Helpful Ways to Pay for Assisted Living Costs

Health Care Worker and Elderly ManAssisted living rent can vary from $2,000 to $5,000 monthly. Depending on what type of care your loved one needs, assisted living can be the most affordable solution when compared to a nursing home ($5,000 to $10,000 or more per month) or long-term in-home care. If closely monitored medical supervision is not necessary for your aging senior, assisted living might be the best financial choice.

One payment strategy that has become popular is to use Medicaid.  If your loved one does not have many financial assets and their income levels are low, this could be the right solution for them. Medicaid varies from state to state both in name and in eligibility requirements. Many states dictate that a senior is eligible if he or she has less than $2,000 in assets, or $3,000 if married.

If you are trying to help a senior with a creative financial strategy by gifting money and other assets to family members, known as “Medicaid spend-down”, the government has a five-year look-back rule regarding financial transactions. There are strict guidelines about Medicaid spend-down. If a senior is caught incorrectly spending down resources to qualify for Medicaid, the penalties are steep, including disqualification from receiving Medicaid for a lengthy period. Also, many states do not cover assisted living under Medicaid, but require the submission of an additional wavier.   Be aware that Medicaid assisted living payments are only accepted by some communities and Medicaid beds are usually limited. There can be long waiting lists to enter into a Medicaid financed assisted living facility.

If your senior has a disability, he or she may qualify for Supplemental Security Income (SSI), which is a federally administered program. SSI is the government safety net for those destitute and wholly or partially disabled by illness or injury. SSI is a monthly payment which a senior can use to pay for assisted living. To qualify for SSI, contact the appropriate local Social Security office and provide financial documentation and a doctor certification to attest to your senior’s inability to work because of a medical disability.

If your loved one or their spouse is a Veteran, residential care could be paid for in a variety of situations with Veterans benefits. There is a set of benefits available to those with disabilities or service-related injuries, and there is also another set of benefits called Aid and Attendance, made available to any Veteran or surviving spouse who is both disabled and whose income is below a certain threshold. The Veterans Administration website outlines the complicated process to access benefits. It is extremely beneficial to work with an elder law attorney who knows the details of the programs and can assist with the application.

A life insurance policy can pay for your loved one’s assisted living. Often, seniors have a long-standing policy that was implemented to help family members upon their death, but a life insurance policy can provide financial support now. A process known as “accelerated” or “living” benefits is a “cash out” policy that can have your senior redeem 50 to 75 percent of the face value of the policy. Each amount is based on specific policy conditions as well as individual corporate rules. Some policies can only be cashed out if the policyholder is terminally ill while other companies are more flexible in cash outs. If your senior’s particular company does not allow the policy to be cashed, it can still be sold to a third-party company who usually affords the same 50 to 75 percent face value cash out. That company continues to pay the original premiums until their death, at which time the company redeems the full value of the policy. Finally, if your loved one’s policy is of lesser value, it may qualify for a life settlement option known as a “life assurance” benefit or conversion program, which allows the senior to convert between 15 and 50 percent of the policy value directly into long-term care payments.

Does your loved one have a long-term care insurance policy? It can pay for assisted living care. Policies vary, but once the determination and action is taken to collect on it, those monies can be paid directly to an assisted living facility or to the beneficiary who in turn pays the facility. It is wise to consult with an elder law attorney to help understand individual company requirements to optimize the process of collection.

An annuity can be used to pay for some or all of the senior’s assisted living. If your loved one invests a lump sum into an annuity, they will receive regular payments over a promised time period, usually the rest of their life. The annuity helps to stretch your senior’s budget and guarantee at least some money is coming in, even in the event they live longer than expected. Most annuities allow the beneficiary to continue to receive money regularly even if the purchase premium runs out. If your senior were to live a very long time, they would get more back than they put in and an added bonus is that annuities are oftentimes not fully counted as assets by Medicaid when applying for government assistance. The income is counted but not the value of the asset. It is imperative to seek the advice of an elder law attorney before opting into an annuity as they are complex financial products and a wrong decision could be disastrous.

Reverse mortgages are another strategy to pay for assisted living. If your loved one owns their home outright or has only a small mortgage on it, they can get cash value from their home equity in a lump sum or series of monthly payments. The bank will decide the valuation of the home based on multiple factors like the homes worth, interest rates and the applicant’s age. The borrower can stay in the house until death even if the loan balance exceeds the worth of the home. After death, the loan balance has to be repaid which usually means selling the home. Reverse mortgages were developed to help widows remain in their homes after the primary income earner passed away or if that spouse needed to move into assisted living, leaving the other spouse to reside in the long-time family home. Like annuities, a reverse mortgage is a complex financial product, and it is crucial to receive sound advice from a trusted professional and work with a reputable reverse mortgage company. If only one senior parent is living and they do not want a reverse mortgage, they might consider renting out their home and using a landlord to manage the property. The income from renting the house can be used to pay for assisted living expenses.

Lastly, it is possible to pay for assisted living with a bridge loan, which is a short-term loan of up to $50,000 explicitly designed to provide funds to move a loved one into an assisted living facility or continuing care retirement community. It is an unsecured (no collateral required) line of credit with the intent to finance the first few months of living expenses during the sale of the senior’s home, while the application for Veterans benefits is pending, or other actions that are taken that free up funds. Since the interest rates can range from 8.25 to 12.5 percent, this option is best as a short-term strategy. The other type of bridge loan is called the Capital Access Program. It is a lower interest lump sum loan secured by real estate or other assets that the company deems acceptable collateral. It is designed to help seniors come up with the large upfront entrance fee some senior assisted living facilities require. Both types of loans are based on the usual credit criteria: credit score, credit history, debt to income ratio, and more. The senior or an adult child can secure the loan, and up to six family members can cosign loan applications, allowing the risk to be shared among multiple family members.

If your loved one is healthy enough to successfully live in an assisted living facility, the monthly cost is likely a top factor when considering their options. These are some, but not all of the viable and creative ways to pay these costs. To fully explore the options available and what is best for your senior seek the advice of an experienced elder law attorney and make the best decision for your loved one. Contact our office today and schedule an appointment to discuss how we can help you with your planning and which strategy is best to help your senior pay for assisted living.

 

 

 

Alzheimer’s Disease 101 – Understanding the Basics

woman with alzheimer's disease What is Alzheimer’s Disease?

Alzheimer’s disease is defined as an irreversible, progressive mental deterioration that can occur in middle or old age. It is the most common form of dementia.

What causes Alzheimer’s Disease?

Alzheimer’s disease is caused by a generalized deterioration of the brain. The disease is caused by a combination of factors, including genetic, lifestyle, and environmental factors. There are a variety of factors that put people at risk for Alzheimer’s disease. Age and genetics are risk factors. As people age or if there is a family history of Alzheimer’s, there is a greater risk of the onset of Alzheimer’s disease. People with Down Syndrome or mild cognitive impairment have a greater chance of having Alzheimer’s as they age. If a person has experienced past head trauma, this puts them at risk for Alzheimer’s.

The risk of Alzheimer’s is also related to lifestyle and heart health. Those with poor heart health and an unhealthy lifestyle put themselves at greater risk for the disease.

Finally, women are more likely to be diagnosed with Alzheimer’s than men. Some causes and risk factors of Alzheimer’s disease are impossible to change or control, but lifestyle and heart health are things that can be controlled.

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5 Ways to Help Your Loved One Avoid Loneliness

Lonely old man staring out of a windowLoneliness has become a common hardship for seniors who live alone or who do not have the ability to leave their homes on a regular basis. With an increasing number of seniors living alone, isolation has become a growing concern for caregivers and loved ones. Social isolation can be dangerous for seniors, negatively impacting their mental and physical health, according to a Place for Mom. However, loneliness can be diminished, allowing seniors to live a more fulfilling and happy life.

Here are 5 ways to help your elderly loved one avoid feeling lonely.

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When Best Laid Plans Go Astray

When most people plan for their senior years, they mostly think about a will that specifies how their assets will be distributed upon their death.

But there are other things to think about as well, such as what will happen if you have a stroke, develop a serious illness or become incapacitated?

What should you or your loved ones have in place in those circumstances?

It is extremely important to consider and plan for serious illness, not just death. While we are living longer, that doesn’t always mean we are living healthier. Stroke, complications from diabetes or osteoporosis can lead to nursing home placement. A legal plan must be established with the help of an elder law attorney when a person is healthy so that a difficult situation doesn’t become more difficult when illness or incapacitation occur.

Here are some suggestions for how you can plan ahead for serious illness:

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Helping Older Adults Overcome the Holiday Blues

During the holiday season, many people experience sadness, especially older adults. Memories of family and friends who have passed on or the longing for family holidays of the past can cause them to feel isolated even when they are with family.

Often when elderly loved ones live alone, the warning signs of sadness and seasonal depression go unnoticed. During the holiday season, pay close attention to your older loved ones and watch for the warning signs of holiday blues: persistent sadness, feelings of worthlessness or helplessness, weight changes, withdrawal from social activities, slowed thinking or response, inability to concentrate, and excessive worrying.

If you sense that your elderly loved ones are unhappy, follow the tips below to help brighten the holiday season for them:

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The Benefits of Hiring a Geriatric Care Manager

Carole smile colour Mar 09

Family caregivers often overlook the benefits and peace of mind that a geriatric care manager can provide. Caregivers may feel that they know how to care for their loved one in the best way possible. But very few caregivers can manage caring for themselves, their families and elderly loved ones without feeling anxious and overwhelmed at times.

A geriatric care manager is trained and experienced in any of several fields related to long-term care including: nursing, gerontology, social work, psychology, or case management, with a specialized focus on issues related to aging and elder care.

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Caregiver Appreciation

As we know, May is Older Americans month but let’s also remember to celebrate the more than 45 million family members who care for seniors on a daily basis. On average, these caregivers provide 20 hours of unpaid caregiving support each week.

Josh Fotheringham, a former Apple software designer and current CEO of Caring in Place®developed the Caring in Place® iPhone app and online portal to help family members manage the complexities of caring for their aging loved ones.

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Supplemental Security Income (SSI)

 

SSI is the basic federal safety net program for the elderly, blind and disabled, providing them with a minimum guaranteed income. For 2014, the maximum federal SSI benefit is $721 a month for an individual and $1,082 a month for a couple. These amounts are supplemented in most states.  For example, Pennsylvania adds a supplement of $22.10 a month for eligible individuals.

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The Impact of the Affordable Care Act on Special Needs Planning

A special needs trust is essential for protecting a loved ones quality of life and access to government benefits.

A special needs trust is essential for protecting a loved ones quality of life and access to government benefits.

On March 23, 2010, the Affordable Care Act (ACA) was signed into law by President Obama.  This series of laws, also known as Obamacare, had and will continue to have a major impact on all aspects of our health care system.  No greater example of this can be found than that affecting the long term planning which must be done by members of the special needs community.

Beginning January 1, 2014, insurance companies are no longer able to deny coverage to adults for pre-existing conditions.  In fact, insurance companies are prohibited from denying coverage or charging more to any person based on their medical history, including genetic information.  Insurance companies are also required to offer and renew coverage for any applicant.

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Home Modifications for the Elderly

Modifying a home can make it safer and more accessible for elders to live independently longer. Home modifications adapt a living space so that the homeowners can live safely, perform everyday tasks more easily and live independently despite their physical limitations. Home modifications can be as simple as adding a hand rail in the bathroom or as complex as removing a staircase for a wheelchair ramp.

Many elders have houses that were built before architects thought about spaces that were accessible to everyone. Narrow stairs and doorways are fine for someone of a younger age but could be dangerous for senior citizens.

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