What you need to know about payment options

You’ve done your research and found that there are many advantages to moving into a senior living community. You’ve decided to take the leap of faith, but before you start packing, you need to figure out how you’ll pay for it.

This guide will help you understand available financial options and ways to pay to ensure the burden of payment isn’t an overbearing issue for you.

Financial Planning

One of the first questions you might have if you’re looking into senior housing for the first time is, “How much does it cost?” It’s important to look into your options and have a sense of the range of costs associated with senior living.

Quite a few factors affect the final cost. The cost might vary depending on a number of factors, including where you live, the size of your apartment, if you have a roommate, and the kind of daily care you require.

The majority of assisted living facilities are funded privately by families. Retirement funds can come from a variety of sources, such as a person’s own savings, a pension, or a retirement account. Many retirees put money away over the years, but their families still often chip in to help pay for their care.

Determine
Budget

You have to pay different bills for things like the mortgage, utilities, property taxes, and homeowner’s insurance if you live at home. You also need to set aside money for things like food, health care, fun, and travel.

A large portion of seniors are taken aback when they learn that their current expenses are comparable to those of an assisted living facility. Not only that, but they lack the basic necessities of community life, such as access to utilities and services.

Review
Options

Getting the retirement you’ve always wanted might not be as difficult as you thought, with personal savings and benefit programs and third-party organizations who can assist you navigate the financial waters.

There are certainly more options for paying for senior housing, from private funds to insurance and government programs, than you may believe.

Insurance Options

Life Insurance

If you or a loved one currently have a life insurance policy, you may be able to convert it into a pre-funded account specifically designed to help pay the costs of senior care. This financial alternative provides considerable benefits to seniors because it accepts all health problems and removes the numerous constraints and expenses connected with standard long-term care insurance.

Individuals can obtain cash to pay for senior care without confronting waiting periods, care limits, application charges, or the requirement to be terminally ill by converting a life insurance policy into a pre-funded account. Furthermore, no premiums or fees are necessary, making this choice more accessible and convenient.

It is recommended that you consult with a financial advisor or insurance professional versed in life insurance conversions for long-term care benefits to fully investigate this option and determine its suitability for your unique circumstances. They may give you tailored advice, analyze the policy, and explain the available resources and potential benefits.

Additionally, here are some resources that can offer further insights into converting life insurance policies for long-term care benefits:

AgingCare.com

AgingCare.com provides an informative article discussing how to use a life insurance policy to pay for long-term care. It covers the impact of life insurance on Medicaid eligibility and introduces the option of converting a policy into a long-term care benefit plan. You can find more details on how to use a life insurance policy to pay for long-term care here >>

Family Estate Planning

The Carolina Family Estate Planning website offers information about converting existing life insurance into a long-term care benefit plan. It explains the nature of a long-term care benefit plan, its flexibility, and the advantages it offers. You can learn more at about converting an existing policy into a long-term care benefit plan here >> 

However, it is important to consult a family estate planning firm in your state to ensure the proper laws and regulations are followed.

Long-Term Care Insurance (LTCI)

Depending on the policy and degree of care required, long-term care insurance can be a significant resource for affording various types of senior living care. It can assist in covering the costs of assisted living facilities, nursing homes, in-home care, and other long-term care services. However, it is critical to recognize that not all long-term care insurance policies provide the same level of protection. As a result, it’s critical to carefully study the policy’s fine print to discover what treatments and prices are covered.

It is strongly advised to communicate directly with your insurance provider or get advice from a financial counselor to guarantee a thorough grasp of your long-term care insurance coverage. They can give you personalized information on the policy’s terms, conditions, limitations, and advantages that are relevant to your situation.

There are several resources available to assist you in navigating long-term care insurance options

Dept. of Health and Human Services

The U.S. Department of Health and Human Services‘ website provides information and resources about long-term care insurance, including key considerations and frequently asked questions. You can visit their website at LongTermCare.gov >>

AALTCI

The American Association for Long-Term Care Insurance (AALTCI) is a professional organization that offers a wealth of information about long-term care insurance. Their website provides access to articles, guides, and tools to help you make informed decisions. Visit their website at AALTCI.org >>.

Loan Options

Bridge Loans

When it comes to senior living, the need for help can occur unexpectedly, whether as a result of a medical emergency or the realization that living at home is no longer safe. Many senior financial services provide a solution in the shape of bridge loans to help cover the costs during the changeover period in such cases. These short-term loans serve as a financial bridge until more permanent monies, such as proceeds from the sale of a home, become available.

Elderlife Financial is a reliable alternative to consider for using a line of credit to meet the cost of senior living. They specialize in offering financial assistance to seniors who want to move into the community of their choosing or complement their move while waiting for funds from a property sale or other perks. Elderlife Financial has minimal monthly payments, making it an appealing option for folks who need to move swiftly and easily into a senior community.

To learn more about bridge loans and how they can support your specific situation, Elderlife Financial provides comprehensive information and resources on their website here >>.

Veterans Options

VA Pension

The Veterans Pension program pays monthly benefits to wartime veterans who satisfy specified age or disability standards, as well as have income and net worth constraints.

Certain requirements must be satisfied in order to qualify for the VA Pension. First, veterans must have served on active duty for at least 90 days, with at least one day during a wartime period. A minimum of 24 months of service is normally needed for those who began active duty after September 7, 1980, unless special exceptions apply. Furthermore, there are age, disability, nursing home care, and receiving certain sorts of social security benefits criteria. The annual family income must also be less than the limit established by Congress.

It’s important to know that the VA recognizes various wartime periods in order to evaluate eligibility for pension benefits, including World War I, World War II, the Korean fight, the Vietnam War era, and the Gulf War. These time periods are used to determine whether a veteran is eligible for the VA Pension.

The official VA resources give valuable information and resources to explore for a thorough grasp of the VA Pension program, including information about pension rates, scheduling claim exams, and locating regional pension management centers. You can learn more about the VA Pension program, eligibility, and how to apply on their website >>

Aid & Attendance (A&A)

The Aid and Attendance (A&A) program provides an increased monthly pension amount for veterans who require help with daily functions, are bedridden, reside in a nursing home, or have limited eyesight.

If you receive a VA pension and meet at least one of the qualifications, you may be eligible for this benefit.

At least one of the following must be true:

  • You require assistance with daily activities such as bathing, feeding, and dressing, or
  • you must stay in bed—or spend a significant portion of the day in bed—due to illness, or
  • you are a patient in a nursing home due to a loss of mental or physical abilities caused by a disability, or
  • Your vision is poor (even with spectacles or contact lenses, you have a vision of 5/200 or less in both eyes, or a concentric contraction of the visual field to 5 degrees or less).

 

Learn more about qualifications and how to apply for this benefit on the VA Website here>>

Housebound

The Housebound program offers an increased monthly pension amount for veterans who are substantially confined to their homes due to a permanent disability.

Note: You can’t get Aid & Attendance benefits and Housebound benefits at the same time.

Because these allowances boost your pension amount, persons who are ineligible for a basic pension due to high income may be able to get a pension at these rates.

Learn more about qualifications and how to apply for this benefit on the VA Website here>>

Survivors Pension

A VA Survivors Pension provides monthly payments to qualified surviving spouses and unmarried dependent children of wartime Veterans who fulfill Congress-mandated income and net worth criteria.

You may be eligible for this benefit if you haven’t remarried after the Veteran’s death, if the dead Veteran did not receive a dishonorable discharge, and their service fits at least one of these criteria.

At least one of the following must be true:

  • The Veteran enlisted on or before September 7, 1980, and served at least 90 days on active military service, including at least one day during a covered wartime period, or
  • The Veteran started active duty on or after September 7, 1980, and served at least 24 months or the complete term for which they were called or ordered to active duty (with some exceptions), with at least 1 day during a covered wartime period or period of peacetime service.
  • The Veteran was an officer who began active service after October 16, 1981 and had not previously served for at least 24 months.

And the following must be true for you:

Congress has established certain limits on your annual family income and net worth. Your net worth is the total value of everything you own (excluding your home, car, and most home furnishings), less any debt you owe.

You can learn more about this VA Survivors Pension Program, eligibility and how to apply on their website >>

Medicaid & Medicare

Medicaid

Medicaid is an important government-funded program that provides assistance for senior citizens needing long-term care and assisted living. It is essential for senior citizens to understand the benefits included, where to apply, and additional information to utilize Medicaid for senior living facilities.

Medicaid offers various options to support long-term care services for individuals with disabling conditions and chronic illnesses.

PACE Programs

One program to explore is the Programs of All-Inclusive Care for the Elderly (PACE). PACE provides comprehensive medical and social services to frail, community-dwelling elderly individuals who are eligible for both Medicare and Medicaid benefits.

It allows participants to receive coordinated care from an interdisciplinary team of health professionals and aims to keep them in the community rather than in a nursing home.

While PACE is a Medicare program, states can choose to provide PACE services to Medicaid beneficiaries as an optional benefit, making it the sole source of Medicaid and Medicare benefits for PACE participants.

To be eligible for PACE, individuals must be 55 years or older, live in the service area of a PACE organization, be eligible for nursing home care, and be able to live safely in the community. Participating in PACE is voluntary, and individuals can leave the program at any time.

When considering senior living facilities, it’s crucial to ensure that the facility accepts Medicaid as a form of payment. Not all facilities may be Medicaid-certified, so it’s recommended to inquire directly with the facility about their payment options and any specific requirements they have for Medicaid beneficiaries.

To apply for Medicaid, including PACE, individuals can visit their state’s Medicaid website or contact their local Medicaid office. The specific application process and eligibility criteria may vary by state, so it’s important to gather information from the state Medicaid agency or consult with a local Medicaid enrollment specialist. They can provide guidance on the required documentation and assist in completing the application correctly.

To learn more about PACE, visit the Medicaid.org website >>

Medicare

Understanding government-funded programs like Medicare can feel overwhelming, but it’s important to know how they can provide invaluable support when you need quality care. Medicare is a health insurance program offered by the government, primarily for individuals aged 65 and older, and also for certain disabled individuals under the age of 65. It helps cover various medical services, but it’s essential to understand what Medicare does and does not cover.

It’s important to note that Medicare does not typically cover independent living or assisted living expenses. However, certain aspects of care may be covered depending on your eligibility. For instance, Medicare may cover short-term care in a skilled nursing facility if you meet specific requirements.

Medicare Part A (Hospital Insurance):

This part covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care services.

Medicare Part B (Medical Insurance):

Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services.

Medicare Part C (Medicare Advantage Plans):

Part C refers to Medicare health plans offered by private companies. These plans combine the benefits of Part A and Part B and often include prescription drug coverage.

Medicare Part D (Prescription drug coverage):

Part D adds prescription drug coverage to Original Medicare, Medicare Cost Plans, some Medicare Private-Fee-for-Service Plans, and Medicare Medical Savings Account Plans.

Selling Your Home

Selling Assets

Having private funds to cover the cost of senior living can provide significant support when making decisions about the future. In addition to personal savings, investments, retirement accounts, or inheritances, selling your home can be another option to finance your move to a senior living community. Exploring this avenue can help generate additional funds and simplify the transition process.

If you’re considering selling your house to facilitate your move to a senior living community, there are resources available to assist you.

Paragon Home Resources is an organization that specializes in supporting individuals during the management or sale of their homes, as well as providing assistance with buying a new home and coordinating the sorting and distribution of belongings. 

They offer a range of helpful services designed to streamline the process and ease the burden associated with moving. Whether you need guidance on preparing your home for sale, assistance with paperwork, or professional support throughout the transition, Paragon Home Resources can provide the necessary expertise.

senior-couple-with-keys

Consult With A Licensed Professional

It’s important to note that the decision to sell your home should be approached with careful consideration, and seeking sound financial advice is crucial.

Consulting with a licensed professional can help you understand the tax implications, potential gains or losses, and transactional fees associated with selling your home.

They can provide guidance on optimizing your financial situation and estimating the net proceeds from the sale.

Additionally, creating a timeline that outlines major milestones and considering the services of a trusted real estate professional who specializes in working with seniors can further streamline the selling process.

Check out these 7 Tips for Seniors Selling Their Homes by Seniorly Resource Center >>

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