How Much Does Assisted Living Cost And How To Pay For It
What Does Assisted Living Cost?
Communities have a rental rate range starting from $2,000 a month, with the national average cost of assisted living around $4,300 per month. The amount largely depends on 3 factors:
- How much care does the resident require? For individuals that need help with a lot of activities of daily living (ADL’s), the cost can be more. This is important to keep in mind and understand that the cost may increase over time as care needs increase.
- Location. As will any real estate, location affects the cost. Because we have advisors that work and live in your area, we have close connections with owners of residential assisted living homes as well as larger communities, so we will find the most affordable living solution for you and your loved one.
- Size of the room. Most communities have either a shared room or a private room option. This is, of course, up to the resident’s preference, but opting for a shared room is a more affordable option.
Most larger assisted living facilities have a “rent+level of care” pricing model. Which means you have a flat base price rent of the room and then added charges based on the level of care required. On the other hand, the residential assisted living homes typically have a “flat rate all-inclusive” pricing model, meaning your price is the same every month regardless of the care provided.
One more thing to consider is the additional community fee or security deposit. Each community or home has a different fee, but we will make sure you are aware and understand all the costs associated with moving in prior to move in. We will advocate for you to find a great community at every price level that fits you.
How To Pay For Assisted Living
Tapping into Home Equity and Home Sales
Typically, real estate is one of the largest assets an individual has. If your loved one is unable to stay in their home, you can sell the home and use that money to supplement their retirement funds. Utilizing a home or vacation property enables a longer, stress free stay at an assisted living home. Certainly, the decision to sell a home can be very difficult, especially if there were intentions to pass this home to another kin. Also, the process of selling a home can be a long one depending on the current housing market. We are connected with real estate agents across the valley, so let us help ease this process of taking on another weight task.
Family Assistance
Commonly, close family members of a senior requiring assisted living will split the cost of the care. If there are multiple members willing to assist, the cost between everyone is relatively low and feasible. However, distributing the expenses can be tricky and potentially straining between all parties involved. A vital conversation to have is for everyone to be honest and upfront about their own financial obligations. This time is stressful so it is important to approach this conversation without judgement and pressure to contribute more than each party is able. On the same note, another conversation that is important to consider is for the senior(s) requiring care to be reassured that they are not a burden by receiving financial help.
Our Senior Living Advisors have expertise in:
Hospital or rehab facility discharge
Dementia and Alzheimer’s care
Independent Living
Assisted Living
Life Insurance
Ideally, life insurance policies should benefit our relatives once we are gone. However, if seniors have need of funding for their current care situation, there is an option to take a portion from their current life insurance policy now. There are certain policies that have a cash value, referred to as the “surrender” value that the insurance company will give you for the forfeiture of the death benefit.
Another alternative for maximizing life insurance before death, is to sell the current policy to a third party company. This is often called a life settlement or conversion. The third party buyer will continue the payments and will get the full death benefit when the senior passes. In exchange, the company will give the senior a percentage, ranging from 35%-50%, of what the death benefit would be. Of course, that amount varies based on the value of the policy and other factors, and is paid out in a lump sum. That payment is taxable so that may disqualify a senior from receiving Medicaid benefits.
Long-term care
Long-term care (LTC) policies are an excellent way to fund the cost of a predetermined number of Activities of Daily Living (ADL’s) in an assisted facility. Depending on the policy, it may pay out for a defined number of years, up to a determined dollar amount in a lifetime, or after a specific benefit period has elapsed. Typically, plans offer a daily dollar amount, $125 for example, to pay for the senior’s care and cover most services. One thing to keep in mind regarding these long-term care policies is something referred to as an “elimination period.” That is the waiting period between when your loved one is placed into a home and when the benefits kick in. Some plans’ elimination period requires a number of days, like 30 or 90 days, or payment out of pocket, up to a certain amount, before the plan becomes active. The owner of the policy, or their power of attorney, will be reimbursed for the cost of the facility upon each transaction. Let us help navigate your LTC policy and maximize the benefits that you have been contributing to. If you have questions, you can learn more about LTC insurance on the US Department of Health and Human Services website.