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Many people’s retirement plans focus on paying the bills and leaving enough for life’s little luxuries, like vacations and a good old game of golf. Who has time to consider residential care costs? But, in later years, taking care of daily tasks may become a bit challenging and this is when the need for senior living comes more into focus. Assisted living is ideal since it combines care services with home comforts, such as freshly prepared meals and private apartments. It is costly, though, averaging $4,000 per month in Florida and $4,500 across the country.
It may be that you or your family can afford to pay out of pocket, but the majority of Americans need to find other ways of covering care costs. Let’s take a look at some of your options in more detail so you have a clear idea of how you can afford to pay for the care you need and deserve.
Exploring State Financial Assistance Programs
Even though Medicaid doesn’t cover the full cost of assisted living, there may be other options for low-income seniors who qualify. Although it doesn’t cover assisted living costs directly, most states have waivers that allow for alternatives to institutional care, such as assisted living. However, waivers don’t pay room and board costs, and they’re not entitlement programs, so you might end up on a waiting list if you’re approved.
Florida’s Statewide Medicaid Managed Care Long-Term Care Program (SMMC LTC) waiver can offer you some relief on assisted living care costs. You’ll be assigned a case manager who will help you get the care you need with as few service gaps as possible. To qualify, you must be a Florida resident aged 65+ who is deemed medically in need and eligible for Florida Medicaid.
There are a ton of financial assistance programs nationwide, so Paying For Senior Care provides a comprehensive list of financial aid opportunities across the country and helpful tips for creating a budget.
Tapping Into Home Equity
Did you know you can use the equity you have in your home to pay for assisted living? Let’s look at three ways you can tap into your home equity to cover those care costs.
If you’re 62+, you can get a lump sum from a home equity conversion mortgage (known as a reverse mortgage) using your home as security. You’ll still own your home until you choose to sell it or you pass, but you’ll have to pay property taxes and homeowners’ insurance. Why not compare some of them to see if it’s right for you?
A home equity loan (HEL) lets you borrow up to the amount of equity you have in your home. If you own 100% (i.e., no mortgage), your equity is its market value, but if you still owe money, you’ll need to deduct what you owe, and what’s left is your equity. The fixed interest rate should make it easier for you to budget, but you could lose your home if you don’t repay the loan.
A home equity line of credit (HELOC) is like a credit card whose limit is equal to your home equity. You can borrow what you need when you need it, and then start repaying over the agreed period. You’ll only pay interest on what you borrow, but because your home’s collateral, you could lose it if you don’t keep up with the repayments.
Understanding Long-Term Care Insurance Options
If you’re someone who thinks ahead, you probably already know about long-term care insurance. It reimburses you a daily amount to pay your care costs. Your age when you buy the policy, how much it pays and the time it covers will determine what your premiums are, so starting early is wise. Another reason for buying early is that you might not qualify if you’re in poor health.
Here’s how it works. The typical Miami assisted living facility charges $4,385 per month, which pays for staff to help with activities of daily living (ADLs) and room and board. The policy covers care costs up to their maximum limit (or for its lifespan), but the benefits don’t start until an “elimination period” of 30, 60 or 90 days has passed. You’ll need to get funding for your care from another source until the policy kicks in.
Note, if you are looking for care now and don’t already have a long-term care insurance policy, this won’t be a viable option to pay for senior living as it must be purchased in advance.
Navigating Veterans’ Benefits
You might qualify for other benefits, such as disability compensation and health care in VA medical centers, if you’re a U.S. military veteran and a senior. Many vets with VA pensions qualify for Aid and Attendance, which can pay some assisted living costs. The financial help you’ll get depends on what the individual assisted living facility accepts, so you’ll need to speak to its administrator to know for sure.
The Bottom Line
Around-the-clock assisted living care can improve your quality of life. But choosing the right facility is only one step; you’ll need to find funding as well. Thankfully, there are options because you might qualify for a Medicaid waiver or Aid and Attendance, or you could tap into your home equity or buy a long-term care insurance policy. Start your journey now, carefully consider your options and research them thoroughly, and you could find the ideal way to pay for assisted living.