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Navigating the financial aspects of senior living

The time has come that you, or a loved one, needs assistance — here’s how to make sure you can afford it

Anyone who’s ever bought a car, or a house, or paid for college tuition, knows it can be a nerve-wracking process. Salespeople tout the benefits of their offerings while that one question burns in your mind demanding to be answered. Sure, the car’s shiny and fast, yes the house is spacious and comfortable, and of course the college is top-of-the-line, but the unrelenting question that dominates your attention just won’t let up. What the buyer always needs an answer to is: Can I afford this?

In some circles of polite society, it’s considered impolite to broach the subject of money, but when it comes to the momentous financial decisions in our lives, it’s best confronted head on. 

If you’ve come to the decision that your loved one has reached a point in life where they need help with the day-to-day aspects of daily life, you’ve already completed what so many consider the most emotionally taxing step in the process. As for the financial aspect of shifting from an independent living environment to the next level of care, it can be complicated, but that’s where we come into play. 

Living at a resort-style all-inclusive assisted living or memory care community is like being on permanent vacation. Our communities provide full housekeeping services, meals, transportation, and entertainment. Because these things are included in your monthly rent, and without the recurring costs associated with owning and maintaining your own home, you will find that senior living just might be more affordable than you may have originally thought, but you need to make sure.

“Finances, how am I going to be able to pay for this — that’s always our residents’ first concern,” said Placement Specialist Sarah Ingram, of Best Life for Seniors. 

Our goal is to provide you with a framework and the tools to help you navigate the financial aspect of your journey.

When your loved one reaches that point in life where they need the support provided in an assisted living community, or the help administered in a memory care community, the costs associated can be significant. On average the fees are roughly $3,000-$5,000 monthly for assisted living and memory care services in the U.S., according to SeniorLiving.org. 

Unfortunately, that figure can induce a kind of “sticker shock,” which can deter people from seeking the care that would improve their overall quality of life, health, and safety. 

But it doesn’t have to be that way. 

There is help available — although many don’t realize it exists. 

FUNDING BREAKDOWN

Paying for full-time senior care services can be broken down into two general categories: Private Pay and Assisted Pay. 

PRIVATE PAY

Of the two methods, private pay is the most straightforward. Simply put: the resident, or the resident’s friends or family, pays their monthly fees in full out of pocket. 

Those with the means to do so foot the bill themselves without outside assistance. At some communities and in certain states, private pay is the only method available. 

ASSISTED PAY

When a prospective new resident begins the process of inquiry into our community, one of the first things we ask about is their, or their spouse’s, military background. 

“We ask them whether they, or their spouse, was in the service because so many of our residents did serve this nation in the World War II and Vietnam eras,” Hollie Black, of Best Life for Seniors said. 

Aid & Attendance Benefits

Veterans, and their spouses, who served during specific time periods are entitled to government benefits designated to help pay for the cost of assisted living and memory care services. And the benefits can be significant — up to $3,253 per month, tax-free, for veterans and their families. 

The requirements do vary somewhat depending on when the veteran served, but the following are included: 

Minimum Service

Ninety days during a period of war as outlined by the United States Department of Veterans Affairs

Wartime Service Dates

World War I: April 6, 1917-Nov. 11, 1918 

World War II: Dec. 7, 1941-Dec. 31, 1946 

Korean War: June 27, 1950-Jan. 31, 1955 

Vietnam War: Aug. 5, 1964-May 7, 1975 

Persian Gulf: Aug. 2, 1990-Dec. 31, 2026 

That does not mean that the veteran is required to have served in combat, if someone was stationed in Kansas, but not Korea, in 1952, that would still count. 

Those who served during the Persian Gulf era are required to have twenty-four months of service, or a “full tour.” 

Age / Status 

To be eligible for Veteran-Directed Care, veterans must be 65 years old or be designated “unemployable” (Veterans designated unemployable tend to be receiving Social Security disability already.)

Discharge Status

Honorable or medical discharge

Unfortunately, it can be difficult for some to access their veteran’s benefits. In fact, many of those who try to navigate themselves but don’t hear back from the VA or are denied coverage are people with a discharge issue. It is possible to petition the VA for a change of discharge status. 

Additionally, the VA doesn’t ask leading questions or provide many answers. Few describe the system as “user-friendly.” 

Maybe you, or your loved one, has encountered a VA-related roadblock. Maybe you haven’t yet begun the process, but you are aware that it can be time-consuming and difficult. 

For those seeking assistance navigating the VA’s system of benefits, we recommend working with our partners at Patriot Angels — because having experts on your side can make all the difference. 

Patriot Angels

Patriot Angels is a Tennessee-based non-profit that specializes in helping veterans navigate the VA system to receive the benefits they have earned through their service.

“We help veterans, spouses and their widows supplement the cost for senior living. Our first goal is to educate families,” said Patriot Angels Special Project Manager Erin Walker. “About eight of ten veterans and their spouses don’t know these benefits exist.” 

The United States Department of Veterans Affairs doesn’t advertise the benefits, and it doesn’t make the process easy. 

“We just don’t want someone to automatically rule themselves out,” Walker said. “Do not rule someone out based on information you’ve heard in the past – that’s why we’re here – to help you answer these questions.” 

Patriot Angels asks that veterans send them whatever discharge documents you have in order to help them identify service dates and discharge status. They’re also looking for key dates to establish eligibility for benefits. 

One of the main reasons that it’s important that veterans, and their spouses, go to Patriot Angels early in the process is to avoid financial missteps like missing out on funds that can pay for care. Their mission to help make sure you remain financially secure. And it’s important to note that there is absolutely no need to spend down all of your money before making that call to Patriot Angels. 

“Veterans usually come to us when they’re getting moved in and they need extra money each month to help pay for the care they need — it expedites the process when the veteran is already living in the community,” Walker said. “Our goal is to be able to assist families. We can usually do it in about thirty to forty-five days. The VA side of the process usually takes about one-hundred-and-twenty days, but the VA will reimburse veterans for expenses incurred during that wait time after the process has officially begun.”

Patriot Angels has provided invaluable help to many of our residents, and they’re able to help people access their benefits quickly. 

“Most of the people we work with are eligible for Aid and Attendance benefits,” Ingram said. “Working with Patriot Angels makes the process so much quicker than going straight through the VA without any additional support.”

For more information, call the Patriot Angels (844) 757-3047, or go to their website at patriotangels.com.

Medicaid / Special Assistance

For many, the answer to “How can I afford this,” comes through the help of the Medicaid/SA assistance program. 

A major requirement for Medicaid/SA eligibility is demonstrated financial need. You have to make sure that your income is below a certain level and that you have less than $2,000 in the bank and no assets. 

Pre-planning is vitally important because all assets must be out of the resident’s name five years before they become eligible for Medicaid/SA. It’s important to be prepared because medical emergencies cannot be predicted. Vehicles, homes, real estate, all of it must be divested five years before you become eligible for Medicaid.

For many the option is a spend down, but there are requirements in place for that process. Money spent on the senior’s care, whether it’s a burial plot, gift certificates for hair dressing, and paying for medical care are all acceptable choices when it comes to spending down one’s assets. 

Another thing to bear in mind when addressing the financial requirements of assisted living and memory care services is that there are a variety of price points available, depending on your preferred options. Whether it’s a deluxe single suite, a studio-style apartment, or the companionship that comes from sharing a semi-private room with a roommate, there is an option to fit every need — and every budget. 

Personal care services are a requirement for Medicaid SA residents. For assisted living residents they can receive up to 80 hours per month. For memory care they can receive up to 130.  Residents are required to have a doctor complete an “FL2” form, which specify the services and assistance they require. These types of assistance include: bathing, dressing, feeding, toileting. 

One problematic issue is that Medicaid’s monthly income limits have not been raised or adjusted for inflation for the last 20 years, while social security has had annual increases. For North Carolina the income limit for Medicaid to help fund assisted living is $1,248 per month. For memory care it’s $1,581 per month. For those who are living solely on Social Security, those numbers are usually manageable, but many people have additional income from pensions and other sources which can quickly push their monthly income totals above their state’s limits. 

There are also eligibility requirements to consider. For example, people who move to North Carolina in order to move into senior living must live here for a minimum of six-plus months or have established a permanent residence for sixty days before they become eligible for Medicaid assistance. 

When you apply for Medicaid, the state of North Carolina will initiate what’s called a 60-month Medicaid Look-Back Period. What this means is that the state will examine all your asset transfers for the past five years to ensure no assets were sold or given away for less than fair market value. This includes asset transfers made by one’s spouse. If the state determines that the look back rule has been violated it’s assumed that that was done to meet Medicaid’s asset limit, and a penalty period of Medicaid ineligibility will be calculated. 

An online spend down calculator can help you determine exactly how much of your assets must be spent down to be eligible for Medicaid long term care. It’s available here: medicaidplanningassistance.org/medicaid-spend-down-calculator. 

North Carolina’s special assistance eligibility requirements are listed online at policies.ncdhhs.gov/divisional/aging-and-adult/special-assistance/documents/sa3100-1.pdf

A lawyer specializing in elder law can help you navigate the process.

Alternative Assets

When the time comes to work out how to pay for long-term care, it’s important to explore all options. Sometimes there are methods of generating funds that work well for people but can be overlooked. 

Life Insurance

Some people have life insurance policies that can be sold, converted or liquidated through a viatical settlement wherein “a person with a terminal illness sells their life insurance policy to a third party for less than its mature value in order to benefit from the proceeds while alive.” 

Alternatives to selling your home

For others it makes more financial sense to take out a reverse mortgage or to open a home equity line of credit. Others find that renting out their home provides the income needed to fund their care.

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