How Seniors Pay for Assisted Living and Memory Care
Mike McClernonOct 26th, 2020
Financial & Legal Considerations
We often get questions about how (or if) Medicare and Medicaid can be used to pay for Assisted Living and Memory Care charges. We also get questions about how seniors pay for Assisted Living and Memory Care communities overall.
Medicare is a government support program, paying healthcare costs for seniors and the disabled. Medicare is, by definition, a medical program. Assisted Living and Memory Care are essentially housing with support for the Activities of Daily Living built into them. There is no payment from Medicare for any type of Assisted Living or Memory Care community.
New York Medicaid does, in some cases, pay a portion of the costs for Assisted Living. On Long Island, there are about 10 communities that accept Medicaid for the “Care” portion of the monthly bill. (The resident’s Social Security payment typically covers the “Rent” portion of the bill.) There are more communities that accept Medicaid/Social Security in the Five Boroughs. Generally speaking, communities funded by Medicaid offer shared rooms, not singles. They also offer meals, cleaning, laundry, activities, and access to medical services. These communities are typically simpler than private pay Assisted Living communities. ]
To gain entry, the resident must need assistance with multiple Activities of Daily Living, but must also be able to eat independently, communicate their needs, and ambulate (move around) independently. Just to be clear, the requirements for entry into a Medicaid funded community are that the potential resident has needs, but not overwhelming needs. While this seems like a narrow window, many thousands of people have been helped by this program over the past 20 years, the Medicaid Assisted Living beds are typically full or almost full, and the State of NY has avoided nursing home placement for many, many people.
At the present time, there is no provision for dementia residents in Medicaid funded Assisted Living.
Long-Term Care Insurance Policies
This form of insurance pays for care not covered by health insurance. It typically covers both care at home and care in Assisted Living and Memory Care communities. Most people do not carry this type of insurance. It offers good value when used to help pay for Assisted Living, Memory Care, Homecare, and Nursing Homes.
The assumption of many people is that seniors have little to no income. The reality is that income from wages might be in the rearview mirror, but many seniors have a surprisingly high level of income from other sources. Social Security, pensions, annuity payments, and monthly payouts from 401Ks and similar retirement vehicles can pay out thousands of dollars each month. This money can be used for any purpose, of course, and this includes Assisted Living and Memory Care costs.
Houses, Savings, and Other Assets
On Long Island and in the Greater NYC area, many seniors bought houses 30-50 years ago that can be sold to pay for retirement expenses, including Assisted Living and Memory Care communities. The revenue from the sale of a house can be used to supplement income and pay for high-quality care in Assisted Living and Memory communities. Similarly, stocks and other financial assets can be sold to supplement the monthly cost of care. Experienced Elder Care attorneys can help structure a senior’s assets and payouts in a way that provides some protection for taxes and the probate process overall.
Many Expenses Go Away in Assisted Living
Living in a home or an apartment, seniors have a number of expenses associated with day to day life. A house requires upkeep, tax payments, and repairs, and many other investments. People need to shop for food and other items, they may have a car or other transportation costs, and they pay for any number of services. When a senior moves into Assisted Living or Memory Care, virtually all of those expenses go away. It’s surprising what you can afford when almost all of the expenses of living on your own go away!