Your Questions Answered
How much does senior living really cost?
Several variables can drive the cost of senior living, including location, type of care, and level of services and amenities. The national median cost of assisted living services was $5,350 per month and $64,200 annually in 2024, 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 may not realize that Medicare does not cover assisted living costs outside of 100 days of 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 illnesses and hospice care in the last six months of life.
What forms of financial assistance are available?
We can help you determine whether any financial assistance is available for you or a loved one. United States veterans and their surviving spouses can qualify for the Veterans Aid & Attendance program. This monthly benefit is in addition to a veteran’s regular pension and can help cover the costs of assisted living or nursing care. As a “pension benefit,” it is not dependent upon service-related injuries for compensation. The application can take several months to process, so it’s a good idea to get started in advance.
Medicaid can help cover the cost of care in a senior living community or nursing home if you or your loved one’s income level is below a certain threshold. Because each state has its own rules for eligibility, it’s important to review the Medicaid guidelines specific to Alabama to understand what assistance may be available.
Is senior living covered by long-term care (LTC) insurance?
Depending on the policy, long-term care insurance can help pay for assisted living or nursing home care. It’s a good idea for policyholders to become familiar with how to access their benefits so they are prepared when the time comes. Many long-term care policies are flexible and may cover a range of services, from adult day programs to assisted living and skilled nursing care. In some cases, premiums may be tax-deductible, and benefits from certain tax-qualified plans are not taxable, which can make this type of insurance especially helpful. However, premiums can be expensive and often increase with age or declining health, so planning should begin between the ages of 52 and 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 it’s time to move to a higher level of care. Many individuals and families first try to pay for senior living with the proceeds from the sale of a house. Still, they may also consider other options, such as renting the house or using it to qualify for specialized loans. One option is a bridge loan, which is designed for people who need funds right away but are still waiting for their home to sell. This type of loan is interest-only and uses the home’s equity to cover senior living expenses until the sale is complete. Once the house is sold, the loan can be paid off with the proceeds.
Many seniors have money invested in a life insurance policy, but may find they need financial support while they are still living. In these situations, it can be helpful to ask the insurance company about accelerated or living benefits. With this option, the company may buy back the policy for a portion of its value, often between 50-75%, though the exact terms vary by insurer and policy type. Another option, called a life assurance benefit or life insurance conversion program, allows seniors to convert the value of their life insurance policy directly into payments that can be used for long-term care.
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.