5 Ways to Pay for Long-Term Care

Is living at home becoming too much of a hassle? There are a variety of reasons why many older adults need to transition to long-term care (such as assisted living or independent living), or why they might need to make the transition to senior living in the future. However, every person’s needs are different, and the cost varies depending on these needs.

So, how can you ensure you or your aging parent receive help without getting into a financial bind with long-term care expenses?

There are a variety of ways to pay for long-term senior care, five of which we will discuss in this blog. Remember that these suggestions may not work for everyone’s situation. To receive further guidance on which options are the best for you or your parent, make sure to speak with an elder care professional.

1. Long-term care insurance

According to the American Association for Long-term Care Insurance, 7.5 million Americans have some long-term care insurance in place. However, the Americans on the other side of the equation might be struggling to figure out how to pay for senior care services later on when they likely need them. Are you currently worried about this?

This is where long-term care insurance comes in. If you are able to, consider investing in this now. Long-term care insurance covers services that include assistance with ADLs, such as bathing or dressing. It also covers the cost of care for people with a chronic medical condition, disorder, or disability.

With long-term care insurance, you or your parent will be able to receive care at home, in a nursing home, in an assisted living community, or even an adult daycare center. Remember that it is important to contribute to long-term care insurance sooner rather than later.

You will most likely be denied long-term care insurance if you already have an existing condition. Also, remember that it is not possible to rely on Medicare in the instance that you or your parent need assisted living or independent living. Medicare only covers short nursing home stays or small amounts of home health care where seniors may need skilled nursing services or rehab.

2. Out-of-pocket

If there is no long-term care insurance in place, the next option might be to pay out-of-pocket. Of course, this may not be feasible for everyone; make sure to see what you or your parent can afford.

Some older adults might pay out-of-pocket with the use of their savings, a pension plan or retirement funds (such as a 401 (k)), funds they received from selling their home, or the income they received from stocks and bonds.

The cost of assisted living can be high, and it may not be realistic to pay for it entirely out-of-pocket. However, it is important to understand that you or your parent might be able to pay for home care or adult day care with personal funds. This could be a more affordable option if it is not reasonable to pay for assisted living or independent living at this time.

3. Veteran’s benefits

If you or your parent has served active military duty, or are a surviving spouse, know about VA benefits. These benefits include possible eligibility for assisted living, residential (live-in) care, or home health care with the help of the VA.

If you or your parent is sick or disabled, VA long-term care services cover things like: 24/7 nursing and medical care, help with ADLs, physical therapy, comfort care and assistance with managing pain, and even support for caregivers who need skilled help or a break from their caregiving duties.

Furthermore, care settings might include nursing homes, private homes, assisted living communities, adult day health centers, as well as the veteran’s own home. If you are interested in accessing benefits such as these, first make sure that you or your parent are signed up for VA health care. Contact your VA social worker or the U.S. Department of Veterans Affairs if you do not know where to start and need specific help. Also, make sure to ask about VA Aid and attendance.

4. Medicaid

Paying for Medicaid with long-term care can be tricky. Understand that not everyone can be eligible for this health insurance program; Medicaid is for low-income individuals of all ages. Therefore, you or your parent will need to be financially qualified.

There are many aspects to this. However, first understand that in the year 2020, a person age 65 or older must have an income of less than $2,349 a month. Also, certain requirements (especially when it comes to asset limits) vary state-to-state. Make sure to keep this in mind if you will be applying for Medicaid in the near future.

5. Reverse Mortgage

A reverse mortgage gives homeowners the ability to borrow money in a way that uses their home security for the loan. Also, this is created for individuals who are age 62 and older. If you are wondering why this might be a good option for you or your parent, there is an advantage: reverse mortgages do not require the borrower to make any regular payments.

The loan is only due after the borrower passes away, moves out, or sells the home. There are also three different types of reverse mortgages available which include home equity conversion mortgages (HECMs), proprietary reverse mortgages, and single-purpose reverse mortgages. While this might seem like a great option, converting your home equity into cash might not be what is best. Before you make a decision, make sure to speak with a financial advisor.

Do Your Research

Go through your own or your parent’s finances, see what long-term care benefits you or your parent may already have, and ask questions when you need to. Also, consider which long-term care costs are affordable. Seeking long-term care can be a scary experience, especially if you or your parent need it at the last minute. However, it is essential to be ready to pay for care; it makes for a worry-free transition along the way.Are you or your parent currently trying to make arrangements for long-term care? What has the experience been so far? After sharing in the comments, make sure to explore our website to learn about Royal Estates of El Paso.


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