Assisted Living Costs and Ways to Pay

Assisted Living

Assisted Living Costs and Ways to Pay

Posted 03/15/2022By Alex Radulovic14 min read
The cost of senior and assisted living is one of the biggest concerns of seniors and their loved ones. There are a lot of variables and things that affect the cost of living, and, likewise, there are several ways to afford the lifestyle and care needs of seniors.

Are you thinking of placing a loved one in an assisted living facility? If so, you are likely trying to understand all the costs of senior living. In this article, we will break down all the expenses that come with assisted living. We will also provide some tips on how to budget for these costs. Keep reading for more information!

The Needs Assessment: A Key Step in Determining Assisted Living Costs

Every individual needs a different level of care for their loved one. To determine their financial need for care, a person with serious health issues should first assess their needs. This will give you a much better idea of how much you'll need to budget for assisted living costs.
Many community-based organizations can perform a needs assessment, but it can also be done informally by friends or family members. The physician can then contact your older parents or seniors who need care. Once care needs are defined, an initial pricing discussion usually follows.
Additionally, assisted living facilities vary in price.  Here are some key areas to consider when assessing a loved one's needs:

Level of Care

Senior living communities provide various levels of care, from basic assistance with activities of daily living (ADLs) to more intensive skilled nursing care. The necessary level of care will have a significant impact on cost.

Specific Diet

Some assisted living communities offer specialized diets for residents with diabetes, heart disease, or other conditions. This can add to the cost of food, but it may be worth it for the improved health of your loved one.

Medication Management

Many senior living communities have staff members trained to help residents manage their medications. This can be a big help for seniors who take multiple medications and can also help avoid dangerous drug interactions.

Access to Transportation

Some assisted living communities provide transportation for residents, while others do not. If your loved one needs transportation to doctors' appointments or other activities, this will need to be factored into their needs and the cost of senior living.

Determining your loved one's needs is an essential first step in choosing the right assisted living community. By assessing their needs, you can be sure that you're finding a community that can provide the level of care they require at a price you can afford.

How Much Does Assisted Living Cost?

You have to consider a few things when looking at the total cost of living in an assisted facility. The first is the type of care or levels of care your loved one will need. If they require more hands-on assistance, then the cost will be higher.

The community's average cost for a senior living facility is about $3,500 per month. However, this number does not include the potential for additional costs, like an entrance fee.
An entrance fee is a one-time payment ranging from a few thousand dollars to tens of thousands. The purpose of an entrance fee is to help offset the community's costs for those individuals who may need to move out or require a higher level of care sooner than others.

Some people may only require a community for a short period, while others may live there for several years. The entrance fee allows the community to keep its doors open for everyone.

You should also consider the Pricing Structure when comparing communities. Each community has different methods for calculating its fees. Some increase the monthly cost gradually as care needs increase, while others charge a set fee for all residents regardless of care needs.

When considering an assisted living community, ask about the community's policies on entrance fees, monthly costs, and care fees. This will help you to understand the community's pricing structure and make an informed decision about whether the community is affordable for your loved one.

Location Matters

The cost of assisted living can vary widely depending on your location. Assisted living near urban areas tends to be more expensive than those in rural areas. This is due to the higher cost of living in urban areas such as New York and the increased demand for assisted living services. For example, the average cost of assisted living in California is $45,000 per year, while the average price in Texas is $36,000 per year. Senior living near a rural area may be a better financial route if you're looking to save money.

Finally, the size of the unit can also affect the cost. The cost will be higher if you need a larger unit to accommodate your loved one's needs.

Considering these factors, you can develop a realistic budget for your loved one's assisted living costs.

Budgeting for Assisted Living Costs

If you are worried about how you will afford assisted living, you can do a few things to ease your financial burden. First, start saving as early as possible. It is never too early to start setting aside money for your loved one's future care needs.

Having a conversation with your loved ones about their wishes and needs is also a good idea. This will help you understand what type of facility they would be interested in ahead of time and what kind of care they would require.

It would help if you also consider purchasing long-term care insurance. This policy can help cover senior living costs, home health care, and other services.

What Is Long-Term Care Insurance?

Long-term care insurance is a type of insurance that can help pay for senior living. However, it is essential to note that not all policies are identical. Some policies will only cover a certain amount of the total cost, while others may not cover any of the costs at all. It is essential to read the fine print of any policy before purchasing it. This type of policy will help pay for senior living and other services.

The Cost of Long-Term Care

Many people are surprised that Medicare does not cover the cost of long-term care. Most health insurance plans do not cover long-term care costs. You will likely have to pay out of pocket for all or part of your loved one's senior living expenses.

Another way to budget for senior living is to look into community-based programs. Many communities offer free or low-cost services for seniors who need assistance with activities of daily living. These programs can help offset the costs of assisted living.

Finally, be sure to consult with an experienced elder law attorney. An elder law attorney can help you navigate the often complex laws surrounding senior living and long-term care. Proper planning ensures that your loved one receives the care they need without breaking the bank.

Assisted living can be a financial burden, but with proper planning, you can ease the strain on your budget. By saving early, purchasing long-term care insurance, and looking into community-based programs, you can ensure your loved one receives the care they need without breaking the bank.

7 Questions to Help Anticipate the Cost of Assisted Living

  1. What is the monthly rent for a unit in the facility?
  2. What is included in the monthly rent (e.g., utilities, meals, activities)?
  3. How much does each additional service cost (e.g., laundry, transportation)?
  4. Does the facility offer any discounts (e.g., for veterans or seniors)?
  5. What is the policy on accepting Medicaid?
  6. How often do rates increase, and by how much?
  7. What is the refund policy if my loved one needs to move out of the facility?

By asking these questions, you can better understand the potential costs associated with assisted living. This information can help you budget for the care you need and make informed decisions about what is best for your loved one.

Applying for an Assisted Living Waiver from Medicaid

If you or your loved one is over 65 and has an annual income of less than $27,756 for singles or $38,000 for couples, you may be eligible for an Assisted Living Waiver.  Sometimes, you'll have issues when comparing assisted living programs accepting Medicaid. To apply and see if you qualify, you must submit an application to your local Medicaid office.

Personal Care Assistance

Personal care assistance is one of the most significant costs associated with assisted living. The cost of personal care assistance can vary depending on the required type and frequency of services.

Assisted living communities offer a variety of personal care assistance and amenities, such as:

  • Bathing, dressing, and grooming
  • Medication management
  • Healthcare coordination
  • Housekeeping and laundry services

Take into consideration which of these your loved one may need in their facility. Personal care is an excellent option for seniors who need a little extra help with activities of daily living.

Nursing Care

Another significant cost associated with assisted living is nursing care. This type of care is typically required for those who need help with medication management, wound care, or other medical needs. The cost of nursing care can vary depending on the required type and frequency of services.

For example, community-based assisted living facilities typically charge less for nursing care than those that provide higher care. Seniors who need more frequent or complex nursing services may also pay more for their care.

Other Costs to Consider

In addition to personal care assistance and nursing care, there are other payments to consider when budgeting for senior living expenses. These include necessities such as meals, transportation, activities, and utilities. Most assisted living facilities include these services in the monthly fee, but not all of them.

Community is essential for seniors who need assistance with activities of daily living. Most assisted living facilities offer a variety of community amenities and activities, which they can add to the monthly fee. Some standard community amenities include a fitness center, library, beauty salon, and transportation services.

Utilities, such as electricity, gas, water, and trash removal, are also included in the monthly fee. However, some assisted living facilities may charge a separate fee for utilities.

Meals are another vital cost to consider when budgeting for assisted living expenses. Most assisted living facilities include meals in the monthly fee. However, some facilities may charge a separate fee for meals.

Transportation is another cost to consider when budgeting for assisted living expenses. Most senior living facilities offer transportation services. However, some facilities may charge a separate fee for transportation.

Activities are another cost to consider when budgeting for assisted living expenses. Most assisted living facilities offer a variety of activities, which can add to the monthly fee. Some everyday activities include arts and crafts, exercise classes, and social events.

Tax Deductions for Assisted Living Costs

The costs of assisted living are typically not tax-deductible. However, if your spouse or dependent has medical treatment at home, you may be able to deduct some of the costs associated with their care. You can visit the IRS website for more information on deducting healthcare expenses IRS IRS website.

It's essential to be informed about your tax deductions for assisted living. If your spouse has medical treatment at home and your dependent has other medical treatment, your costs will typically be deducted from the IRS.

You can file a list of all the taxes you owe, which may also limit your amount. Find additional info in IRS Health and Dental expense report.

Meet with an Admission Counselor

When meeting with an admissions counselor, ask about fees, so there are no surprises later. It's also essential to determine if the facility accepts Medicaid or other financial assistance.

Additionally, be sure to ask about the refund policy if your loved one needs to move out of the facility for any reason. This way, seniors who need to leave the nursing home for any reason won't get stuck with a huge bill. Doing your research in advance can ensure that you are prepared to pay for senior living.

What to Expect

The average cost of assisted living in the United States is $43,200 per year or $110 per day. However, this can vary greatly depending on the type of facility, location, and services required. In some cases, government assistance may be available to help offset the cost of assisted living.

The 10 Ways to Afford Assisted Living

Many people are concerned about how they will pay for assisted living. However, there are several ways to afford assisted living. Social Security, Medicare, Medicaid, pensions, VA benefits, cash savings, reverse mortgages, other annuities and investments, and long-term care insurance can all be used to pay for senior living for your loved ones.

Social Security

Social Security can provide some income to help pay for assisted living communities. In general, those who need a higher level of care may qualify for more benefits. Community-based care is less expensive than nursing home care, so it may be a good option for seniors who need assistance but do not require constant medical care.


Another way to afford assisted living is through Medicare. Medicare is a government health insurance program for people over 65 years of age or for people with specific disabilities.
Medicare does not pay for all the costs of assisted living communities, but it can help cover some of them.


Medicaid is another program that can help to pay for an assisted living facility. Medicaid is another government insurance program for low-income people.
In some states, Medicaid will pay for all the assisted living costs. In other states, Medicaid will pay for just part of them. However, Medicaid can be used as part of your payment plan.


Pensions are another income source that can help pay for assisted living. A pension is an income a person receives from a company after retirement. The pension amount is based on the person's years of service and salary.

VA Benefits

VA benefits are another income source that can help pay for assisted living. VA benefits are payments that are made to veterans of the armed forces. The benefit amount is based on the severity of the person's disability.

Cash Savings

Cash savings can also be used to pay for assisted living. Many people have savings accounts that they can use to pay for their living expenses. Dipping into a savings account can be a route for many loved ones to pay for their seniors.

Reverse Mortgages

Reverse mortgages are another way to afford assisted living. A reverse mortgage is a loan secured by the equity in a person's home. The loan must not be repaid until someone dies or sells their home.

Other Annuities and Investments

Other annuities and investments can also be used to pay for assisted living. An annuity is an investment that pays out a fixed amount of money each year. Assets can also be used to pay for assisted living. These include stocks, bonds, and mutual funds. Long-term care insurance is another way to pay for assisted living.

Long-Term Care Insurance

Long-term care insurance is a type of insurance that pays for long-term care. Long-term care includes the costs of assisted living, nursing home care, and home health care.


When budgeting for an assisted living facility, it’s essential to consider all of the patient's needs and potential costs; this includes rent, utilities, activities, transportation, and care services. Be sure to ask about all fees upfront when meeting with an admissions counselor so there are no surprises later. And finally, check to see if the facility accepts Medicaid or other financial assistance. By doing your research in advance, you are sure to be set up to find an assisted living facility for your loved one that is both affordable for your budget and appropriate for their needs.


How to afford assisted living on social security?

Social security does not explicitly pay for assisted living. If the resident is receiving social security benefits, it typically won't be enough to offset assisted living costs. Most people pay out of pocket using their money, assets, or long-term insurance policy.

Does medicare or medicaid cover assisted living?

Medicare does not typically pay for assisted living. Medicare is a health or medical insurance covering services in a clinical setting. Assisted living offers care in a home-like environment. If a physician indicates you require rehabilitation services or skilled nursing, Medicare will cover your stay for a defined duration. If your physician suggests you require hospice services, Medicare will cover your hospice care needs in your home or a facility you live in.

How do people pay for assisted living?

Most assisted living residents to pay with their funds or out of pocket. People with limited income may qualify for financial assistance through Medicaid, a federal and state program. US Military veterans may be eligible for Aid and Attendance. Some residents may have purchased a private long-term-care insurance policy to cover some or all of their assisted living expenses. Others may take out a reverse mortgage on their home, cash out life insurance options, and have other sources of saved money, pensions, or annuities. Most communities will accept a personal check or an electronic funds transfer. Some (not all) communities accept credit cards but are prepared to pay a fee from the community for this service.