The Challenge of Paying for Assisted Living
Jan 20, 2016
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The Unique Reality of Assisted Living Communities
Assisted Living communities are one of the only areas of health care that Medicare will not pay for, and most communities limit the number of Medicaid rooms they have, if they have any, because the reimbursement rate is so low. This is why most Assisted Living facilities are private pay. Most assisted living residents pay from their own social security, pensions, savings or with help from family members. Often funds to pay for Assisted Living comes from the sale of a home or the sale of stocks and bonds. Below is a list of some other excellent options and resources for Assisted Living financing options:
Long Term Care Insurance
This is one of the most underutilized and best options for paying for Assisted Living. It may be too late to cost effectively start a long term care insurance policy for you depending on your current age. But inform and educate your children to start now and plan for their future.
Reverse Mortgages
A reverse mortgage is a loan available to seniors age 62 and above. It's used to release the home equity in the property as one lump sum or in multiple payments. The homeowner's obligation to repay the loan is deferred until the owner passes away, the home is sold or the owner moves out. In the case of couples, as long as one person still lives in the home, the payments do not need to be made on the loan.
Secured Lines of Credit
A secured line of credit is a loan from the bank, credit union or other financial institution. Similar to a bank account, you may draw funds as needed, but you only pay interest on the amounts drawn. A line of credit can be secured by real estate, CD's, equities (stocks) and cash that you may have. You can borrow from it over and over again without having to renegotiate terms.
Life Insurance
Some life insurance policies have a cash value that may be withdrawn or borrowed against. You may also obtain the proceeds from a life insurance policy by selling or liquidating it before death.
Tax Considerations
Families often help support their loved ones at Carrington Court. Each individual may give up to $14,000 in 2015 & 2016 and married couples, filing jointly may give up to $28,000.00 in 2015 & 2016 without being subject to Gift Taxes.
Costs related to senior living may be tax deductible as medical expenses for both the resident and their family caregiver if they meet applicable Internal Revenue Service requirements. You should obtain your own qualified tax counsel in these matters.
Companion Living
Two residents may share a suite as companions. This offers a more affordable option, with all the benefits and assistance of Assisted Living remaining the same. A roommate can often help ease the transition to a new community.
Veterans Benefits
The United States Department of Veterans Affairs administers the veterans pension program which also includes aid and assistance and housebound benefits. For more information on qualification for and how to apply for these benefits go to http://www.vba.va.gov/bln/21/pension/vetpen.htm#7.
If we start doing our due diligence to plan and provide for the end of our circle of life the future will begin to grow bright!
Editors Note: This article was submitted by Michael Nielson, Administrator of Carrington Court Assisted Living and Memory Care. He may be reached at 801-676-8787 or by email at [email protected]
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