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Cost of senior living

Who Pays What When It Comes to Senior Living?

If you or your loved one qualify for Medicare and/or Medicaid or have health insurance, you may think you have the cost of senior living covered. Unfortunately, that’s an incorrect assumption that all too many seniors and their families make. Here’s what Medicare, Medicaid and health insurance really pay towards the cost of senior living and your options for covering the difference.

What Medicare Pays 

You’ve paid into this federal insurance program throughout your working life and now that you or your loved one is an eligible beneficiary you’ve likely benefited from coverage for preventative care, doctor’s office visits, outpatient services and perhaps even a hospital stay. So, it stands to reason that should care be needed in senior living that would be covered by Medicare as well right? 

The answer is yes AND no. In fact, Medicare actually only covers senior living if you require skilled services or rehabilitative care: 

  • In a skilled care facility for a maximum of 100 days, but it only pays 100% for the first 20 days.

Medicare does not pay for non-skilled assistance with Activities of Daily Living (ADL), which make up the majority of care services in senior living nor does it pay for room and board.

Does Medicaid Fill in The Gap?

Medicaid is also a federal program; however, it is an assistance program that is run by state and local governments within federal guidelines and it is specifically designed to serve those with low incomes regardless of age. 

Seniors can be eligible for both Medicare and Medicaid. But to qualify, your income must be below the level set by your state and you must meet state eligibility requirements based on the amount of assistance you need with ADL. If you do qualify, then Medicaid will cover skilled care facility costs beyond the 100-day limit for Medicare.

Health Insurance and the Cost of Senior Living

You might expect that health insurance through an employer or a private health insurance plan would offer more coverage toward the cost of senior living. Unfortunately, that’s not typically the case either as most feature similar coverage as Medicare.

Additional Options to Help with the Cost of Senior Living

Even though Medicare, Medicaid and/or health insurance may not pay as much as you thought, rest assured there are other options that can help including:

  • Veterans Aid & Attendance Benefit – Wartime veterans or a surviving spouse may be eligible to receive a non-service-connected pension (above the basic pension) to assist in paying for senior living. 
  • Long-Term Care (LTC) Insurance – LTC insurance can help you pay for senior living by covering services that health insurance, Medicare or Medicaid typically don’t. 
  • Life Insurance Conversion – If you or your loved one has an in-force life insurance policy it can be converted into a pre-funded financial account that disburses a monthly benefit to help pay for senior living. 
  • Reverse Mortgage – This type of home equity loan is for homeowners 62 or older who want to access their equity to supplement income. Here, the lender makes payments to you based on a percentage of your accumulated equity which you can then pay towards the cost of senior living.

We’re here to help too!

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For more information download our Family Guide to Funding Senior Care & Housing or call (224) 333-6247 to speak to a team member.