Many people assume assisted living is impossibly expensive or that they could never afford it. In reality, the cost of assisted living can be very affordable. Rates vary based on several factors, like location, services and amenities, and the amount of care a resident requires.
When considering all the monthly costs of maintaining a home and adding on the value of meals, housekeeping services, a daily calendar of events, and on-site amenities, moving to an assisted living community could actually be a cost-effective option that also brings wonderful lifestyle changes.
The price of assisted living varies by location across the country, as a facet of the real estate market. Genworth Financial, which conducts the most comprehensive report of senior living costs, places the current national average for assisted living at $5,350 per month.
How Can I Pay for Assisted Living?
Assisted living can be funded in a variety of ways, including private funds, long-term care insurance, veterans benefits, and sometimes Medicaid. Private funds can be drawn from savings accounts or personal investment portfolios, like 401(k) accounts, pensions, or individual retirement accounts (IRAs).
It’s typical for homeowners who decide to move into assisted living to sell their homes and use their accrued equity to cover the costs.
Related: Get tips on how to financially prepare for a move to assisted living >>In some cases, homeowners may also borrow from accrued equity, by taking a home equity loan or a home equity line of credit (HELOC) to pay for the cost of assisted living.
As everyone’s situation is different, a trusted financial advisor is an excellent resource in helping to determine the options you have for financing a move to assisted living. Read on for more information about the common options.
Discover assisted living at The Bristal >>Long-Term Care Insurance
A long-term care insurance policy is purchased through a private company, but even the most comprehensive plans typically cover a limited scope of services. Regarding the cost of assisted living, many policies will only cover the costs if the person is unable to perform two or more ADLs, like dressing, bathing, eating, or using the bathroom. Some insurance companies evaluate individuals using their own doctors to see if they qualify.
In some cases, life insurance policies have long-term care riders; in other cases, it may be possible to convert a life insurance policy into a long-term one. If this isn’t possible, you might be able to sell a life insurance policy for its present value, called a life settlement, and use the money to pay for assisted living care.
Related: Find out what to do before moving to assisted living >>
Veteran Benefits
The Veteran Administration’s Aid and Attendance (A&A) pension is an additional part of a veteran’s regular pension that can pay for assisted living costs up to a maximum amount set by the federal government each year.
To qualify for these benefits, veterans age 65 or older who served on or before September 7, 1980, having served at least 90 days, at least one day of which was during wartime regardless of where they were stationed, must also have received honorable discharge.
Surviving spouses of veterans may also qualify to collect veterans benefits, which can be used toward assisted living costs, but restrictions may apply.
Related: Learn more about veterans' benefits for assisted living >>Medicare
Does Medicare cover the cost of assisted living? This question comes up often; unfortunately, the answer is usually no. However, in limited circumstances, Medicare may cover a portion of the costs associated with assisted living if the care received is considered medically necessary.
In most cases, services rendered at an assisted living are not considered “medically necessary” by Medicare. Assisted living provides residents room and board, opportunities for socializing, and assistance with activities of daily living (ADLs) as needed, none of which are the skilled care services that Medicare covers.
Medicaid
Unlike Medicare, Medicaid may cover assisted living costs, but a person's coverage, financial aid, and eligibility differ from state to state. In some states, there is no Medicaid coverage for assisted living. Even if a state’s Medicaid benefits cover assisted living, not all communities within that state accept those benefits.
Whether or not a community accepts Medicaid depends on the type of licensure it has from the state Department of Health.
Assisted Living Costs at The Bristal
At The Bristal, we understand that older adults want to continue leading independent lives. We’re here to help them do that by offering assistance, convenient services, and luxury amenities in our numerous locations on Long Island, in Manhattan, Westchester County, and New Jersey.
Download your free guide today to learn more about paying for assisted living and the costs you can expect.
This blog was originally published in 2019. It was updated in July 2024.
