What is the most frequent way assisted living is paid?

Assisted living is a popular option for older adults who require some assistance with daily activities but still want to maintain their independence. However, the costs associated with assisted living can be daunting for many families. In this comprehensive blog post, we will explore the most frequent ways assisted living is paid for, providing valuable information and insights to help individuals and families navigate the financial aspect of senior care.

Most Common Payment Methods for Assisted Living 

1. Private Funds: This remains the most common payment method, including:
   1. Personal savings
   2. Retirement accounts (401(k)s, IRAs) 
   3. Pension payments
   4. Private long- term care insurance 
   5. Home equity (reverse mortgages, home equity loans) 
   6. Life insurance policies (life settlements or accelerated death benefits) 
2. Veterans Benefits:
   1. Aid and Attendance benefit
   2. VA Survivors Pension
      1. Wartime veterans and spouses, as well as federal and postal employees, may qualify for pension programs or Federal Long Term Care Insurance to help offset assisted living expenses.
   3. Disability compensation
   4. VA health insurance 

3. Public Assistance:
   1. Medicaid Home and Community-Based Services (HCBS) waivers
   2. State specific programs (availability varies) 
4. Social Security Benefits:
   1. While not typically enough to cover full costs, can contribute to overall payment.
5. Long-Term Care Insurance:
   1. Can help offset costs significantly if purchased early.

Tips for Stretching Assisted Living Budget

In addition to exploring different payment options, there are also strategies for stretching your assisted living budget. This may include negotiating for price flexibility, comparing all-inclusive pricing with a la carte costs, considering roommates to split costs, enrolling in discount programs for essentials, saving on moving expenses, and exploring tax credits and deductions 

to make assisted living more affordable.

Recent Trends and Updates:

1. Medicaid Expansion: As of May 2024, 41 states (including DC) have adopted Medicaid expansion, potentially increasing access to assisted living coverage for more seniors.
2. Social Security COLA: A 3.2% cost-of-living adjustment for Social Security benefits in 2024 may help offset some rising costs for seniors.
3. Increasing Focus on Home Care: Due to the COVID-19 pandemic and personal preferences, there’s a growing trend towards home-based care options, which can be more affordable than facility-based assisted living.
4. Technology Integration: Many assisted living facilities are incorporating more technology for health monitoring and social engagement, potentially affecting costs and care quality.
5. Financial Planning Importance: With the rising costs of care, there’s an increased emphasis on early financial planning for long-term care needs.

Tips for Stretching Assisted Living Budgets:

1. Negotiate pricing with facilities (SeniorPlaced takes care of negotiation for saving a minimum of $500/month for you) 
2. Compare all-inclusive vs. a la carte pricing models
3. Consider shared living arrangements
4. Explore local and state-specific assistance programs
5. Look into tax deductions and credits related to long-term care
6. Investigate transitional care options or respite stays to delay full-time assisted living

What Is Included in Assisted Living Costs?

So we’ve covered how to pay for Assisted Living but what do you get for paying an average of over $6000/month? The average cost of assisted living varies from state to state and location to location, also depending on factors such as the level of care a patient needs and the types of amenities that they’re wishing for. Here are some of the things that typically make up the cost of assisted living:

• Living space (as well as utilities and maintenance)
• Meals (typically provided 3 times daily)
• Personal care services
• Housekeeping/Laundry
• Social and recreational activities
• Security and safety
• “Premium” amenities, such as transportation, 24-hour staffing, and wellness programs

You can speak directly with SeniorPlaced’s Care Specialist or use online resources such as assisted living cost calculators to get a general idea of how much you’ll be spending on long-term care and compare prices for different locations. Note that there’s a difference between assisted living cost and home care. 

How Much Does Assisted Living Cost in California?

According to a survey done by Genworth on the cost of care in 2023, the average monthly cost for assisted living in the state of California is a whopping $6,250 per month. Home care is (understandably) significantly cheaper at an average of $36/hour in California, of course, depending on how many hours you’ll need to hire someone for and the costs of food, living space, etc., that are covered in the cost of assisted living facilities as listed above. 

Overall, there are various ways to pay for assisted living, ranging from private funds and veterans benefits to public assistance programs like Medicaid and Medicare. By understanding the different payment options available and exploring strategies for stretching your budget, you can make informed decisions to ensure that your loved ones receive the quality care they deserve in their senior years. Planning ahead and seeking advice from financial advisors and elder law attorneys can also help you navigate the complexities of financing senior care.