Frequently Asked Questions on Payment Options for Senior Housing

Last updated on: Friday, 21 July 2023
  • What You'll Learn
  • Does Insurance Pay for an Assisted Living Facility?

    Generally speaking, regular insurance and Medicare will not cover your stay at an assisted living facility, so this type of care is usually paid for out of pocket by the individual and their family. Depending on the circumstances and location, Medicaid might pay for an assisted living facility. Since Medicaid is partly funded by the state of which the individual resides, there are different guidelines on how certain states allow the use of Medicaid. That being said some assisted living facilities do not accept Medicaid, so it is best to contact the facility directly to see if they accept insurance.

  • How Does Coverage for Long-Term Senior Care Differ Between Medicare and Medicaid?

    In terms of long-term senior care, one will usually not receive any coverage with a Medicare plan. Though some policies will cover short-term, or respite care, for individuals who need skilled nursing for a certain illness, longer stays are not covered. Medicaid on the other hand has what is called Institutional Medicaid. This covers certain individuals who need long-term care. Though this can be helpful, one’s options when receiving this type of care are very limited. When dealing with senior care specifically, assisted living does not fall into the umbrella of what is covered under Institutional Medicaid. So, in order to receive affordable care, many individuals give up their independence. This type of situation is common for those who are not completely dependent on others for help but need some assistance to improve their quality of life. An individual whose needs would be best cared for at an assisted living facility would need to forgo this option so they can receive affordable care under the coverage of Institutional Medicaid. That being said, some states are becoming more accommodating, and can issue Medicaid coverage for assisted living on a case by case basis. The reasoning for this comes down to cost. Assisted living cost roughly 50% less than a nursing home, so the state could save a substantial amount of money if it allows an individual to utilize assisted living facilities.

    To get the best understanding of your options you have to look into the Medicaid policies for your state because every state is different. If your state does not allow the use of assisted living substitutions, then it might be best to look into the home health care options Medicaid provides. Doing so could prevent a transition into a level of care that isn’t necessary, and ensure you stay as independent as possible.

  • How Much Does Assisted Living Cost?

    According to the Administration of Aging, the average cost of assisted living is $119 a day or $3,628 per month. That being said the price of each facility is different and price varies depending upon one’s location and the amenities of the facility. So, a place in Florida on the beach would be more expensive than a facility located in the middle of Tennessee. On top of this, there are different prices offered within a facility depending on the resident’s room and services provided. So, an individual who desires a two-bedroom living space and help with bathing would pay more than someone who lives in a studio apartment and does not require medical attention. To get the best idea of what they will be paying, an individual should decide what their needs are and where they want to live. By doing so, you can locate facilities that meet your needs and compare prices.

  • What Is Included in the Price of an Assisted Living Facility?

    Each center is different, so it is best practice to discuss with them what is included with the price of staying at their assisted living facility. First and foremost, your care and security are included in the price of most facilities. Access to help 24 hours a day is a main reason people transition to assisted living, so you can expect to get this wherever you end up going. Besides the obvious needs the deal with health and well-being, most facilities include the price of utilities in their cost to eliminate certain things that could be burden, like worrying about monthly bills. You can also expect to have a transportation service included. On top of this, facilities usually provide services to ensure your life is easier. Housekeeping, laundry services, and food preparation are usually provided. That being said, there may be an extra cost if you have a special diet or certain requests in regard to the services they provide. Lastly, you can expect to have social activities and events included in the price of your stay. The social dynamic is an important part of the assisted living experience, and a good facility will provide its residents with a wide array of things to remain active and social. The best practice is to ask questions and fully understand what it is your paying for, this will prevent any surprises from occurring once you’ve signed an agreement and started living there.

  • What Is Long-Term Care Insurance and How Does It Work?

    Long-Term Care Insurance exist that can help cover the cost of an assisted living facility. The problem with long-term care insurance is that you usually are not qualified to get it in when you need long term care. This type of insurance is something you purchase before long term care services are needed so if the situation arises you can get coverage. You can compare long-term care insurance to flood or fire insurance. If you experience a flood or fire you would only get coverage if you had the insurance before the incident. You cannot acquire it after the fact and get coverage for an event that already happened. Long-term care insurance can be expensive so most people refrain from paying into it on the chance they will one day need long-term care.

  • What Is the Difference Between Medicaid and Medicare?

    Medicare and Medicaid are both government programs aiming to provide assistance with health care needs, but there are many differences between the two. Medicare is a program that cover all people who are a certain age or who have certain health problems, while Medicaid is more of an assistance program that is only available to individuals in a certain income bracket. The easiest way to differentiate them is by looking at their names. Medicare helps care for those who are older or who have certain health issues, and Medicaid lends aid to individuals who do not have financial means to get health coverage. Now that you can tell the difference between the two, let’s examine some of the key differences between them.

    Medicare is a federal program, while Medicare is a state and federal program. What this means is that while the rules that govern Medicare are the same all over the country, the rules for Medicaid differ from state to state. Each state works with the federal government to establish its rules for Medicaid, so coverage varies depending on your location.

    Medicare plans still require the coverage holder to pay premiums. Premiums are the monthly cost of the health insurance plan, and while Medicare plans tend to be more affordable than similar plans that aren’t part of the Medicare program, individuals are still required to pay monthly. On the other hand, those who qualify for Medicaid are usually not required to pay monthly for coverage. Sometimes there are cost involved with Medicaid, but they are very minimal.

  • What's More Expensive Between Assisted Living or a Nursing Home?

    Generally speaking, assisted living facilities are far less expensive than a nursing home. In 2019, the national average for the monthly cost of an assisted living facility was around $4,000, while nursing homes ranged from $7500 – $8500 depending on the type of room that you have. The reason for this huge disparity is that nursing homes provide around the clock medical care and usually deal with individuals who need a level of care that assisted living facilities cannot provide.

  • Why Doesn't Insurance Cover the Cost of Assisted Living?

    The services offered at assisted living facilities fall under the umbrella of non-medical care. Though their services can drastically change an individual’s quality of life, an individual who goes to an assisted living center is still independent to some degree. Medication reminders, aid with activities of daily living (ADLs), and a healthy social environment assist the individual, but they could technically survive without these services. What this means is that insurance companies do not see the services as a medical necessity. Medical necessity is an important term when it comes to insurance coverage, and in the eyes of an insurance company assisted living are more of a luxury than a need. This is why most insurance policies will not cover assisted living.