How to Pay for a Memory Care Facility When Aging at Home Is No Longer Feasible

For seniors with Alzheimer’s or other forms of dementia, the desire to live out their days at home is often overshadowed by the complex nature of their condition. As symptoms progress, ensuring quality care and safety for a loved one becomes difficult and ultimately calls for transitioning into a specialty care facility. 

Memory care costs vary by location, level of care, and services offered but generally cost more than a standard assisted living program. Thankfully, there are many options for easing this financial burden. 

The Challenges of Paying for Memory Care

According to 2022 Census Bureau data, the median annual income for Americans over 65 was $50,290 before taxes and deductions. However, these numbers vary as we look at individual age brackets within this demographic:

• 65-69 years: $59,430 median income
• 70-74 years: $55,990 median income
• 75+ years: $41,060 median income

As of 2021, the average cost of senior care in the United States was around $6,935 per month. The cost of memory care depends on various factors such as location, level of care, and services offered by the facility, but typically adds $1000-5000 per month. 

This discrepancy between income and cost of care is often overwhelming for patients and families looking to transition into a long-term care solution. Unfortunately, long-term care costs are not covered by standard health insurance or Medicare, but other benefits are available. It’s essential to research the programs you may be eligible for and how they can help ease the financial burden. 

Why Does Memory Care Cost More Than Other Types of Long-Term Senior Care?

Memory care often costs more than the standard long-term senior care facility. This is because of the specialized care, programs, and safety precautions that come with caring for patients with Alzheimer’s, dementia, or other conditions related to cognitive decline. 

A memory care facility typically provides:

• 24-hour specialty care
• Memory-enhancing activities
• Facility layouts designed for safe wandering
• Lower staff-to-resident ratios
• And more

Straightforward Memory Care Financing: Personal Funds

Although financial assistance programs are available for seniors, the easiest and fastest way to cover the cost of memory care is by using personal savings/assets. 

Common sources of personal financing include:

• Investments in stocks/bonds
• IRAs or 401(k)s
• Employer pensions
• Sale of non-essential assets
• Reverse mortgage or Home Equity Line of Credit (HELOC)

5 Options To Explore When Determining How To Pay for Memory Care if Personal Funds Are Not Enough

According to the Department of Health and Human Services, nearly 70% of seniors 65 and older will eventually need long-term care services or support. 

Health insurance and Medicare do not typically cover long-term care costs, and personal funds can often be depleted quickly. 

So, you may be wondering how to get extra help paying for a memory care facility in the United States.

Read on or check out Senior Services of America’s extensive financial support resources for more information. 

#1: Medicaid

Medicaid provides additional healthcare coverage for low-income seniors enrolled in Medicare. Each state will have different rules and regulations regarding what services are covered under what circumstances, so it’s essential to research your state’s guidelines. 

Generally, Medicaid will not cover the cost of room and board. Still, it may help with the costs of 

• Inpatient and outpatient hospital services
• Home health services
• Personal care services
• Meal preparation 
• Case management
• Transportation to and from medical care
• Prescription drugs 
• Laboratory and X-ray services 

Some seniors may qualify for Medicare programs that provide more extensive coverage. Eligibility requirements vary by state, but seniors are typically evaluated based on condition, functional limitations, and financial resources. It’s essential to determine your state’s eligibility requirements to understand how these resources could work for you.

Institutional Long-Term Care Program

Institutional long-term care is a Medicaid-funded program that extends support to individuals whose symptoms have progressed beyond the capabilities of home care. 

While other Medicaid services are prohibited from including room and board, this program is designed to provide general health coverage and a more comprehensive range of services, including:

• Nursing care
• Personal care
• Room and board
• Therapy services
• Medical supplies

Home and Community-Based Services Program

Home and Community-Based Services (HCBS) is a Medicaid-funded program that supports individuals requiring long-term care in their homes or communities rather than in institutional settings. 

HCBS is an excellent option for seniors in the early stages of cognitive decline who want to receive care from the comfort of their own homes. Some waivers may even allow family members to become paid caregivers. 

Services offered by HCBS may include:

• Home health care
• Occupational, speech, and physical therapies
• Personal care 
• Senior centers
• Adult daycares
• Respite care
• Hospice care
• Homemaker services
• Transportation assistance

#2 Veteran’s Benefits

United States veterans and their spouses may receive benefits through the Department of Veterans Affairs (VA). Those with Alzheimer’s, dementia, or other conditions related to cognitive decline may be eligible for additional financial assistance. 

The Veteran Directed Care Program gives veterans who are candidates for nursing homes a flexible budget for long-term home care services. The services and products covered by this program vary but generally include anything required to improve a veteran’s health, care, or ability to live independently. 

Some coverages may include:

• Adult daycare
• Personal care services
• Home modifications or equipment
• Homemaker services
• And much more 

The VA Aid and Attendance Program provides additional monthly payments to those who need assistance with daily activities or other forms of long-term care such as:

• Home-based care
• Respite care
• Adult day health care
• Nursing home care
• Palliative care
• Hospice care
• Caregiver support
• Physical therapy
• Inpatient and outpatient medical services
• Pain management

#3: Pre-Existing Life Insurance Policies

Using a pre-existing life insurance policy to fund memory care can be achieved through a process called “life settlement” or “viatical settlement.”

A policyholder can sell their policy to a third party or back to the original insurance company at a discount from its face value in exchange for cash. Upon sale, the owner will no longer be responsible for paying premiums on the policy. It is important to remember that by surrendering a life insurance policy, those funds will no longer be available upon death. 

#4: Non-Medicaid State-Funded Programs

Some states have non-Medicaid programs to provide various services to residents who need assistance but do not qualify for Medicaid. 

Benefits from non-Medicaid state-funded programs may include: 

• State Supplemental Payments (SSP) provide additional financial assistance to those who receive Supplemental Security Income (SSI) payments from the federal government. 
• Home and Community-Based Services (HCBS) waivers for seniors who do not qualify for HCBS Medicaid programs. These waivers may include personal care, respite care, and various community-based services. 
• Senior nutrition programs that provide meals for seniors in need, regardless of Medicaid eligibility. 

Services offered will vary by state, so be sure to research which programs may be available to you.  

#5: Loan Programs

• Caregiver loans – Caring for a loved one experiencing cognitive decline can be incredibly heartbreaking and overwhelming for everyone involved. Caregiver loans provide financial support while ensuring that the caregiver, often a family member, receives the assistance they need. It works similarly to a reverse mortgage with the added benefits of having low interest rates, no insurance premiums, no age restrictions, and no primary residence restriction. The loan also allows family members and borrowers to exchange disbursements as often as needed for the life of the loan. 
• Alzheimer’s care loans – These loans are commonly utilized by families that need immediate care but are still waiting on other sources of financial assistance, such as veteran’s benefits. 
• Bridge loans – Bridge loans are short-term loans designed for those needing assistance during a transitional period before securing long-term financing. This option is typically taken by seniors waiting for the sale of assets or veteran’s benefits who do not wish to delay long-term care. 

Organizations That Can Help Seniors Find Solutions for Paying for Memory Care

ElderLife Financial Solutions

Elderlife Financial Solutions works to guide you toward the financing solutions that best fit your loved one. 

In addition to assisting with identifying long-term solutions, you can also receive an Elderlife Bridge Loan. This loan is designed to help your loved one move into a memory care facility today while waiting for other funds to become available later. It is engineered to be fast and easy, with same-day approval and funding.

In addition, you can consult Elderlife Financial Solutions for assistance with:

• Cost of care
• VA benefits
• Life insurance
• Long-term care insurance
• Personal loans
• Reverse mortgages
• Selling a home

Ashar Group

Ashar Group helps you use any existing life insurance policy to pay for long-term care or senior housing. Funds are deposited into a Long-Term Care Benefit Account that makes automatic monthly payments to the long-term care provider of your choice. The payment plan is flexible and can be adjusted as your needs change. There are no fees; once enrolled, you are no longer responsible for premium payments. 

The process is quick, with benefit payments starting in as little as 30 days. A Long-Term Care Benefit Plan for senior living and assisted living costs can be tax-advantaged and is both a Medicaid-qualified spend-down and a VA-qualified spend-down.

It is prudent to consult with a Financial Advisor before committing to any of the above financial options.  

Planning Ahead for Senior Care Financing With Long-Term Care Insurance

If you have a large amount of assets but do not want to use them to pay for extended care, you may want to consider looking into a long-term care insurance plan. 

Long-term care insurance is an important financial tool that can help seniors with the costs of extended specialty care. It covers a variety of services that are not covered by a typical health insurance plan, including:

• Home care
• Assisted living
• Adult daycare
• Nursing home care
• Memory care
• Respite care
• Hospice care
• Personal care
• Physical therapy

This option should be considered early, as pre-existing conditions will prevent individuals from qualifying for a plan. It is recommended that seniors begin a long-term care insurance plan around their mid-50s to mid-60s.

Discuss Your Memory Care Financing Options With a Professional at Senior Services of America

When you’re ready to get some help figuring out how to pay for a memory care facility, contact a Senior Services of America community near you. We have the resources and advisors to help you find the best financial options that can cover long-term care costs. 

We also offer a range of facilities including:

• Independent living
• Assisted living
• Respite care
• Memory care

The content in this blog is not intended to be a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or other qualified health provider with any questions you may have regarding a medical condition.