Often, seniors and their families may not be prepared for a sudden move to a nursing home or an assisted living facility and financially may be at a loss at what to do. It is not a secret that senior living, especially covering long-term care services such as activities of daily living can be costly and quickly deplete seniors and their family’s finances. Consider these helpful tips for paying for senior housing and care.
Government Assistance: Medicare, Medicaid, and VA Benefits
Finding help through government assistance can be a complex process and it is a good idea to reach out to experts about qualifying for help with any program.
- It is important to remember that Medicare will only cover short-term care at a nursing home or skilled care facility after a hospitalization, surgery, or something similar.
- Medicaid is a state and federal funded government program: Low-income seniors who cannot afford long-term care privately can receive assistance to fund housing, services, and other care needs (however, there can be gaps in this coverage as well).
- Veterans who served during wartime for the U.S. military and are 65 years and older may qualify for assistance through the Veterans Association. Spouses, surviving spouses, and other dependents may be eligible, too. It is best to reach out to your local Veterans Benefits Office or the VA’s Health Benefits Service Center to determine eligibility. There are three different levels of help including a basic pension for low-income healthy seniors, housebound benefits for seniors that need assistance on a regular basis, and aid and attendance where care is needed daily. There is also a standard veterans benefits package (provided that the services are in your located area) that will cover:
- Skilled Home Health Care
- Respite Care
- Adult Day Health Care
- Geriatric Evaluations for assessments and creating a plan of care.
Long-Term Care Insurance
Long-term care insurance can be something that seniors and their families can use as a way of preparing for the future. There are many things to consider such as your current age and health (policies might not cost as much if purchased when younger and without any serious medical conditions), your ability to pay premiums, your income, any savings or pensions, and the proximity of family members (seniors and families who live far away from each other might find comfort in long-term care insurance when they are not around to be able to help). If purchasing a long-term care insurance policy is not something that you can truly afford, it may not be the best option. Because there are many ways to purchase long-term care insurance, it is best to do thorough research and be sure to compare coverage policies with various insurance companies. Common covered services for long-term care policies include:
- Assisted Living, Nursing Home, and Home Care
- Adult Day Care Services
- Home Modifications
- Care Coordinator Services
Seniors over the age of 62 can use reverse mortgages, a type of loan that allows them to incur cash for the value of their home. So, instead of paying a monthly mortgage fee, a lender such as a bank would be paying the homeowner for the value of their home. The loan is expected to be paid back after selling the house, passing away, or moving out. This type of financial option is best for those who desire in paying for in home care services and home modifications. Married couples may choose to use this to help pay for one spouse’s room and care in senior living if the healthy spouse continues to live in the home. There are both advantages and disadvantages of using a reverse mortgage to help pay for senior care and housing. Types of reverse mortgages include:
- Single-Purpose Reverse Mortgage– The least expensive of the three types of mortgages. There must be a specific stated purpose for the loan offered by local, state, and non-profit agencies.
- Home Equity Conversion Mortgage– This is the most common type of loan used by seniors as it is federally insured by the U.S. Department of Housing and Urban Development and can be used for any purpose of the homeowner. There are high up-front costs and a counseling session must occur to ensure the homeowners understand the costs as well as the pros and cons.
- Proprietary Reverse Mortgage– This is an option for homes that have high-value appraisals (homes that are worth a lot and the homeowners still owe a decent amount on the home). Seniors can receive a large sum of cash up front as this type of loan is typically through a private lender.
Life Insurance Policy Conversions
Seniors and their families can consider trading in a life insurance policy through a third-party lender that offers a lump sum of cash for a current policy based off the life expectancy of the policy owner and the value of the policy between its current value and estimated net death value. At the policy owner’s death, the lender would receive the full death benefit. There are usually no upfront fees, repayment requirements, and the funds may be used at the senior’s discretion.
Can you think of additional ways to help for senior housing and care? This question is worth exploring and planning for your loved ones and their future. Please reach out to Senior Living Link for help with finding the right fit for senior living.
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