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Does Health Insurance Cover Assisted Living Expenses?

Choosing a long term care option for you or your…
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Choosing a long term care option for you or your loved one often comes with an array of questions like, how much does it cost? How does one pay? And of course, will health insurance cover the cost? The fact is, this service isn’t cheap, and its cost is often a shock to many people. According to Genworth’s 2020 financial cost of care survey, the average cost in the United States is $4,300 per month, an amount that many families can’t afford. Fortunately, you can offset these costs, and this article will help you identify the various ways.

What is an assisted living community?


When seniors can no longer maintain independent lives, changing their environment to an independent living community or senior living community is a great way to ensure that their living space is safe. Residents of these facilities can expect nutritious meals, personalized and quality care, a healthy lifestyle and good social engagement in a residential setting.

That being said, many people confuse assisted living communities with nursing home care, but it’s not the same. In a skilled nursing home, residents receive full-time attention for their care needs from trained medical staff. Skilled nursing homes are typically for people who require a higher level of care or suffer from chronic conditions, developmental disability, and mental illness.

While skilled nursing could be short or long-term, the assistance is generally long-term housing senior care. Therefore, the residents of these facilities are generally active, except that they may need support with activities of daily living (ADLs) like bathing, using the toilet, and dressing. Furthermore, some U.S. centers provide memory care to meet the special needs of residents with any form of dementia like Alzheimer’s disease. This involves special services, like creating a separate dining room and food menu for them.

Three Ways to Cover the Costs


Funding typically falls under these two umbrellas—private and government-subsidized options. While most families cover the costs with private funds (which is a combination of pension payments, retirement accounts, and personal savings), government programs can provide financial assistance.

The type of funding available to an individual depends on various factors including, income, disability, age, and the type of care they want. These factors often make choosing the right facility can be confusing. Therefore, you may want to consider comprehensive medical management services to help provide personalized services that meet your specific needs.

A comprehensive medical management service will ensure that you and your loved one receive appropriate medical care at reasonable healthcare costs. However, in the meantime, here are three ways you can use insurance to pay.

Use Medicaid insurance.

Many people confuse Medicaid service with Medicare, but they’re different. Medicare is a federal health insurance plan for people aged 65 and above. However, it doesn’t cover personal care or residential services in an assisted living community. Medicare covers home health care plans for skilled nursing, speech, occupational and physical therapy, but they have to be physician-prescribed. Also, short-term care is usually for people diagnosed with a terminal illness or who have less than six months of life expectancy.

On the other hand, Medicaid is only available to people who have assets and income that are below the federal poverty levels. This means to quality for Medicaid service, you’ll need to have less than $2,000 in assets or should have exhausted all your resources.

Because individual states administer Medicaid, the requirements for this type of insurance plan may differ. However, if you or your loved one qualifies, Medicaid service will take up the cost of long-term facility care and may also handle home care services.

Use long-term care insurance.

Also referred to as senior care insurance, long-term care insurance is an insurance plan bought via a private insurance company to offset eldercare costs. Like other health insurance plans, this type of insurance requires a paid premium. However, the price is typically set according to the number of years before anticipated use. This depends on factors like the health status of the insurer and the coverage plan.

While the U.S. Department of Health & Human Services makes it illegal for insurance companies to deny coverage because of pre-existing conditions, it’s still better to purchase an LTCI when you are still in reasonably good health. That’s because it can significantly reduce your health premium cost.

Consider a life insurance settlement.

Many people don’t know this, but the service can be funded using a life insurance policy. In this case, a third party buys the insurance policy for a cash payment that is typically less than the death benefit amount but more than the policy’s surrender value. Alternatively, if you want to retain some death benefits, you can sell the policy at market value and use its proceeds to fund the costs. Although not all insurance pays for assisted living, there are various ways to offset the costs.