How Much Does Assisted Living Cost?

It’s an unfortunate part of life: no matter how hard we try, we all age. Sometimes, we eventually require help performing everyday tasks like housekeeping or getting dressed.

When this happens, the common fear is that we’ll lose our independence.

However, that doesn’t have to be the case. Depending on your required level of care, assisted living can offer a favorable compromise: your own living space in a safe facility with a 24/7 staff available to help. Assisted living facilities are a perfect combination of independent living and in-home care.

Of course, this can become expensive. Luckily, a few options can help cover certain costs and reduce your tax burden.

To help, we’re providing an overview of assisted living, what kind of care it offers, and the costs associated with living in such a facility.

What is assisted living?

Assisted living is a solution for those who require long-term medical care while retaining their independence. Several types of assisted living exist, all under different names. Most take the form of assisted living communities.

They often mimic common residential living spaces like apartment buildings or gated communities. They also keep a trained staff on premise to help residents when needed.

Typically, the residents of assisted living facilities need help with the activities of daily living (ADL) but can otherwise live independently. This allows them to inhabit their own space and maintain an active social life with their fellow residents or host friends and family members when they visit the facility.

These facilities are designed with their residents in mind. They usually offer games, social gatherings, and other activities to help residents maintain an active lifestyle.

Care offered at assisted living facilities

Residents often receive personalized care and living assistance. The facility assesses residents as they move into the community to determine what kind of medication, exercise, and other care they might need.

Most commonly, assisted living facilities offer senior care and assistance. This includes administering medication and helping residents perform ADLs. For instance, residents might need help bathing, using the restroom, dressing, or caring for the house. The staff is trained and licensed to perform such tasks and is available to the residents 24/7.

However, these are not skilled nursing facilities. Because many different types of facilities exist under different names, it’s not always immediately apparent whether one offers the care you need. If you need a higher level of care, please consider researching facilities to determine whether they can meet your needs.

How much does assisted living cost?

Assisted living costs typically fall under two categories: rent and care. Like any other living space, the rent can depend on location and apartment size. Your specific facility and the care services required can further impact costs. As a result, how much your pay for assisted living can vary greatly. Because residents typically need assistance daily, the costs can add up to an expensive monthly bill.

Consider this: According to the Genworth Cost of Care Survey, Missouri’s average cost of assisted living is $3,000 per month. In Washington, DC, it’s just under $7,000 per month. The other states fall somewhere in between. This means your annual costs can swing anywhere from $36,000 to over $83,000 annually, with a median yearly cost of $54,000.

Then, there are the hidden costs. For instance, the facility might require a move-in fee. Moving could incur the costs of hiring movers, renting a storage unit, or hiring a real estate agent to sell your former home. If you had a reverse mortgage loan on your home, you might need to pay it back upon moving out.

Does insurance or medicare cover assisted living?

Depending on your retirement plan or savings, you might be able to afford assisted living on your own. If not, there are some options to help you cover the costs. However, most of these options only cover some of the expenses incurred by assisted living.

Some options to help ease the costs of assisted living include:

Medicaid

Medicaid is run jointly between federal and state governments. Because of this, coverage and eligibility can vary depending on your state of residence. Most states’ Medicaid plans don’t fully cover assisted living.

In that event, you might consider a Medicaid waiver. These waivers allow some states to cover additional products and services that don’t fall under the rules and regulations of Medicaid. Section 1915(c) waivers are Home and Community-Based Services (HCBS) waivers. These waivers help patients receive short- or long-term care in private homes or communities such as assisted living facilities and nursing homes.

However, even with waivers, Medicaid typically only covers a small portion of assisted living costs.

Medicare

It’s a government-sponsored healthcare plan, but does Medicare pay for assisted living?

Unfortunately, it’s a mixed bag.

Medicare usually covers a higher level of care not offered by assisted living facilities. The options here are minimal. For instance, Medicare Part A might cover care services like physical therapy. A healthcare professional might be able to help you determine if any care you receive is covered.

If you reside in a skilled nursing facility, Medicare could cover up to 100 days of care for each benefit period. If your care exceeds 100 days, you must wait until the next benefit period to resubmit a claim.

If you have a Medicare Advantage Plan through a private insurance company, it may cover some of your care costs. While advantage plans are legally required to cover all the same services as Original Medicare, some insurance companies offer additional benefits. These added benefits will differ depending on your insurance provider, so consider checking your policy to see what costs they can cover.

Long-Term Care Insurance

When it comes to long-term care insurance, you have several options. Some companies offer insurance that covers some costs of assisted living. In some cases, they might offer a facilities-only option that only covers the costs of care received within an assisted living facility.

However, these policies come with a few catches.

For instance, many have a maximum age requirement. In this case, you can only sign up for care before you reach a certain age. If you wait until you need assisted living, you might be too old to sign up. If you have a facilities-only option, it only covers costs received in a licensed facility. If your facility isn’t licensed, insurance won’t cover your care.

So, insurance can help, but it’s best to check your policy to determine how much.

Does assisted living impact my taxes?

If you live in an assisted living community, some of your care might qualify for tax deductions. Some qualified deductions include the following:

• Medication costs
• Facility entrance or move-in fees
• Transportation to doctor appointments or other medically-needed travel
• Therapy and mental health costs
• Health insurance premiums

This list is not at all comprehensive. A tax professional can help determine if any services you’ve received qualify for a tax deduction.

Even if you do receive qualifying care, you must still meet a few requirements.

For one, you must itemize your taxes. The patient must be certified “chronically ill” by a licensed medical practitioner. Then, a licensed practitioner (or social worker) must prescribe a healthcare plan for the patient.

If you pay for the care of a qualified relative (parent, grandparent, etc.), you may be eligible for a tax deduction. To qualify, you must A). be the only person claiming the relative as a dependent and B). pay for at least 10% of a Multiple Support agreement that covers more than 50% of the patient’s assisted living costs.

However, you might still consider the standard deduction. You might receive a bigger tax return with the standard deduction than you would by itemizing your taxes.