Contemplating paying for an assisted living facility (ALF) is admittedly a daunting thought. Unlike nursing homes, government financial assistance for ALFs is very limited. Average costs for a one-bedroom unit are in the $2800/month range, and about a third of ALFs charge a one-time entrance fee, which average about $1600. As you would probably guess, most of the costs of assisted living are borne by the resident and his or her family. Specifically, while 40% of ALF residents pay for services themselves, nearly half use family funds to pay. Other sources of payment we usually think of when it comes to health care will be discussed individually.
Long-Term Care Insurance
These policies may be incredibly helpful in paying for the costs of assisted living, but there are lots of caveats. First of all, a diagnosis of Alzheimer's disease or other type of dementia will likely lead to rejection of your long-term care insurance application, so think about coverage at a younger age if possible. Policies vary greatly, so read the fine print.
Medicaid
After self-pay and family support, Medicaid is the next largest source of payment for assisted living services. More than 40 states cover services for qualified, low-income people through Medicaid waiver programs. These waiver programs allow tens of thousands of seniors to live in ALFs, but often states cover only a limited number of residents and have lengthy waiting lists. Medicaid funds can only be used for services, not for room and board, but states often create clever ways to overcome this exclusion. Waivers were created primarily so that people who would otherwise have had to go to a nursing home are able to live an ALF instead.
Supplemental Security Income(SSI) and VA Programs
The Social Security Administration runs an income supplement program for low-income people who are blind, aged and disabled. Qualifying has strict requirements as to your financial resources and income, but if you do qualify you are paid a monthly check to bring your total income up to the SSI limit. Realistically, SSI as a primary source of payment for ALFs is very uncommon(less than 1%).
The Veterans Administration(VA) provides benefits to veterans and their spouses that may be applied to ALF costs. Determining eligibility for benefits is complicated, but you can begin your search by visiting the VA web site or by calling 1-800-827-1000. I've had many patients in Rhode Island who have taken advantage of VA benefit programs to help pay for assisted living costs.
Five Questions To Ask About Paying for an Assisted Living Facility
- What is included in the basic fee and what is charged as an extra fee? These days the trend is for facilities to have an all-inclusive rate, but many still have what is known as tiered pricing for bundled services.
- When and how often are rates increased? Long-term care costs continue to rise, and a facility should be able to give you a history of their fee increases over the past several years.
- What is the ALF's refund policy?
- What are my options if and when our funds are depleted?
- What happens if medical needs increase or the level of care changes? For example, I may be able to give myself a shower and take my own medications now, but a year from now that may change
Source:
The Senior Care Source, Novartis: Facts, Figures & Forecasts; 2008; vol. 5, pp. 34-44
