Using Home Equity To Pay For Assisted Living
If your loved one owns a home or other property, they may be able to cover assisted living costs with home equity. Some ways to leverage homeownership to pay for assisted living include:
- Bridge loans. This short-term loan is ideal for urgent situations and can help homeowners gain cash flow quickly. Bridge loans can be used to pay for assisted living while youre liquidating assets or waiting for the home to sell. However, someone must be able to make payments on the loan until the house is sold.
- Reverse mortgage. This option allows a spouse or adult children to remain in the home. Reverse mortgages tap into home equity, so the borrower can receive money either as a lump sum or as needed to supplement income. Unfortunately, many scams target seniors interested in reverse mortgages. Be sure to work with a reputable bank you and your loved one trust.
- Sell or rent your home. Selling a home can free up assets to pay for assisted living or other elder care. However, a spouse or relative may still live in the house or want to keep the property in the family. If the home is vacant, but you arent ready to sell, consider renting.
Best Ways To Pay For Nursing Homes With No Money
Medicaid is one of the most common ways to pay for a nursing home when you have no money available. Even if you have had too much money to qualify for Medicaid in the past, you may find that you are eligible for Medicaid nursing home care because the income limits are higher for this purpose. The specific income requirements will depend on your state. As it is a separate program, Medicare does not pay for long-term nursing home care, although in some cases, the insurance will cover a short-term stay in a nursing home.
Another option is to seek assistance from your states agency in the the National Association of Area Agencies on Aging. This government program helps seniors access the local financial assistance services available to them.
As with assisted living described above, long-term care insurance, life insurance, veterans benefits and reverse mortgages can also pay for nursing home care.
What Are Assisted Living Costs
The cost of residing in assisted living depends upon the facilities offered. Also, different aspects influence the price. These include the service requisites demanded by the residents, the residences size, and the facilitys location.
The services offered by a facility such as personal care, dining and food, classes, outings, housekeeping, and transportation also affect the cost.
Facilities offer an option to the residents to either pay for an all-inclusive service arrangement or on an ala carte basis.
As per the all-inclusive arrangement, residents need to pay a one-time fee for all the services offered, and as per the a la carte basis, the residents pay for the services they use.
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What Are Some Key Signs That It May Be Time For Assisted Living
The decision to help an aging adult move out of a current home is a complex one- both emotionally and practically. Above all, you want the person to be safe and well. Although every situation is different, the following signs are some key indicators that it may be time for a senior to transition to an ALF.
- Increasing difficulty managing the activities of daily living
- Recent accidents in the home or while driving
- Slower recovery times after an accident or illness
- Noticeable weight loss or increased frailty
- Changes in ones appearance, such as stained clothing or unkempt hair
- Loneliness due to lack of companionship
- Bills and loans going unpaid and mail from creditors going unopened
- Signs of dangerous driving
- Stale or expired foods in the pantry and refrigerator
- Broken appliances that your loved one used to use regularly
- Signs of lax housekeeping such as a dirty bathroom or lots of clutter around the home
Ultimately, no one other than the senior and those closest to them will know when its the right time to transition for assisted living. But if one or more of the above situations occur, its a sign that the person could benefit from the services provided in an ALF.
What Types Of Care Are Provided In Assisted Living
Since assisted living communities are not regulated nationally, there are some differences in the exact services and standards delivered from state-to-state and facility-to-facility. Some states, for example, require assisted living staff members to undergo more than 24 hours of training, while other states have zero training requirements.
Still, there are a number of standard services provided to residents at the vast majority of assisted living communities across the U.S. These include personal care services in the form of assistance with activities of daily living such as:
- Medication management
In addition to personal care, just about every assisted living community in the country offers the following services:
- Cleaning services
- Organized activities
While these services are included in a residents monthly payment at some communities, others will charge per service utilized, so its important to check with community staff about any additional fees.
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Veterans Programs For Assisted Living
There is financial assistance for assisted living for veterans in the form of a pension called the Aid and Attendance Benefit. As of 2021, this program can provide assistance up to $1,936 / month for a single veteran and up to $2,295 / month for a married veteran. However, eligibility is complicated and there can be extensive wait times for approval. Details of the program, eligibility requirements, and tips for expediting the approval process are available here. Veterans who may be eligible for both Medicaid and Aid and Attendance might want to review this comparison of the two programs.
A second option for veterans can be used in independent living communities, but not assisted living communities. The Veterans Directed Care program gives the participating veterans considerable control and latitude with how their care funds are spent. Under this program, personal care attendants can be paid to provide assistance to veterans residing in independent living. It is worth noting that the phrase independent living means different things in different states. Here we are referring to a senior living community that does not provide personal care supportive services, but may provide recreational activities and group meals.
Finding A Financial Professional
Navigating the details of paying for long-term care can be challenging. Some options can have implications for a persons taxes and any inheritance they want to leave to their heirs. It may be useful to speak with a financial professional when youre considering how to proceed. Helpful professionals may include:
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Find An Assisted Living Facility
There are more than 300 Maryland Assisted Living Facilities listed by the .
Responsible for licensing and regulation of all Assisted Living Programs.
Baltimore County Department of Aging Responsible for monitoring Assisted Living Facilities who participate in the Senior Assisted Living Group Home Subsidy Program.
The Ombudsman Program Investigates resident complaints in Assisted Living Facilities.
Home and Community-Based Waiver Program To report a problem involving residents receiving a HCBS Medicaid Waiver Subsidy.
Baltimore County Health Department Responsible for monitoring environmental conditions of Assisted Living Facilities.
Baltimore County Department of Social Services Responsible for investigating alleged abuse in Assisted Living Facilities.
How Much Does Assisted Living Cost
The cost of assisted living varies widely based on a variety of factors. Some of this depends on where you live, and some of it depends on the specific facility you choose. The other major factor that determines your cost is the level of care that you need. A resident who needs help bathing every day will have to pay more than one who doesnât require any special care, for instance.
The nationwide average for assisted living is $4,000/month, but the cost varies widely from state to state. Most states average between $3,000 and $4,000 per month, and few have average costs higher than $4,000. In the District of Columbia the average cost is $9,266 per month, which makes it the most expensive place in the United States for assisted living at the time of this writing. Missouri and Vermont are tied for the most affordable average cost of assisted living, at $2,844 per month.
Remember, though, that these are averages. Every state will have facilities that are much cheaper than the average cost, and much more expensive. Still, the vast majority of states have averages between $3,000 and $5,000 per month, and most facilities you look at will likely be in that range.
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Do I Qualify For Assisted Living
If cooking, cleaning, and managing your medication is overwhelming and tiring, assisted living may be for you. If you’re generally still active and can get around well on your own or with the assistance of a cane or walker, you may benefit from assisted living, where many daily tasks are taken care of. This frees up your time and energy to enjoy hobbies, spend time with friends and family, and volunteer if you’d like.
Some signs that you or your loved one may be ready for assisted living include:
- Loneliness and depression
- Increased risk of falling or have had multiple falls
Reverse Mortgages For Seniors
A reverse mortgage is a special type of home loan that lets a homeowner convert part of the ownership value in their home into cash without having to sell the home. Unlike a traditional home loan, no repayment is required until the borrower sells the home, no longer uses it as a main residence, or dies.
There are no income or medical requirements to get a reverse mortgage, but you must be age 62 or older. The loan amount is tax-free and can be used for any expense, including long-term care. However, if you have an existing mortgage or other debt against your home, you must use the funds to pay off those debts first.
If you are thinking about a reverse mortgage, talk to an expert. A reverse mortgage can be complicated, and other borrowing options may be available. These might include a home equity loan or refinancing an existing mortgage to lower the monthly payments. Like a reverse mortgage, these options can free up cash for covering long-term care expenses. Additional information about reverse mortgages and other borrowing options is available from the Consumer Financial Protection Bureau. Visit the Consumer Financial Protection Bureau website or call 855-411-2372.
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Help When You Need It
If your loved one needs long-term care, please do not hesitate to contact us for assistance, even if you do not live in the Tampa Bay area! We also offer free monthly seminars on Medicaid and asset protection planning. You may also want to read about the 7 lies your friends will tell you about Medicaid and elder law in Florida.
Other Ways To Pay For Assisted Living
For many Americans, assisted living fees are paid out-of-pocket using funds from a combination of resources. Follows is an examination of each possible source with links to more detailed information.
93% of assisted living residents are satisfied with their overall quality of life, their level of independence and the level of personal attention they receive from staff.
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Reverse Mortgages & Helocs
Reverse mortgages and home equity lines of credit are two options homeowners have for using their homes to help pay for assisted living. However, these options are not available to all homeowners unilaterally, nor are they necessarily appropriate for every family or a sound economic decision. To use a reverse mortgage, for example, the individual must be married and their spouse must continue to live in the home as reverse mortgage rules state that a home must be owner-occupied. Home equity lines of credits do not have this limitation. They also have lower associated costs and can be a good option for couples of mixed ages who would not be eligible for a reverse mortgage. Eligibility requirements and a detailed discussion of the pros and cons of each option is available at the following links: Reverse Mortgages & Home Equity Lines of Credit.
What Is Included In Social Security Assisted Living Benefits
Perhaps you or your family member is already receiving Social Security.
Assisted living options may also be at the forefront of your mind, but youre wondering if there are any Social Security assisted living benefits.
Beyond what weve already discussed SSDI and SSI you will be glad to know that there are a few more resource options available to you or your loved one.
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Payment Options In Assisted Living
What is the Cost of Assisted Living?
The cost of assisted living varies with each residence. It will depend on the size and location of the apartment and the amount of services needed by a specific resident. Monthly fees are based on rent, utilities, food, housekeeping, personal care and other optional services and amenities. Assisted living costs are generally less than those for a skilled nursing facility because nursing homes are required to provide intensive, 24-hour skilled nursing and related care. In Massachusetts, monthly fees range from approximately $2,000 to more than $7,000. Because special care units and programs for people with memory loss and/or dementia provide additional staffing and services, they are typically at the high end of the fee range.
Different residences charge for rent and services in different ways. For example, some residences charge a basic monthly fee that includes some personal care services, while others have service packages, and yet others charge separately for all services on an a la carte basis. There may be charges for items such as guest meals, room service, special recreational events, transportation, personal laundry, etc. Ask each residence under consideration for a full disclosure of costs, including how and when costs may be increased.
Paying for Assisted Living
Group Adult Foster Care
Massachusetts Executive Office of Health and Human Services reimburses an assisted living provider for the provision of personal care services and the administration of the program for MassHealth eligible residents at qualified GAFC assisted living residences. Approximately $1,200 per participant per month is reimbursed to the provider for personal care services, while the resident remains responsible for the rent. See the Supplemental Security Income section below regarding assistance with rent. To be eligible for the GAFC Program, the individual must meet both clinical as well as financial criteria. For more information on the GAFC program, please call the GAFC Program Manager at 617-727-7750 or visit www.mass.gov/elders.
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Bypassing The Assisted Living Wait List
The best way to by-pass the wait list to get Medicaid benefits for the ALF is through the 60 day wait period when an elder is already in a nursing home. If the elder is already in the nursing home, we often take advantage of this opportunity to apply for and receive Medicaid, then transition the elder to assisted living with Medicaid’s financial assistance. Once the elder receives Medicaid and has been in the nursing home 60 days, the applicant will be able to leave the nursing home and go home or to assisted living with Medicaid’s financial support. We have some good information on questions to ask when your elder enters the nursing home. Veteran’s benefits may also assist the elder and the surviving spouse of a war time veteran. This process is tricky but if your elder is ever receiving rehabilitation in a skilled nursing facility, now may be the time to get Medicaid for him or her.
Are Telehealth Services Covered By Insurance
Telehealth is a service that uses video calling and other technologies to help you see your doctor or other health care provider from home instead of at a doctors office or medical facility. Many insurance providers including Medicare, Medicaid, and many private insurers have started to cover telehealth services. However, coverage can vary by location and insurance plan. Check with your insurance company or health care provider’s billing department for the latest information about coverage for telehealth services.
Learn more about telehealth services and how to prepare.
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Paying For Senior Living With No Money
For many seniors, cost is the biggest obstacle to finding a good senior living residence. Prices for assisted living and nursing homes vary depending on a number of factors, but on average, seniors pay $2,000 to $5,000 per month. While those amounts are too high for some seniors to pay out of pocket, the good news is that financial assistance, insurance payments, veterans benefits and more resources are available. Paying for senior living with no money is doable when you know how to draw from the pool of resources in your state.
Developing A Financial Plan For Assisted Living
Since many families pay for assisted living from their savings, they are in a state of continuously diminishing resources. Most assistance programs determine eligibility based on an individuals resources. Therefore, the assistance available to an individual is constantly changing. In other words, the longer a person resides in assisted living, the more assistance options that become available to them.
For this reason , it is advantageous to develop a long term financial plan when considering assisted living. Doing so has the dual benefit of ensuring a comfortable and consistent aging process for your loved one while at the same time maximizing your familys assets and resources.
The creation of a financial plan for assisted living is a complicated process and one that must accommodate various health scenarios. Fortunately, there are a variety of different resources available to help families with financial planning for assisted living and each of the resources has its pros and cons.
Elderlaw Attorneys the most expensive and most thorough option are elderlaw attorneys. This type of attorney and their staff can provide a one-stop shop for assisted living financial planning, but their hourly rate may prove cost-prohibitive for some families. A shortcoming is an elderlaw attorney may not be knowledgeable about local assistance options for lower income families. One can search the National Academy of Elder Law Attorney database here.
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