Payment Options

Payment options for the different types of senior housing and care can be very complex. However, in general, Independent and Assisted Living facilities are primarily paid for with private funds. They do not take Medicaid. When seeking a senior living home for yourself or a loved one, it is highly recommended that you discuss your finances and options with a legal consultant and/or a financial advisor that specializes in senior concerns. The following is a summary of most of the various sources available:

Private Funds

Most people pay for independent living, assisted living, and Continuing Care Retirement Communities (CCRCs) out of their own pockets with private funds. There are some states which accept Medicaid for assisted living, but there is currently no program on the federal level, and private funds still account for approximately 90 percent of assisted living payments. About one-third of long-term care at nursing facilities is paid with private funds.

Senior Living Line of Credit

This payment option is especially helpful if families' and seniors' need time to sell a home or other assets with which to pay for care, or if a senior is waiting for federal benefits to start. Typically structured as a signature or personal line of credit, these lines of credit allow families to borrow only what is needed on a monthly basis to help finance their loved ones senior housing and care needs. Like any loan, a Senior Living Line of Credit is subject to credit approval. While accepted at many communities across the United States, not all communities may offer such an option.

Long-Term Care Insurance

Long-term care insurance covers the cost of long-term care in certain types of care facilities, depending upon the policy. Policies may cover stay in licensed nursing facilities and home health care. Long-term care policies are sold by private insurance companies (not all insurance firms offer this type), through agents, mail, and various organizations. An insurance company must be licensed in your state to sell long-term care insurance.

Premiums for Long-Term Care Insurance are based on the age of the person at the time of purchase, the benefit amount, the benefit time period, elimination or deductible, and special options (i.e. inflation adjustment, non-forfeiture benefits and spousal discounts).

Medicaid

Medicaid is a joint Federal-State program which pays for medical services to eligible needy and vulnerable families and individuals. The State must offer basic services in order to receive Federal matching funds, and the Medicaid program varies from State to State. Unlike the short-term program of Medicare, Medicaid will pay for long-term care needs, including senior housing needs, for qualifying individuals. Medicaid has strict income and asset eligibility requirements which can vary from State to State. There are some assets seniors are allowed to maintain without affecting their Medicaid eligibility, including a home and a vehicle. Another requirement for Medicaid coverage is U.S. citizenship. Some skilled nursing homes have eligibility requirements for admission before they will take Medicaid coverage. Check with each home that you may be interested in order to discuss their individual provisions.

Medicare

Medicare ("Health Insurance for the Aged and Disabled") is a Federal health insurance program for aged (65+) and certain disabled individuals. Many people mistakenly believe that Medicare, which is administered by the Health Care Financing Administration, covers the costs of most long-term care services. In reality, Medicare only covers short- term, acute care during a hospital stay. Medicare (Part A) may help to pay for nursing care only if a person meets all of the following conditions:

1. A person requires daily skilled nursing or skilled rehabilitation services that can only be received in a Skilled Nursing Home. This need must be certified by a doctor.
2. A person has been hospitalized for at least three days in a row (not including the day of discharge) prior to entering a Skilled Nursing Home.
3. A person enters the Skilled Nursing Home within a short time (usually 30 days) after leaving the hospital.
4. A person's care is for an illness that was treated in the hospital or arose when he or she was in a Skilled Nursing Home for an illness treated in a hospital.

Medicare (Part A) can help pay up to 100 days of skilled care in a Skilled Nursing Home during a benefit period. It pays for all covered services for the first 20 days. For days 21-100, a daily co-insurance amount can be charged to a Medicare recipient. If a person requires more than a 100 days in a benefit period, he or she is responsible for all charges beginning with the 101st day of continued residence at a Skilled Nursing Home.

More information on Medicaid and Medicare can be found at http://www.cms.gov

Veteran's Benefits - Aid and Attendance

If you are a United States veteran or surviving spouse of a veteran, you may qualify for the Aid & Attendance Program and receive monthly benefits to help cover the costs of your senior housing and care.

Aid & Attendance is a Federal benefit that was added onto a need-based pension offered through The Department of Veteran Affairs. It provides benefits for veterans and surviving spouses who need assistance with their activities of daily living and meet specific requirements. Aid and Attendance can help pay for care in the home, in a nursing home or in an assisted living community.