The fact is that most assisted living facilities are for-profit enterprises, and for the management, each occupant of the assisted living bed brings in money.
On the other hand, it becomes a huge liability and a cash drag if empty. The same applies when the bed is occupied with an older adult who can no longer afford to pay for the costs incurred in the senior assisted living community.
It is possible for many older living residents of the assisted living home to run out of money.
This could happen for a number of reasons and here is a couple of them:
1. The older adult’s extended longevity; the average duration of stay in an assisted living facility is 2.5 years but according to statistics, many live there significantly longer than expected. This leads to continuing rental costs, increased costs in senior health care services, etc.
2. Increase in the need for daily assistance; that is the assisted living resident requires more people to help with activities of daily living than before.
These are two major reasons why the older resident runs short of money. There are others, but these situations just mentioned place an immediate draw on private funds.
How to Get Into Assisted Living With No Money
Now, an older adult may not have enough savings or income to afford assisted living cost in the first place.
In this case, the responsibility of caring for the older adult inadvertently falls on the immediate family members.
Most often, the duty of care services rests on the shoulders of sons and daughters, who will need to juggle between caring for aging parents and their own younger kids, coupled with saving up for themselves and overseeing their own finances.
But what if you do have any close family who will step up to assume your care? In this case, the state’s Social Services department or an Area Agency on Aging may step in to try to find a solution.
The help may come in the form of home-care, meal delivery, daily check-ins by social workers, and occasional transportation to appointments and shopping.
Of course, this type of care does not come close to the skilled nursing care services delivered in most private, more expensive care environments. And for most elders who live alone in their home with the occasional visits from family and helpers, isolation and loneliness are just around the corner.
What we are saying is that the picture is dreary for the thousands of seniors who are neglected and uncared for when they need it the most.
However, you need to bounce back to life from despair, and you need to evaluate your options to make the next best move!
When the money runs out where should you turn for financial help?
We have outlined some strategies and support options that will help you fit quality care within a limited budget.
Seek Free Financial Advice to Afford Senior Living
Professional financial advice is always a good start. A financial advisor can take stock of your situation and recommend options based on personalized knowledge of your assets.
Choose from the following resources:
Resource Locator Tool
Here’s an online tool that helps families identify the right assistance program for them. The best thing is that it is free to use. It’s fast and easy to use as well. All you need to do is to fill out a form that asks you to produce relevant answers so that the provider can find the most suitable resource for you.
Resident Service Coordinators in Assisted Living communities
If you know someone who is a social worker in the assisted living community you desire to live in, ask for their help with evaluating your financial options. Sometimes, communities offer different levels of care options for seniors and the staff can help you determine which choice is best for your loved one.
State Social Service Agencies
You can take the help of State Social Service Agencies for identifying your financial assistance options. These agencies are local resource centers that can help you identify assistance programs older adults are eligible for.
Senior Care Bridge Loan
This is more of an immediate, but a short-term solution. The “Elderlife Line of Credit” is a unique loan system that allows multiple family members or friends (up to 6 co-contributors) to share the cost of paying for eldercare.
After the initial setup is done, payments are made from the account directly to the assisted living residence or to the care providers to cover nursing home costs.
Local Community Programs for Seniors
Many seniors can tap into their local community and reduce their costs by accessing a variety of local, community care services. These programs can provide assistance with ADLs, chore services, etc. And if you qualify, you can rely on Area Agencies on Aging, which is a government program that coordinates these services, usually free of cost or at a low rate.
State-Funded Assisted Living Program
Some states offer programs that provide financial assistance to help cover the cost of assisted living facilities, residential care, long-term care service, and the costs incurred from any other senior living community.
Consider a Different Location
Are you stuck in a city with little to no option for senior care funds? Consider senior care residences in the countryside or suburbs, which are noticeably cheaper than those in the city. We suggest that you go for an assisted living home that is affordable outside your zip code.
Planning for the Future
Here’s a tip to all our readers who are caregivers to an older adult:
It is a good idea for families to engage in some form of financial planning ahead of time to supplement the costs of parents’ or grandparents’ stay at an assisted living. In case your parents run out of funds, explore the possibility of getting Medicaid benefits, which can fill the gap without delay.
What Are Your Options to Pay for Assisted Living
How Does Reverse Mortgage Work?
It’s called a reverse mortgage because it works the opposite (in reverse) of a traditional mortgage payback stream. Unlike the traditional mortgage, monthly payments are not made to a lender; the lender makes payments to the borrower.
Reverse mortgages help seniors with limited income to receive monetary benefits that can help take care of a number of expenses.
This financial assistance can cover the assisted living expenses, pay off debts, cover other essential living expenses, or pay for the required health care services. There are no restrictions to using the proceeds from a reverse mortgage.
When the borrower dies, the heirs can repay the mortgage without selling the home, although this does amount to a hefty origination fee and costs. The fees and costs become part of the initial loan and accrue interest.
Life Insurance Conversion
You can use your life insurance policy as a source of income. Go through your insurance certificate document to find the type of policy you have. The document describes the options for converting your life insurance into income.
When the company loans you money against a life insurance policy, the lender expects repayment at the time of death. The insurance company may give you a tax-free loan.
Long-term Care Insurance
Long-term Care Insurance pays for services received in facilities like nursing homes and assisted living. The policy also pays for activities of daily living.
If you don’t have a long-term care insurance policy, an individual can make a lump-sum payment to buy one. The payment depends on the age and amount of the deposit before calculating a monthly benefit.
It requires an initial life insurance benefit that decreases over time. After five years, if you haven’t filed a claim for a monthly benefit, you can get the investment back.
Assisted Living Loans
If you have equity in your home, you can use that cash to pay for the retirement community entrance fees and senior housing costs.
If you or your spouse is a veteran (the individual must have been active at least 90 days where just 1 of those days was during a period of war) you are potentially eligible for a benefit to help them pay for assisted living.
This financial assistance is named the Aid and Attendance Benefit and is offered by the Veterans Administration.
It allows for Veterans and for the surviving spouse who needs assistance with chores like eating, bathing, dressing, undressing, taking medication, or needing help with toileting to obtain financial benefits.
Paying for Assisted Living with Medicaid
Thanks to recent federal and state government programs, a senior can qualify for financial help for Medicaid. It offers programs to help pay for assisted living. Each state has individual rules, regulations, and eligibility requirements.
In most cases, assisted living communities receive payment through private funds for housing, care, and services. But know that some assisted living communities reserve a few beds for people receiving Medicaid funds.
We hope that this article has provided you with information on how to get into an assisted living facility with scarce resources. Do let us know if you have any additional information to share with our readers!