Many people don’t think about the cost of long-term care until it’s needed. And the cost of a senior living community can be shocking.
According to Genworth’s Cost of Care Survey, the average monthly cost of an assisted living community is $5,350. This cost will vary depending on where you live, the type of room chosen, and the amount of care needed.
Determining how to pay for senior living costs can be overwhelming for seniors and their families, especially when it comes to insurance options.
Understanding what insurance covers, the available options, and how to choose the best plan is essential to making the best financial decision for your family.
In this blog, we’ll explore the different insurance options available for senior living, including coverage for assisted living, memory care, and long-term care, and how to choose the best plan for yourself or a loved one.
Long-Term Care Insurance
If you currently have a long-term care insurance policy, you’re in luck! According to LongTermCare.gov, people turning 65 have an almost 70% chance of needing some type of long-term care services and support in their remaining years.
Long-term care insurance policies are specifically designed to cover the costs associated with long-term care services, such as assisted living, memory care, and skilled nursing.
These policies may cover the following expenses:
- Assistance with activities of daily living (ADLs), such as bathing, dressing, toileting, grooming, and eating.
- Skilled nursing care
- Laundry and housekeeping
Long-term care insurance policies vary and can sometimes be difficult to understand, so it’s crucial to speak with your insurance advisor to ensure you know and understand your policy. You can also speak to an advisor at Allegro Senior Living, who can help walk you through your options covered by long-term care insurance.
Private Health Insurance
Although most private health insurance will not cover senior living, health insurance may cover some of the medical costs needed while in a senior living community.
Life Insurance Policies
Many people only think of life insurance for death benefits. However, life insurance policies are a financially savvy way to cover senior living costs.
A life insurance policy can be cashed in as a lump sum to pay for senior living communities. You can cash in the entire policy or keep some of the death benefits. The option for life settlements, or selling your policy to a broker, can also help fund senior living.
Before deciding to cash in on a life insurance policy, it’s important to consult with an insurance professional or financial advisor to carefully consider the advantages and disadvantages.
Medicare
Medicare is a federal health insurance program primarily for individuals 65 and older that pays for healthcare services such as routine doctor visits, preventative care, and hospital stays.
Many seniors and families are surprised that Medicare doesn’t cover the cost of long-term care in assisted living, independent, or memory care communities.
Medicare does not cover costs associated with activities of daily living (ADLs), such as bathing, dressing, or grooming in assisted living. However, Medicare can pay for short-term medical services such as physical therapy in an assisted living community.
Although Medicare will not pay rent or other living costs in a memory care community, Medicare may pay to cover specific medical treatments related to Alzheimer’s disease or dementia.
Medicaid
Medicaid is a joint federal and state health insurance program designed to help qualifying low-income individuals pay for medical expenses.
Medicaid does not typically cover rent in assisted living or memory care. However, some states offer Medicaid waivers to help cover some of these costs.
The Medicaid application process and eligibility rules can be challenging, vary from state to state, and not all assisted living and memory care communities accept Medicaid.
Feel Confident Knowing You Have Options
Navigating insurance options can be overwhelming, but it’s essential to understand your choices to make an informed decision. Long-term care, private health, life insurance, Medicare, and Medicaid can all help cover senior living expenses.
It’s important to speak with your financial advisor and insurance professional to ensure you make the best use of these resources for yourself or a loved one.
If you have questions or concerns about paying for senior living expenses, an Allegro advisor can help!
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