Senior Housing Finance Guide
For many families, money plays an important role in the final decision for a senior housing facility. While a senior living residence may cost more than living at home, it may cost significantly less when factoring in elements such as meals, utilities, maintenance and personal care. On average, a one bedroom apartment in an assisted living community costs $42,000 annually, while a private room in a nursing home costs over $87,600 a year (Genworth 2014 Cost of Care Survey). The cost of senior housing varies by location and housing type.
When making your decision, consider the apartment size, level of care and any additional fees, such as administrative fees charged upon move-in. Also keep in mind that many housing facilities include most of the resident's living expenses, including your or mortgage, utilities (electricity, heating and air conditioning, garbage, water and sewer), maintenance, laundry, meals, and specialized care, as well as other amenities.
You may be eligible for insurance or financial assistance to help minimize the monetary impact of long-term medical care.
- Long-term Care Insurance (LTCI): Long-term Care Insurance helps cover the costs of senior living that are not covered by your private medical insurance policy. Many insurance companies will not insure patients with preexisting conditions, so it's best to purchase a LTCI plan before serious health issues arise.
- Long-term Care Benefit Plan: Life insurance policy owners may choose to convert their policy into a Long-term Care Benefit Plan to cover the immediate costs of senior housing and long-term care.
- Government-funded Long-term Care: You may be eligible for financial assistance through Medicaid. Medicaid can be used to pay for long-term medical care in all 50 states, with many states allowing residents to use it to pay for senior living communities.
- Home Equity Conversion Mortgage (HECM): Also referred to as a reverse mortgage, a Home Equity Conversion Mortgage is a type of loan for homeowners over the age of 62 that allows you to withdraw some of the equity in your home. The money collected from the reverse mortgage can be used to pay for nursing care.