Assisted Living Options for Low-Income Elders

Assisted living facilities are an excellent option for elderly adults who are no longer able to live alone in their home, but don’t require the around-the-clock care provided in a nursing home. Unfortunately, it can be incredibly challenging for elders and their families to find affordable assisted living. The high cost associated with many assisted living communities can cause a huge financial strain for many people, but especially for those individuals with lower incomes.

Fortunately, various forms of financial assistance to help cover the cost of assisted living are available for those who qualify. But for many individuals, the process of determining which forms of assistance they’re eligible for and exactly what it covers can be a long and confusing process.

While the costs of assisted living and the financial assistance available for low-income elders vary from state to state, there are resources available for seniors across the country. Read on to learn about some options that can help you or your loved pay for assisted living.  

Assisted Living Costs

The cost of assisted living varies depending on the facility. The size of the apartment, the location of the community, and the services the resident requires will affect the total cost of living. Monthly rent is also affected by a facility’s services such as food and dining, personal care, housekeeping, and optional activities and amenities like transportation, outings, and classes.

Different assisted living communities charge for rent and additional services in various ways. Depending on the facility, residents will either pay for an all-inclusive living arrangement or pay fees for individual services on an a la carte basis. With all-inclusive pricing, residents pay one fee that includes their rent, their meals, and services such as access to a fitness center, transportation, housekeeping, and any other amenities the facility offers. With a la carte pricing, residents only pay for the services they will use. Which option is more cost-efficient depends on the resident. For those who intend to use the majority of services that a community provides, it’s usually cheaper to pay all-inclusive. But if residents intend to cook their own meals and do their own housekeeping, it may be cheaper to pay per service each month.

According to Genworth Financial, the average monthly cost of assisted living in the United States is $4,000. However, the cost can be dramatically different from one place to another with monthly average costs as high as $6,000 in the Northeast and as low as $3,000 in the Midwest. If residents also need memory care, they can expect to add on an average of $1,200 per month because of the additional staff and resources this type of care requires.

Additional Residential Care Options

Residential Care Homes

Another possibility for elders is a residential care home, also known as RCFE (residential care facility for the elderly), adult day home, board-and-care home, or personal care home. These small group settings provide basic services (usually meals and light assistance) at a much lower cost than typical assisted living communities or nursing homes.

The smaller, intimate setting may feel more like home than a larger community which can help make the transition easier for many seniors. These types of residences are usually located in houses rather than in large complexes and within neighborhoods. However, the smaller setting means that more advanced care options like memory care aren’t always available, so this choice isn’t fitting for all seniors. Medicaid may also pay some of the cost for residents who meet eligibility requirements.

Assisted Living Conversion Program (ALCP)

Since 2012, HUD has channeled $26 million in grant funding to owners of multi-family housing developments in Arizona, California, Colorado, Connecticut, Massachusetts, Minnesota, New York, Ohio, and Texas. These funds have been used to convert existing units into affordable apartments for seniors who need the types of support services assisted living provides, but still want to live independently.

The services provided in ALCP facilities must be comparable to the services typically provided in a licensed assisted living facility, such as help with housekeeping, medication, meals, and personal care. According to HUD, these services must be provided through a licensed or certified third-party service provider.

Eligible projects must also qualify as Section 202 or similar subsidized HUD housing, so the units may be more affordable than a typical ALF. This article explains ALCP in detail.

Defining Income Levels

Whether or not a senior qualifies for low-income status will depend on their income as well as their location.

According to the U.S. Department of Housing and Urban Development (HUD), the low-income limit is “80 percent of the median income for the county in which the person resides.” The median number refers to the midpoint of a range, not the average. So, if income levels for a senior’s county of residence range from, say, $15,000/year to $60,000/year, with $30,000 as the median of this range, a senior who receives $24,000/year (80% of $30,000) would fall into the low-income bracket.

While this definition of low income may still seem quite adequate to someone living at or below the poverty level, HUD makes two additional distinctions. The “very low-income” bracket is no more than 50 percent of the median income (which would be $15,000 in our example), and “extremely low-income” is just 30 percent or less of the median income (which would be $9,000 or under in our example).

When it comes to determining income, remember that the government is considering all income streams, not just the senior’s social security check. HUD counts income from pensions, retirement accounts, IRAs, insurance annuities, and assets such as real estate and cars when assessing eligibility.

Financial Assistance Options for Low Income Elders

The following public and private resources can help low-income elders and their families afford the cost of assisted living. Keep in mind that every assisted living community is a little different, so it’s always a good idea to speak with each facility to learn more about their payment options and what forms of assistance they are willing to accept.

Section 202 Program

Low-income seniors over the age of 62 may qualify to live in subsidized housing via HUD’s Section 202 program, which covers both independent and assisted living environments. Established in 1959, Section 202 is the only HUD program that provides housing exclusively for seniors. These properties are often owned by nonprofit organizations.

The rent-assisted housing is designed specifically to enable seniors and individuals with disabilities to live as independently as possible. Communities typically offer a range of services and activities to support seniors. This usually includes dining options, transportation, and housekeeping but some communities also offer fitness programs, nutrition support, and art therapy.

Although the federal government funds the program, funding is distributed at the state and county levels to nonprofit organizations to build affordable housing for seniors. Along with initial building grants, nonprofit organizations who develop Section 202 housing may receive rental assistance funds to allow them to remain solvent while accepting low rent contribution from residents.

Anyone who is over the age of 62 and qualifies as very low-income based on HUD standards may apply to live in Section 202 housing. Prospective residents will apply directly through the community or facility that they are interested in. To learn more about Section 202 housing that is available in your area, visit the HUD inventory page.

Veteran’s Benefits

Veterans and spouses of veterans may qualify for aid from the U.S. Department of Veterans Affairs. Although the VA does not pay a veteran’s rent, it may cover some of the services provided by an assisted living facility. Known as Aid and Attendance (A&A), this benefit is a monthly, needs-based payment above and beyond the VA pension that can help cover the costs of long-term care. It is important to note that a veteran or surviving spouse may only receive Aid and Attendance or Housebound benefits (if they are unable to leave their home), not both at once.

As of  December 1, 2018, through November 30, 2019, to be financially eligible for A&A:

  • A single veteran must have countable income at or under $22,577 a year
  • A veteran with a dependent or spouse must have countable income at or under $26,765 a year

In order to qualify for A&A benefits, a veteran must meet one of the following criteria:

  • Need assistance with activities of daily living (ADL) such as bathing, dressing, eating, or adjusting prosthetic devices;
  • Be bedridden;
  • Reside in a long-term care facility due to mental or physical incapacity;
  • Have severe visual impairment, with a correction of 5/200 or less in both eyes, or concentric contraction of the visual field to 5 degrees or less.

To apply for A&A benefits, contact your state’s Pension Management Center or visit your local regional benefit office. Since eligibility can vary depending on the state, you should contact your local VA benefits office to find out if your loved one qualifies. In general, you’ll need evidence of need, which typically includes a detailed report from a physician explaining your difficulties completing ADLs. This article explains veterans’ benefits in more detail.

Long-Term Care Insurance

Long-term care insurance, or LTCI, can be tricky. While it appears to be a natural hedge against a future possibility of becoming ill or disabled, long-term care insurance is not a catchall solution.

LTCI premiums can be as steep as the cost of care itself, meaning that there is no real financial advantage to it. Additionally, the type of care that is covered varies depending on the given policy, and some essential components of care aren’t actually covered at all.

For example, a “facility-only” policy covers care in a licensed assisted living facility or in a skilled nursing facility, but not in an unlicensed facility or in your own home. Many policies do not cover the cost of memory care. And, there is usually a “waiting” or “elimination” period before someone is able to access funds. The shorter the elimination period you select, the more expensive the premiums.

In some cases, LTCI providers also require a physical evaluation performed by the physician of their choosing before coverage is awarded. Whether or not the elder qualifies for coverage may depend on whether or not they’re capable of independently performing at least two activities of daily living. So, it’s incredibly important to understand exactly what the policy covers and the total costs associated with it before it’s purchased. You can learn more about LTCI here.

Medicaid

There are several different Medicaid programs that provide financial assistance for assisted living. Home and Community Based Services (HCBS) Waivers and 1915 Waivers are the most common form of this assistance and, as of 2019, are available in 44 states. This coverage is expected to continue expanding until it’s available in every state. While some states are transitioning away from waivers to managed care programs for assisted living coverage, residents of those states will still receive the same level of benefit from the program.

Despite many states providing Medicaid benefits for assisted living across the country, these benefits and the eligibility requirements for them vary greatly from state to state. Some states have strict regulation on the size of the assisted living community while others will only cover personal care. To learn more about what programs are available in your state and how to apply, contact your state’s Medicaid office.

Non-Medicaid State Assistance

Many states across the country have benefit programs available to help elderly individuals cover the cost of assisted living. These programs are quite different from state to state, providing different benefits and having different qualifying standards. In some states, money is provided to the recipient and can be used however they see fit, including paying for assisted living care. Other states have more direct forms of assistance, running their own assisted living communities and providing rooms to qualifying individuals at a price that’s much less than a privately run home.

For more information on programs available in your area and eligibility guidelines, contact your local Area Agency on Aging.

Social Security

Social Security doesn’t directly pay for the cost of assisted living facilities, but individuals and their families can still benefit from it. Beneficiaries are able to use the money they receive to pay for the expense of an assisted living facility. Additionally, if the beneficiary resides in an assisted living facility, many states will increase the monthly amount to help cover the cost. As with other programs, the specific benefits and eligibility guidelines can be vastly different from state to state, so it’s a good idea to get in touch with your local Social Security office.  

Finding Appropriate Housing in Your Area

Of course, your final decision on a facility will depend on more than cost alone. You’ll want to find a community that fits the needs of your loved one in a convenient location that will also keep them happy and fulfilled each day. HUD has compiled an exhaustive multifamily inventory of housing units for the elderly and persons with disabilities. Though not all housing units qualify as assisted living, they are all subsidized HUD housing for seniors and persons with disabilities. You can click the link for your state, and begin to make inquiries at locations that sound promising.

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