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All About Paying For Senior Living

Finding The Best Options For Your Family

Figuring out the best senior living option and the associated costs can seem daunting. At The Crossings, we’re always happy to help with some of the most commonly asked questions about financing your retirement years. Don’t hesitate to come to us if you’d like help in planning how to finance senior care for yourself or a loved one.


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Your Questions Answered

How much does senior living really cost?

There are several different variables that can drive the cost of senior living, including location, type of care, and level of services and amenities. The national median costs of care for assisted living services were $4,500 monthly and $54,000 annually in 2021, according to a survey by the National Center for Assisted Living. Senior apartments without care are generally less costly than those with higher levels of care.

Does Medicare cover senior living?

Seniors and their families are oftentimes unaware that Medicare does not cover assisted living costs – outside of 100 days skilled services or rehabilitative care for a qualified stay. After a standard yearly deductible, Medicare Part A only covers hospital stays, short stays in a nursing home for certain kinds of illnesses and hospice care in the last six months of life.

What forms of financial assistance are available?

We can help you determine whether financial assistance is available for you or a loved one. United States wartime veterans can qualify for the Aid & Attendance benefit for veterans and their surviving spouses. This monthly benefit is in addition to a veteran’s regular pension and can help cover the costs of assisted living or nursing care. It is a “pension benefit” and not dependent upon service-related injuries for compensation. Most veterans in need of assistance qualify; however, we recommend that you allow plenty of time for the application process.

If you or your loved one fall below a certain income level, Medicaid may help cover a portion of senior community or nursing home costs. Each state has its own set of regulations for qualifying, so be sure to look into Medicaid assistance specific to Alabama.

Is senior living covered by long-term care (LTC) insurance?

Depending on the type of policy, long-term care insurance benefits can be applied to nursing home costs and/or assisted living care; all you need to know is how to start using your benefits. There are increasingly flexible long-term care policies available that can meet needs ranging from adult daycare to assisted living to skilled nursing, with a few policies even paying a family caregiver for in-home care. Premiums may be tax-deductible, and benefits from tax-qualified plans are non-taxable, making this option even more attractive. Be aware that premiums can be costly and increase in cost with age and poor health, so experts recommend individuals begin planning between the ages of 52-64.

What are other ways to pay?

Traditionally, Americans’ most valuable asset is their home. But, depending on the housing market and other factors, that capital may not be available when the time comes to make the move to a higher level of care. Many individuals and families first try to pay for senior living with the profits made from the sale of a house, but may also decide to look into other options, like renting the house or using the house to qualify for specialized loans.

An example of this is a bridge loan – used when individuals need access to funds right away but are waiting for a home to sell. This interest-only loan taps into a home’s equity to pay senior living expenses until the home sells. Then the borrower pays off the loan with money from the sale of the house.

Often seniors have funds invested in a life insurance policy but find they need financial support while living. In this instance, individuals would ask their life insurance company about “accelerated” or “living” benefits, in which case the company buys back the policy for 50 to 75 percent of its face value. Different rules may apply depending on the company and type of policy. Another option, known as a “life assurance” benefit or life insurance conversion program, allows seniors to convert the benefit of a life insurance policy directly into long-term care payments.

Additional questions?

If you have additional questions about senior living and how to pay, we encourage you to contact us at The Crossings at Riverchase so we can provide you with the information you need to make the best choice for you or your loved one.