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  • Hazel Bridges from Aging Wellness

Nursing Homes and Assisted Living: How to Pay for Institutional Care


As people live longer, an increasing number of seniors are relying on paid care for support during their later years. Seniors who fail to plan for the costs of assisted living or nursing home care may be surprised to discover that Medicare benefits don't extend to long-term care services. As a result, seniors must find other ways to pay for long-term care. Average Costs of Nursing Home or Assisted Living Care Paying for long-term care is a big financial burden, especially for seniors who require skilled nursing care. The average cost for nursing home care can be four times higher than that of community-based care. According to numbers provided by Genworth about the average cost of long-term care, a private room in a nursing home in New Jersey, the most expensive option, averages $142,350 per year. A semi-private room averages $127,750 a year. Not all seniors require the 24/7 skilled care that nursing homes provide. Those seniors will be relieved to learn that assisted living is a little bit cheaper, at an average annual cost of $72,780. Assisted living facilities help with the activities of daily living and make it easier for seniors to access needed medical services. The most budget-friendly option is home health care, with the average cost of a home health aide and homemaker services both averaging $54,912 annually. Ways to Make Long-Term Care More Affordable It's possible to get quality care at prices below the national average. Seniors and loved ones who want to reduce the costs of assisted living or nursing home care should heed these tips:

  • Share a room. Shared living is usually more cost-effective than living alone.

  • Compare pricing options. Seniors with limited care needs may be able to save money with a la carte pricing, whereas inclusive pricing may be more affordable for individuals with high care needs.

  • Consider relocation. The price of care varies by region, with the lowest prices found in areas with low costs of living.

​If institutional care isn't necessary, consider community-based care instead. In most cases, home health care and adult day care are more affordable than nursing or assisted living facilities. Avoid relying on unpaid care from family. Unpaid family caregivers lose an average of $303,880 in income and benefits, and that's not a financial hit many families can bear.

How to Pay Nursing Home or Assisted Living Costs Due to the high prices of long-term care, funding care through Social Security or pension income isn’t an option for many seniors. These are some of the other ways seniors can pay for needed care. Medicare Medicare covers short-term rehabilitative stays in nursing homes. It does not, however, cover long-term residence in a nursing home or assisted living facility. Medicaid Medicaid funds long-term care services for qualifying patients. Using Medicaid benefits to pay for care is the best choice for low-income seniors, but asset and income limits are low. Seniors who don't qualify for Medicaid but can't afford long-term care should consider whether spending down for Medicaid is a wise choice. Long-Term Care Insurance Long-term care insurance will pay for long-term care services, but which services are covered varies by policy. Monthly premiums for long-term care insurance are high; individuals should buy when they're younger and in good health for the best prices. Seniors can learn more about long-term care insurance at AARP. Personal Assets Seniors who save enough can pay for long-term care out of retirement and investment accounts, health savings accounts, personal savings and monthly income. However, using those funds to buy a long-term care insurance policy may offer savings over paying out-of-pocket. If savings and investments are insufficient, seniors should seek other assets to convert to cash. For most, that means selling a home, applying for a reverse mortgage on a home, or selling a life insurance policy for a cash payout. Consider Home Health Care Based on the previously cited figures, home health care still remains to be the cheapest option when it comes to long-term care. Not only is the price significantly lower, but seniors can greatly benefit. According to HomeAdvisor, “Home health aides, and their close cousins personal aides and home care aides, offer a variety of services designed to make it easier for seniors to take care of themselves and their homes.” There are many services seniors can take advantage of to help with activities of daily living such as bathing, dressing, grooming, grocery shopping/meal prep, household chores, and transportation. By choosing home health care, seniors can maintain their independence while also receiving the care and assistance they need from the comfort of home. Individuals who plan ahead for long-term care will be in the best position when their health declines in old age. Unfortunately, 73 percent of Americans haven’t made any plans regarding long-term care expenses. If you’re one of them, don’t waste any more time before getting serious about your future. About the Author Hazel Bridges is the creator of AgingWellness.org, a website that aims to provide health and wellness resources for aging seniors. She’s a breast cancer survivor. She challenges herself to live life to the fullest and inspire others to do so as well.

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