Can Your Loved One Afford Assisted Living?
October 06, 2018
By Linda Snyder, Senior Care Advocate, Reflections Memory Care
Your elderly parents have made the decision to move into an assisted living community for health and mobility issues. They have social security, savings, and a pension to help pay for their apartment and level of care services needed. But, what if that is not enough to leave them funds for that vacation they like to take each year or a medical emergency?
Sometimes, people have a false sense of security about what their insurance will pay. It’s important to know right up front that Medicare will not pay for assisted living. But, don’t give up all hope yet. There are a variety of helpful financial tools and programs to assist seniors and their families with addressing the affordability of assisted living you should investigate first.
Claim veterans benefits: Aid and Attendance Program
Veterans and their spouses may be qualified to receive payments from the Aid and Attendance Program of the US Department of Veterans Affairs. This is a benefit paid in addition to a veterans pension. For more information, contact your Veterans Regional Office or visit www.va.gov.
Long-term care insurance
If you have a long-term care insurance policy, it should cover assisted living as well. If there is a policy designated for home care, it should be able to be used for assisted living too. There are “facility-only” policies that cover care only in a licensed assisted living facility or skilled nursing facility.
Most insurance policies are very hard for the general public to understand, but knowing your benefits will be very helpful in making sure you get what you have paid for. It is very common for insurance companies to decline payment on the first go-round. Many times you or an advocate at the assisted living facility will need to contact the insurance companies and discuss these issues in order to get approval. To qualify most companies will require that you need help in at least two areas of ADL’s (Activities of Daily Living) such as bathing, eating, dressing, transferring from bed to chair, walking, and toileting.
Long-term care insurance benefits vary widely depending on the policy. Benefits can range from $1,500 to more than $9,000 per month.
Convert a life insurance policy: life care funding
The Life Care Funding Group offers to convert your life insurance policy into a long-term care benefit. There are no premiums or waiting periods for this life care assurance benefit. For more information, contact Life Care Funding Group at 1-888-670-7773 or visit
Share a suite
Consider the advantages of rooming with another resident as a more affordable option. Many residents appreciate and benefit from the added companionship with a friend or relative. Some apartments are shared at the Villas of Holly Brook by a mother and daughter, friends, and even a sister-in-law and brother-in-law to cut the apartment costs in half. Level-of-care expenses still apply for each resident. The real benefit is the companionship that has proven invaluable to these residents.
Tax deductibility of assisted-living expenses
You may be eligible to deduct all or a substantial portion of your monthly rent as a medical deduction from your yearly tax assessment. The cost of assisted living may be tax deductible as a medical expense for both residents and family members who provide financial support.
Internal Revenue Code Section 213 (a) provides an itemized deduction for unreimbursed medical expenses to the extent that such expenses exceed 7.5 percent of adjusted gross income. Treasury Department regulations state that the extent to which expenses for care in a facility other than a hospital are deductible depends on the condition of the individual and the nature of the services received. It does not depend on the nature of the facility.
The cost of medical care, meals, and lodging is deductible when the principal reason for residing at an assisted living community is for medical care. Medical reasons may include the following:
- Resident is unable to perform, without substantial assistance, at least two out of six activities of daily living (eating, toileting, transferring, bathing, dressing, continence) for a period of at least 90 days due to a loss of functional capacity.
- Resident requires substantial supervision to protect him or herself from threats to health and safety due to cognitive impairment.
When the principal reason for residing at an assisted living community is not medical care, medical costs may be deductible, but meals and lodging expenses are not deductible.
Claiming resident as a dependent
If a family member pays for all or a portion of the cost of the facility, he or she may be able to take the medical deduction if the resident of the facility qualifies as the payer's dependent.
Consult with a tax advisor to determine the potential tax treatment in your particular circumstances. Please refer to the Internal Revenue Code Sections 7702B(c)(1), 213 and 4980C and Notice 97-31, 1997-21, IRB, 05-06-97 at www.irs.gov.
The Villas of Holly Brook, Villas of South Park, and Reflections Memory Care communities offer a full range of personalized senior living services delivered by compassionate team members who are trained to encourage independence, preserve dignity, enable freedom of choice and protect the privacy of residents. To learn more about them, visit www.villasofhollybrook.com or call
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