How Do You Pay For Assisted Living - Can The Government Help?
Hello everyone!
If you are an avid reader of this magazine, you have read my last three articles on the different aspects of the senior living world. There is a lot to understand!
We’ve talked about assisted living, independent living, nursing homes, memory care, licensed communities, unlicensed communities. We’ve talked about quality of care verses quality of life. And I’ve talked about how we like the term “Living, with Assistance” at our Orion Oaks Assisted Living and Memory Care, where the idea is to “live your life” while you are getting the assistance you need.
Please write to us at dean@creativeseniorsolutions.com if you would like copies of those articles.
Today, I’m going to talk about how you pay for senior living, once you have figured out which kind of senior living you need. This is Part Two of a two-part Series.
How to Pay for Nursing Homes
Before we talk about how to pay for nursing home care, let’s talk about what nursing home care actually is. There are two primary types of nursing home care. First is “Rehab,” or Rehabilitiation. the second is called long-term care.
Rehab – What most people don’t know, is that when your doctor says you need “Rehab” on your knee, hip, or you are recovering from some surgery, that you actually get that “rehab” in a nursing home! There are some specialty nursing homes, which call themselves “Rehab Centers,” but, in fact, they really are nursing homes. However, most Rehabs are just plain old nursing homes, with two people in a room, not so great food, and are an institutional setting. Some are great, and some, not so great.
How is this paid for? Rehab is paid for by your Medicare (not Medicaid) benefit.
Medicare pays for your “Rehab” 100% up to 20 days, and then 80 percent up to 100 days. However, you generally won’t make it that long. Most people now use a Medicare PPO or HMO. Most HMO’s and PPO’s will provide you with an average of 13 days of Rehab. The rule is this: “you only get the benefits when you are making progress in Rehab.” When you stop making progress, they stop the benefits.
Long-Term Care – This is when you need 24 hour personal and nursing care, as much or even more than an assisted living community. Again, here are the facts:
For the most part, if you have the funds and can pay private pay, and need a lot of personal care, you will choose an assisted living community, as they have private rooms, better food, and are more residential in nature.
However, If you run out of funds, and need that 24-hour care, you may need to go into a nursing home. Medicaid pays for this – for life. They pay 100% (you have to provide your social security, minus $40.00). However, you will share a room with someone, the food is well, #$@%, and there may be up to 15 persons per resident aide. To be eligible for Medicaid, you can keep your house and a car, but otherwise have to have less than $2,000.00 of assets, and an income under $2,742.00 per month. There are a lot of rules and regulations about this! There are many websites about this, but check out https://www.seniorplanning.org/.
As I have mentioned in previous articles,
Let’s talk about one more thing – your home. Let’s face it, for many people, their primary asset is their home. If you bought your home years ago and have paid off the mortgage, then you may have accumulated anywhere from $100,000 to a million dollars or more. The average person at age 80 has approximately $250,000 of equity in their home.
Many people, if they need personal care and don’t want to have to go to a nursing home, and choose assisted living instead, use a combination of their social security income and proceeds from their home to pay for assisted living. For example, lets say it will cost you 5,000 a month to live in an assisted living you would like. And perhaps you have $250,000 in the bank from the sale of your home. If your social security and other income is $2,000 per month, you will need another $3,000 more per month to cover the monthly assisted living cost. With $250,000 in the bank, you would have over seven years worth of payments to cover your assisted living bill.
I know it’s a lot. If you have any questions, feel free to write me at the email below. I hope you enjoy the holiday season. Keep living, learning and loving!
Dean Solden
The Senior Living Guy
Dean Solden is the CEO of Creative Senior Solutions (CSS), a management and development company specializing in managing senior living communities for the last thirty years. CSS manages Orion Oaks Assisted Living and Memory Care in Lake Orion, Michigan. (www.orionoakassistedliving.com). Call Krystal at (248) 688-7464. You can reach Dean at (734) 260-3600 or dean@creativeseniorsolutions.com.