Once caregiving family members find the task of taking care of their loved one too difficult to handle by themselves, they may want to explore the option of placing their loved one in assisted living or hiring a senior care professional. Unfortunately, many caregivers are deterred from these options because of perceptions of these options as unaffordable. Assisted living facilities cost an average of $3,500 a month in California, while the average hourly rate of a caregiving professional is $20-25 dollars an hour. Fortunately, there are plenty of ways to finance assisted living for your loved one.
- Long-term care insurance: depending on the policy, long term care insurance covers home health care, assisted living, and nursing homes. Prospective buyers should get integrated home care policy to cover licensed and unlicensed facilities as well as home care. Depending on the policy benefits can range from $1,500 to $9,500 monthly. Medicaid can fill in remaining coverage gaps .Restrictions: most policies won’t cover assisted living unless holder is unable to perform two or more ADLs.
- Medicaid: covers only a specific duration (90 days or less). The program coverage is needs based, meaning it takes into account the patient’s financial condition
- Medicare A: covers first 100 days of nursing home after release from hospitalization. First 20 days are covered at 80% of the costs, although the coverage rate drops afterwards. For those who subscribe to a Medicare Supplemental plan, the secondary insurance will pay the remaining 20% of the cost for the last eighty days of coverage
- Veteran’s benefits: beneficiaries will need military discharge papers, a valid medical condition (with a doctor’s note), and certain minimum financial asset conditions. When these conditions are met, the senior can file a formal application, called the Veteran’s Application for Compensation and/or Pension. Note: one cannot receive benefits from both the Veterans program and a state aid program.
- Reverse mortgage: A reverse mortgage is a loan in which the borrower receives a monetary sum based on the value of the home. To qualify for a reverse mortgage loan, the homeowners must be at least 62 years of age and they must continue to live in the home against which the mortgage is taken. Although they cannot live in a nursing home or assisted living facility for the duration of the loan, if they are married and their spouse continues to live at home, then the spouse can use the proceeds to pay for their partner who is receiving care.
- Bridge loan: interest only loans that pay for assisted living while the house is on sale.
- Housing Subsidies: Seniors making $12,000 or less annually may qualify for U.S. Department of Housing and Urban Development 202 and Section 8 senior housing, which provides rent subsidies for both independent living and assisted living.
- IHSS Program: A California program for seniors age 65 and older that assists with caregiver costs.
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