-based Services Waiver to help older adults live safely and independently in their homes. This particular program is eligible to individuals aged 60 and up in the state of Georgia, but some individuals may be eligible for some programs at 55. I’d recommend looking into the programs your respective state offers and inquiring about the eligibility and application process.
Social Security can be used to cover some costs of living associated with an assisted living facility. The federal government-funded program helps pay retired or older adults that are 65 and older with a continuing income that can be used toward assisted living costs.
Although Social Security can’t cover the full cost of assisted living, it can still be used to cover some assisted living costs and services. You may need to also tap into other resources such as private funds, annuities, pension, savings, or other financial aid sources.
According to Retire Fearless, the average Social Security benefit for seniors is $1,503 per month. In comparison, an assisted living facility can cost upwards of $4,500 depending on amenities and services. Depending on your benefit amount, you can use it towards the cost of services at an assisted living facility. The benefit amount that you receive greatly varies depending on your earnings before retirement and the taxes that you paid into the program.
While assisted living costs can be expensive, there are several alternative and more affordable senior housing options to consider. Some of these alternatives include residential care homes and an Assisted Living Conversion Program. I’ll take a closer look at these types of alternative senior housing options.
FYI: If you’re looking for alternative housing options to assisted living facilities, check out options that help you age in place at home. Read our guide: Alternatives to Assisted Living.
Similar to assisted living facilities, residential care homes provide daily living assistance with personal care tasks and meal preparation. Usually, the staff at residential care homes offer more personalized or individualized attention to a few seniors, rather than hundreds. On average, a residential care home can house as few as 10 seniors. This gives older adults the opportunity to bond with staff and have their needs met right away.
Additionally, one of the other benefits of residential care homes is they’re located near other residences, making it a desirable location as opposed to senior apartments or busy settings. As a single-family residence, seniors have the opportunity to get one-on-one care with extra security and peace of mind.
In general, residential care homes can be a great alternative to assisted living or nursing homes. The pricing for residential care homes can range between $2,500 to $5,000 per month, depending on your location. For financial assistance, you can look into social security income or use your private funds as a last resort.
Did You Know: Residential care homes are also known as adult care homes, or single-family residences that offer care to older adults and seniors with disabilities. Read our guide to Adult Care Homes, to learn about the benefits of personalized care and a smaller facility.
The Assisted Living Conversion Program gives eligible private nonprofits a grant to convert some or all of their units into an assisted living facility or service-enriched housing facility for the “frail elderly” or individuals with disabilities who need assistance with daily living tasks.
The ALCP program is intended for seniors who can live independently, but require assistance with daily living activities such as grooming, bathing, and other daily tasks. The program also offers Service-Enriched Housing, which is aimed at helping individuals with disabilities or older adults who have functional limitations and can’t perform at least one activity of daily living.
Services for the ALCP program must be available through a licensed or third party service provider. Additionally, this program is an alternative to traditional assisted living facilities. The program is open to private nonprofit owners of Section 202, Section 8, section 221(d0(3), and Section 236 housing developments intended for older adults.
An individual qualifies as low-income based on three eligibility criteria. This includes annual gross income, whether you’re an older adult or individual with a disability or family; and U.S. citizen status.
According to the HUD, the lower income limits are set at 80% and “very low-income limits” are set at 50% of the median income for the county or metro area where you live. Income limits may vary from location to location, so it’s best to reach out to the HUD for more clarification.
The Department of Housing and Urban Development is responsible for setting income limits for eligibility for certain housing programs related to public housing, Section 202 housing for the elderly, or Section 8 Housing Choice Voucher, and Section 811 housing for individuals with disabilities. Individuals with limited income can apply for financial assistance pending eligibility through these housing programs.
Pro Tip: Medicaid is a federally-funded program for older adults over the age of 65. Read our guide, Medicare vs. Medicaid, to learn about the differences between Medicaid and Medicare—two vital financial assistance programs for seniors.
The best way to find low-income assisted living options is by inquiring about it through your local senior center or city government. There may be a wealth of resources relevant to older adults with limited income that are looking for affordable assisted living options. I’d also recommend searching the HUD website and looking into financial assistance options for low-income older adults. This could range from utilizing Veteran’s Benefits to applying for Section 202 housing or other vouchers to help cover some of the costs related to assisted living and other services.
To learn more about alternative housing options, read my articles, Senior Housing Alternatives: Innovative Ways to Live Independently, or The Best Alternatives to Assisted Living.
To learn more about senior living communities, be sure to check out our helpful guides:
Social Security won’t be able to pay for the full cost of assisted living, but the benefits can be used to cover some assisted living-related costs.
Individuals with disabilities or older adults that need occasional assistance with daily tasks, meal preparation, or personal care and home maintenance tasks would qualify.
Eligibility for Section 202 is available to low-income seniors age 62 or up, or any member of the household that has at least one person who meets the minimum age requirement.
In general, Medicaid won’t cover room and board for assisted living. However, the cost of nursing care or other services might be covered depending on eligibility and the state you live in.
Unfortunately, Medicare does not cover the cost of assisted living.
If you’re a senior with a fixed or limited income, you may benefit from looking into certain federal or government programs pending eligibility and income verification. You can look into housing vouchers and other financial assistance aid.