How to Pay for Senior Living: Medicare, Medicaid, Insurance and Veterans Benefits

The single most common surprise in a family’s first week of research is that Medicare does not pay for assisted living, memory care or long-term stays in a nursing home. It pays for medical care. Housing and personal care are, for most families, a private expense. Here is what actually pays, roughly in the order worth checking.

1. Private funds

Savings, pensions, Social Security and the sale or rental of a home pay for most senior living in the United States. If a home is involved, talk to an elder law attorney or a financial adviser before selling, because the timing can affect Medicaid eligibility later.

2. Long-term care insurance

If your parent bought a policy, find it now. Most cover assisted living and memory care after an elimination period of 30 to 90 days, and pay a daily benefit for a set number of years. Claims take time, so start the paperwork before the move.

3. Veterans benefits

The Aid and Attendance pension can add a substantial monthly amount for a wartime veteran or surviving spouse who needs help with daily activities. The application is slow and the rules are specific. Veterans service organisations help with it free of charge.

4. Medicaid

Medicaid pays for nursing home care for people who meet its income and asset limits, and in many states it pays for assisted living or memory care through a home and community-based services waiver. Not every community accepts Medicaid, and those that do may limit the number of Medicaid beds. Ask on the first call, not the last.

5. Medicare, for what it covers

Medicare pays for up to 100 days in a skilled nursing facility after a qualifying hospital stay of at least three nights, with full coverage for the first 20 days. That is rehabilitation, not residence. It also covers hospice and some home health care.

6. Other sources

• A life insurance policy can sometimes be converted into a long-term care benefit.
• Reverse mortgages work only if one spouse stays in the home.
• Some non-profit and faith-based communities have benevolence funds for residents who outlive their savings. Ask whether one exists and how it is decided.

What to ask every community

What is included in the base rate, what is charged on top, how often rates rise and by how much, and what happens if a resident runs out of money. The answers to the last question vary more than families expect.