Many times, children of aging parents are suddenly faced with the reality of placing their mom or dad into a long-term care environment, without knowing how to pay for assisted living, skilled nursing, or other senior living options.

Too many families do not plan in advance and are often shocked at how expensive assisted living can be.

While some make the mistaken assumption that assisted living will be covered by health insurance, they are devastated with the realization that the cost will be coming out of their own pockets. Without thoughtful advanced planning, the out-of-pocket expenses for an aging loved one can be financially devastating.

While there are many options, most families choose these ten common ways to cover the costs when deciding how to pay for assisted living.

Senior Home Transitions can help you find the type of community that can fit into your budget and care needs.

1. Private Pay

Private pay essentially means you get a bill each month and you write a check for the cost of care and services. The money may come from personal savings or assets from either the aging adult or their children.

When deciding how to pay for assisted living, covering the costs through private funds can be a simple, but expensive option in Louisville, KY.

In general, the average cost of assisted living can be around $3,500 per month. This will increase for skilled nursing or memory care, which requires a higher level of care. Even a well-prepared savings account can be drained very quickly.

If you choose private pay, be sure to start thinking about how to pay for assisted living early.

2. Long-Term Care Insurance

Long-term care (LTC) insurance is an insurance policy designed to cover the costs of nursing-home care, home health care, and/or adult daycare for individuals aged 65 or older or with a chronic or disabling condition that needs constant supervision.

However, each policy is vastly different from another, and the coverage, qualifications, rules, and exclusions can vary widely.

Oftentimes, these policies pay a fixed dollar amount and are not an option for anyone who is already disabled or has been diagnosed with an illness.

Long-term care insurance will help cover the costs when deciding how to pay for assisted living in Louisville, KY.

How To Get LTC Insurance?

If you’re interested in buying a long-term care insurance policy, you may purchase directly from an insurance company, or through a long-term care policy at work.

You start by filling out an application and answering a variety of health questions. The insurer may ask to see medical records and interview you by phone or face to face. Once you are approved, you’re responsible for paying a monthly payment to keep the policy active.

While there are no age requirements to purchase long-term care insurance, those who wait until the need for care is imminent usually find that it’s too late to purchase.

Eligibility and price are based more on health than age and not all people will qualify. Applicants must be in good health without any signs of dementia, a progressive neurological condition, or stroke.  

How To Use LTC To Pay for Senior Living? 

To use a long-term care policy (LTC) to pay for assisted living, you first must choose a facility that is approved by your insurance company. Some plans will reimburse seniors and others will make payments directly to the service providers.

When deciding how to pay for assisted living, make sure your plan covers everything you need.

3. Reverse Mortgage

A reverse mortgage is essentially a loan based on the equity in your home.

When deciding how to pay for assisted living, a reverse mortgage may not be the best choice in Louisville, KY.

You can borrow against the equity you already have, and your lender will either pay through a lump sum or a monthly payment until the principal limit is reached.

However, we never recommend this because if you stay in your home and exhaust all assets, you leave yourself with no options for care when the money runs out other than a Medicaid bed in a nursing home, and there are physical qualifications you must meet for that. Be mindful of this when considering how to pay for assisted living.

4. VA Benefits

If you are a United States Veteran, you qualify for medical care through a Veterans Affairs medical facility. These are often referred to as a “VA Facility.”

However, due to the overwhelming demand, these facilities often have long waiting lists and priority is always given to urgent conditions and service-related health issues and injuries.

Be sure to enrolled in the VHA when deciding how to pay for assisted living in Louisville, KY.

How to get VA Benefits 

When applying for VA benefits for the first time you must submit a copy of your discharge paperwork, which shows your service dates and type of discharge. If you don’t have this paperwork, you can simply provide your full name, social security number, branch, and dates of service and the VA can look it up for you.

Once you are enrolled in the Veterans Health Administration (VHA), you may apply to live in a VA community living center, Armed Forces Retirement Home, or state veterans’ home — all of which offer care services typically found in assisted living communities.

How to Use VA Benefits to Pay for Senior Living

Veterans and surviving spouses who are eligible for a VA pension may also qualify for additional monthly payments through the Aid and Attendance benefits. These funds can be used toward assisted living costs. Your eligibility for most VA benefits is based on discharge from active military service under other than dishonorable conditions.

Check with the VHA to see if you are eligible for VA pensions when discussing how to pay for assisted living.

5. Medicaid

Medicaid is a joint federal and state program that provides health coverage to low-income individuals. Several states do have to stay within federal guidelines, but Medicaid services and coverage vary greatly by state.

When discussing how to pay for assisted living, Medicaid can help those who otherwise may not be able to afford it in Louisville, KY.

How to Get Medicaid

In order to qualify for Medicaid coverage, you must meet the financial criteria and the functional needs. Essentially, a doctor must certify that a senior’s need for care in an assisted living facility is “medically necessary” and the senior must be living below the poverty level.

If a senior meets all financial and functional eligibility requirements, they must then find an assisted living facility that accepts Medicaid as payment.

How to Use Medicaid to Pay for Assisted Living

When you are approved for Medicaid, the facility will send the bill directly to the Medicaid office for reimbursement.

Typically, Medicaid will cover moving to nursing home facilities, assisted living, and memory care. However, you may still be required to pay for some out-of-pocket expenses, depending on the level of care and the coverage options.

This is not available in some states, so be mindful of this when deciding how to pay for assisted living.

6. Medicare

Basically, Medicare is subsidized health care for those over the age of 65. Every day, nearly 10,000 Americans age into the Medicare program. It is the primary health insurance provider for seniors in America, but it doesn’t fully cover any form of assisted living.  When deciding how to pay for assisted living, be sure to consider other options to cover the cost that Medicare doesn’t.

When discussing how to pay for assisted living in Louisville, KY, Medicare can help cover part of your bill.

How to Get Medicare

You can apply for Medicare as soon as you turn 65 years old. Those younger than 65 may be eligible for Medicare if they have been disabled for over 24 months, are diagnosed with end-stage renal disease, or have Lou Gehrig’s (ALS) disease.

Once you are approved, your coverage is broken down into two main parts: Part A (Hospital Insurance) and Part B (Medical Insurance). There are also supplemental plans and gap coverage you can purchase for an additional cost.

How To Use Medicare to Pay for Senior Living

Medicare will pay for 100% of the cost of care up to 20 days at a skilled nursing facility and approximately 80% of the cost up to 80 more days. The care must be for recovery following an overnight inpatient hospital stay.

Medicare does not cover any cost of room and board or personal care in assisted living, but it will pay for the medical costs, such as physical therapy, incurred while in assisted living. When discussing how to pay for assisted living, Medicare can help cover a good portion of the cost.

7. Supplemental Security Income (SSI)

SSI is a federal program that provides monthly payments to meet basic needs for food, clothing, and shelter.

Beneficiaries who are eligible for the federal SSI benefit can receive up to approximately $225 each month to be put toward the cost of room and board in assisted living or adult foster care. While this benefit may be helpful, it’s not enough to cover the full costs of assisted living.

SSI can cover a small part of the costs of assisted living in Louisville, KY.

How to Get Supplemental Security Income

The application process for SSI is different in each state. In some states, eligibility for Medicaid automatically determines eligibility for SSI. In other states, they are separate.

In Louisville, KY, the administering agency is the Cabinet for Health and Family Services Local office. Anyone can apply for SSI and there is no charge. Check out if you’re eligible through an online screening you can find at

If you are eligible, visit the website and apply online providing all necessary documentation. If you prefer, you can also call your local office and schedule a telephone appointment to file for benefits.

How to Use SSI For Senior Living

Supplemental Security Income is a cash payment made monthly directly to eligible individuals.

There are no restrictions on how SSI payments can be spent.

These benefits can be used to pay for home or adult daycare, assisted living or nursing home care, and/or home modifications and medical equipment to enable aging in place.

8. Life Settlements

A life settlement is essentially the sale of a life insurance policy. The market value of a life insurance policy is typically higher than the cash surrender value and better than allowing a policy to lapse.

People who qualify for life settlements are usually 65 or older and have a policy with a face value of $100,000 or more.

If you have a life settlement in Louisville, KY, it may be easy to decide how to pay for assisted living.

How To Get Life Settlement Policy

The best way to get a life settlement is to use a broker who will manage the process for you and get you the highest bid for your policy.

The payout will be based on the age and life expectancy of the policyholder and the cash surrender value of the policy.

A life settlement may pay 2-7 times more than the cash surrender value.

How To Use a Life Settlement Policy to Pay for Senior Living

Life settlements are paid out in a single lump sum. There are no restrictions on how a life settlement payment may be used. Once you receive the money, you can pay for assisted living in full, quarterly or monthly.

9. Social Security

Social Security provides retirement income for almost everyone that has worked legally in the United States. Approximately one-third of all retirees look to Social Security for nearly all of their income.

Social security allows most working Americans in Louisville, KY to confidently know how to pay for assisted living.

How To Get Social Security

You can create a free account with the Social Security Administration (SSA) online or by telephone. To qualify for retirement benefits you must be 62 years old with 10 years or more of working in the United States legally.

How To Use Social Security to Pay for Senior Living

After your application has been filed and approved, you will receive an estimate of earnings based on your work history. Your social security payments are made via direct deposit. While you can apply for additional financial assistance through optional state supplements, it is unlikely that social security will be enough to cover the costs of assisted living entirely.

10. Loans

You may choose to take out a line of credit on your home prior to its sale to pay for the assisted living expenses of a family member. These loans can vary widely in their requirements, qualifications, and interest rates.

Be sure to check all the features and benefits of a loan before deciding how to pay for assisted living in Louisville, KY.

This is a personal decision that should not be taken lightly. Before taking out a loan, obtain a pre-approval from several banks to determine which ones have the features and benefits that are most essential to your financial success.

FAQs About Assisted Living Payment Methods

Most people—90 percent—pay for assisted living through private pay options, which means they receive no government benefits or assistance to cover the cost.

Yes! You can cash in your life insurance policy to fund your assisted living costs. This is typically done through a life settlement, which will net more than the policy surrender value.

You may be able to qualify for a “bridge loan” which uses your current home’s equity to pay for assisted living expenses until the home sells.

Finding Affordable Elder Care Near You 

In the many years that we have worked with senior transitions, we understand the complexities involved in deciding how to pay for assisted living. We hear countless messages and witness the frustration experienced by seniors and their families.

If you or a loved one need help, talk to us before the services and care are actually needed. We can help you and explain all of your options clearly and help you figure out how to pay for assisted living.

Our services are free and valuable as you plan for your future needs. Call today to learn more!