Navigating the financial aspects of senior living
The time has come that you, or a loved one, needs assistance - here's how to make sure you can afford it
If you've decided that your loved one has reached a point in life where they need help with activities of daily living, you've already completed perhaps the most emotionally taxing step in the process. As for the financial aspect of shifting from an independent living environment to the next level of care, it can be complicated—but that's where we come in.
Our senior living communities provide all-inclusive care that includes housekeeping, meals, transportation, and entertainment. Because these things are included in your monthly rent, without the recurring costs associated with owning and maintaining your own home, you may just find that senior living is more affordable than you thought.
"Finances….‘how am I going to be able to pay for this’ - that's always our residents' first concern," said Placement Specialist Sarah Ingram, of Best Life for Seniors.
Our goal is to provide you with a framework and the tools to help you navigate the financial aspect of your journey.
When your loved one reaches that point in life where they need the support provided in an assisted living community, or the help administered in a memory care community, the costs associated can be significant. Unfortunately, those figures can induce a kind of "sticker shock," which can deter people from seeking the care that would improve their overall quality of life, health, and safety.
But it doesn't have to be that way. There is help available, although many don't realize it exists.
Paying for full-time senior care services can be broken down into two general categories: Private Pay and Assisted Pay.
Of the two methods, private pay is the most straightforward. Simply put: the resident, or the resident's friends or family, pays their monthly fees in full out of pocket.
Those with the means to do so foot the bill themselves without outside assistance. At some communities and in certain states, private pay is the only method available.
When a prospective resident begins the process of inquiry into our community, one of the first things we ask about is their or their spouse's military background.
Aid & Attendance Benefits
Veterans, and their spouses, who served during specific time periods are entitled to government benefits designated to help pay for the cost of assisted living and memory care services. The benefits can be significant: up to $3,253 per month, tax-free, for veterans and their families.
The requirements do vary somewhat depending on when the veteran served, but the following are included:
Ninety (90) days during a period of war as outlined by the United States Department of Veterans Affairs (VA).
Wartime Service Dates
World War I: April 6, 1917 - Nov. 11, 1918
World War II: Dec. 7, 1941 - Dec. 31, 1946
Korean War: June 27, 1950 - Jan. 31, 1955
Vietnam War: Aug. 5, 1964 - May 7, 1975
Gulf War: Aug. 2, 1990 – through a future date to be set by law or Presidential Proclamation.
The veteran is not required to have served in combat—if a veteran was stationed in Kansas in 1952, not Korea, that would still count.
Veterans who served during the Gulf War era are required to have twenty-four (24) months of service, or a "full tour."
Age / Status
To be eligible for Veteran-Directed Care, veterans must be 65 years old or be designated "unemployable" (veterans designated “unemployable” tend to be receiving Social Security disability already).
Honorable or medical discharge.
Unfortunately, it can be difficult for some veterans to access their benefits. Many veterans who try to navigate the VA system themselves, but either don't hear back from the VA or are denied coverage by the VA due to a discharge issue. However, it is possible to petition the VA for a change of discharge status.
Additionally, few veterans describe the VA system as "user-friendly."
Maybe you, or your loved one, has encountered a VA-related roadblock. Maybe you haven't yet begun the process, but you are aware that it can be time-consuming and difficult.
For those seeking assistance navigating the VA's system of benefits, we recommend working with our partners at Patriot Angels because having experts on your side can make all the difference.
Patriot Angels is a Tennessee-based non-profit organization that specializes in helping veterans navigate the VA system to receive the benefits they have earned through their service.
"We help veterans and their spouses and widows supplement the cost for senior living. Our first goal is to educate families," said Patriot Angels Special Project Manager Erin Walker. "About eight of ten veterans and their spouses don't know these benefits exist."
The United States Department of Veterans Affairs doesn't advertise the benefits and doesn't make the process to obtain the benefits easy.
"We just don't want someone to automatically rule themselves out," Walker said. "Do not rule someone out based on information you've heard in the past. That's why we're here: to help you answer these questions."
Patriot Angels asks that veterans send whatever discharge documents they have in order to help the non-profit identify service dates and discharge status. Patriot Angels also looks for key dates to establish eligibility for benefits.
One of the main reasons that it is important for veterans and their spouses to go to Patriot Angels early in the process is to avoid financial missteps, like missing out on funds that can pay for care. Their mission to help make sure you remain financially secure. And it's important to note that there is absolutely no need to spend down all of your money before making that call to Patriot Angels.
"Veterans usually come to us when they're getting moved in and they need extra money each month to help pay for the care they need - it expedites the process when the veteran is already living in the community," Walker said. "Our goal is to be able to assist families. We can usually do it in about thirty to forty-five days. The VA side of the process usually takes about one-hundred-and-twenty days, but the VA will reimburse veterans for expenses incurred during that wait time after the process has officially begun."
Patriot Angels has provided invaluable help to many of our residents, and they're able to help people access their benefits quickly.
"Most of the people we work with are eligible for Aid and Attendance benefits," Ingram said. "Working with Patriot Angels makes the process so much quicker than going straight through the VA without any additional support."
For more information, call the Patriot Angels at (844) 757-3047, or go to their website at patriotangels.com.
Medicaid / Personal Care Services
For many, the answer to "How can I afford this," comes through the help of the North Carolina Medicaid Personal Care Services (PCS) program.
Medicaid PCS is a health assistance program for North Carolina Medicaid beneficiaries who, because of a physical or developmental disability, cognitive impairment, or other chronic health condition, are unable to accomplish tasks that they would ordinarily do for themselves if they were not disabled. Covered services under this program include the services that are provided to residents at the Community—assistance with activities of daily living (ADLs) such as bathing, dressing, mobility, toileting, and eating.
In order to qualify for the Medicaid PCS program, an individual must first qualify for North Carolina Medicaid.
North Carolina Medicaid is available to individuals who are:
- Age 65 or older,
- Blind or disabled,
- Infants or children under the age of 21,
- Low-income individuals or part of low-income families,
- In need of long-term care, or
- Receiving Medicare.
In addition, to be eligible for North Carolina Medicaid, an individual must also be:
- A resident of the state of North Carolina,
- A U.S. national, citizen, permanent resident, or legal alien,
- In need of health care/insurance assistance, and
- In a financial situation that would be characterized as low income or very low income.
Until January of 2023, Medicaid's monthly income limits had not been raised or adjusted for inflation for 20 years while Social Security benefits had increased each year. For North Carolina, the income limit for Medicaid to help fund assisted living is $1,355 per month; to help fund memory care, it's $1,717 per month. In addition, your resources must not be more than $2,000 for an individual. Resources include cash, bank accounts, retirement accounts, stocks and bonds, cash value of life insurance policies, and other investments.
For those who are living solely on Social Security, those numbers are usually manageable, but many people have additional income from pensions and other sources which can quickly push their monthly income totals above the limits.
Pre-planning is vitally important because all assets must be out of the resident's name five years before the resident becomes eligible for Medicaid. It's important to be prepared because medical emergencies cannot be predicted. Everything—from vehicles to homes and real estate—must be divested five years before you become eligible for Medicaid.
For many, a spend down—the process of reducing your income and assets in order to be eligible for Medicaid—is a valuable tool. However, there are requirements in place for the spend-down process. Money spent on the senior's care, whether it's a burial plot or paying for medical care, is an example of an acceptable choice when spending down one's assets.
There are also eligibility requirements to consider. For example, people who move to North Carolina in order to move into senior living must have either lived here for a minimum of six months or have established a permanent residence for a minimum of 60 days in order to become eligible for Medicaid assistance.
When you apply for Medicaid, the state of North Carolina will initiate what's called a 60-month Medicaid Look-Back Period. This means that the state will examine all your asset transfers over the past five years to ensure that no assets were sold for less than fair market value or given away. This look-back review includes examining asset transfers made by one's spouse. If the state determines that the look-back rule has been violated, the state assumes that the violation was committed to meet Medicaid's asset limit. The state will then calculate and impose a penalty period of Medicaid ineligibility.
An online spend down calculator can help you determine exactly how much of your assets must be spent down in order for you to be eligible for Medicaid long term care. The spend down calculator is available here: medicaidplanningassistance.org/medicaid-spend-down-calculator.
When the time comes to work out how to pay for long-term care, it's important to explore all options. There are some methods of generating funds that work well for people but can be overlooked.
Some people have life insurance policies that can be sold, converted, or liquidated through a viatical settlement. A viatical settlement is an arrangement whereby an individual sells their life insurance policy to a third party for less than its mature value in order to benefit from the proceeds while still alive.
Alternatives to Selling Your Home
Many residents sell their homes as they transition to long-term care. For others, it makes more financial sense to take out a reverse mortgage or to open a home equity line of credit. Another option is to rent out your home in order to fund your care.
INFORMATIONAL PURPOSES ONLY: The materials and information on this website have been prepared or assembled by the Community and are intended for informational purposes only. The information is general in nature and is not intended to be, and should not be relied upon as, legal advice. Some of the information may be out-of-date and may not reflect the most current legal developments regarding Medicaid eligibility. This website contains information on legal issues and is not a substitute for legal advice from a qualified attorney licensed in the appropriate jurisdiction. Establishing Medicaid and Medicaid PCS eligibility can be a complicated process, and the Community urges you to consult an attorney or specialist in North Carolina elder law to help you navigate these issues. The Community expressly disclaims all liability with respect to actions taken or not taken based on information contained or missing from this website.