5 Best Way to Pay for Eldercare

Assisted Living, Memory Care or Retirement Community
5 Ways Paying For Eldercare

With so many options in elderly care for families, there are also several ways to pay for that care. Moving a loved one can be overwhelming, and because we are in a panic mode, we forget to consider or aren’t aware of some of the ways we can pay for the care. Below is the most common ways or options that you may be able to use to pay for your loved ones’ care. In 2019, the average hourly rate for home care across California was $26.00/hour. For assisted living, the average cost of assisted living in California in 2019 was $4,500 / month, according to Genworth Financial, and it may be higher depending on the area you live and even higher if your loved one needs memory care. 

Assisted living communities have structured care pricing in two ways: all-inclusive or fee-for-service pricing. Inclusive means that a single monthly fee will cover rent, board, and any additional services a resident needs, such as housekeeping or transportation. This option provides more certainty and allows the family to plan for the future. On the other hand, Fee-for-service means a resident pays only for those services they use. This option is most popular, and most senior living communities use this model.

5 Best Options for Paying Eldercare

  1. Private Pay
  2. Veteran’s Aid & Attendance
  3. Long Term Care Insurance
  4. Medical & Assisted Living Waiver
  5. Selling Part or some of your insurance policy

Private Pay Private

Private pay simply means that an individual has the resources to pay for the care by way of savings, 401k, pension, and selling home and It is sometimes called Self Pay.

VA Aid & Attendance

This significant benefit often overlooked by many families with Veterans or surviving spouses who need additional monies to help care for ailing parents or loved ones. The veteran must meet care needs requirements as well as financial assistance. Aid and Attendance can help pay for care needs in the home, Nursing Home, or Assisted Living community. 2019 Benefit amount for  Veteran is eligible for up to $1,881 per month, married couple $2230 while a surviving spouse is eligible for up to $1,209 per month. These figures change yearly. It usually takes up to 12 to 18 months to get the benefit. You can hire a VA accredited agency or reach to your local veteran’s office Veterans Service Agency for more info.

Long Term Care Insurance

LTC Insurance varies greatly, and it’s different from your health insurance. An individual must have purchased it BEFORE they need and meet the ADL(activities of daily living) needs and be currently in need of service.  Average benefit $100 per day, however many policies have inflation riders (usually around 2% – 5% per year). A plan may cover $100 per day now but maybe worth $150 per day in 10 years. Read your policy thoroughly before contracting care due to some policies having specific requirements such as licensed professionals and covering only assisted living as opposed to in-home care.

Medical & Assisted Living Waiver

The ALWP was created to assist Medi-Cal beneficiaries to remain in their community as an alternative to residing in a licensed health care facility. The program provides specified benefits to eligible seniors and persons with disabilities. Medi-Cal reimburses for the services offered to residents enrolled in the ALW; however, the resident is responsible for paying for their room and board. For 2018, for those with Supplemental Security Income (SSI) income of $1,173.37, room and board are $1,039.37 and those with an income of $1,193.37 or higher, room and board is $1,059.37.

To find out the requirement and to apply here and check eligibility. The ALW is an alternative to long-term placement in a nursing facility and is presently available for most counties, and there is a 12 to the 18-month waitlist. This program is relatively new and has helped many families who are not able to care for their loved ones.

Selling Part or Some of Your Insurance Policy

Life settlements can be a valuable source of cash for people who would otherwise surrender their policies or allow them to lapse—or for people whose life insurance needs have changed. Maybe your children are all grown, and you no longer need the protection. But they are not for everyone. People 65 or older can typically sell their life insurance policy as long as the face value of the plan.

Life settlements can have high processing fees costs and other consequences. And even if you decide a life settlement is generally right for you, it can be hard to tell whether you are getting a fair price; as a result, you should proceed with caution. Consult with your broker or other financial services provider, and make sure that you:

  • are dealing with adequately licensed entities;
  • are aware of the confidentiality policies of the parties involved;
  • are getting a fair price; and
  • understand the tax and other implications of the transaction.

Navigating the financial piece of eldercare can be overwhelming and confusing. A considerable part of our services was referring families to the appropriate agencies and trusted professional who can assist them in their goal of caring for an elderly loved.  If you require guidance or need a referral, please reach out to our office at 714-941-9242.

Suad Huerta , CSA CDP, RCFE
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