Financial Planning – Part 2
Assisted Living: How exactly do we pay for it?
In the last post, we discussed different ways to pay for assisted living with options that may already be available to you, ranging from life insurance policies to paying with a savings account. But we know that people have different financial situations and none of the previous ways to pay for assisted living might be a reality. That said, we’ve highlighted different options that you and your loved ones can apply for to get help with paying for this significant transition.
Long-Term Care Insurance: We touched on this briefly when discussing the Life Insurance option but sometimes families can’t afford to lose their life insurance and must look for other ways to pay for their parents’ care. Long-Term Care Insurance is just that, insurance for the care of a parent. Each plan through each company is different so we can’t say exactly what is included in each option but there are some things you may want to be aware of as your researching.
- Sometimes Long-Term Care is “facility only” based, meaning that if you decide that you want in-home care then this insurance won’t cover it.
- To qualify your parent may need to help in two areas of their daily routine. This can include bathing, changing, eating or walking. If your parent does not fall under what is deemed as an area of need in their daily life, then you may not be able to take advantage of the policy.
- The benefits can vary widely. This means that you need to know what you want from the insurance and shop around. Get people on the phone and make them explain exactly what is included in the policy and make sure that it works best for you and your family.
Bridge Loan: Like we mentioned before, if there is a small window of time where you are waiting for a home to sell or for a settlement on your Life Insurance Policy, then a Bridge Loan, which is just a short-term loan, can help fill that gap so your loved one doesn’t have to wait to move into an assisted living facility. This is especially helpful if your parents’ need is a lot higher and you need to transition your parent(s) to an assisted living facility sooner rather than later.
Veterans Affairs: There are different programs through the VA that can benefit your parent even if they did not personally serve. If you, another child or the spouse of your parent was a veteran then they may be eligible for residential care. The programs offered by the VA are numerous and can get complicated quickly. They also do not pay for room and board, but will help with other services provided by the assisted living facility. Also, I will say, that if a parent seems or is deemed to have too many assets for the VA there is no penalty for re-allocating those assets. Also, take good notes when talking with anyone about VA benefits and make sure that you are crystal clear on what your parent will receive. This actually goes for our next option too.
Medicaid: Medicaid is federally-funded assistance to those with low income. If your parent is eligible then they can have their assistance paid. Each state runs its Medicaid program differently and benefits vary widely across the United States. Florida, with its large elderly population, has the Statewide Medicaid Managed Long-Term Care Program. This program allows for eligible seniors to meet with a Long-Term Care Manager and choose between different plans, finding the best one to fit you and the need. They also focus on making sure that your parent(s) is in the least restrictive environment while still meeting their needs. This is important especially if you don’t have the immediate need to place your parent(s) and want to make small transitions for them.
Each of these options, as well those from the previous post, need a lot of research, note-taking and shopping around. Meet with a financial advisor, call each company, ask questions and make sure that you and your family are on the same page. This list is just a starting point in helping you through this journey. It will be difficult enough putting your Mom or Dad outside of their comfort zone and there is no need for added stress when it comes to paying for quality care for the person you love and cherish.