How Can My Patients Afford Senior Living?

1. The patient may consider utilizing the Veterans Aid and Attendance Benefit.

Veterans and their surviving spouses may be eligible for a benefit called Veterans Aid and Attendance, which can help with a portion of assisted living and skilled nursing costs. If your patient is eligible for a U.S. Department of Veterans Affairs (VA) pension and requires aid from another person, they may qualify for this benefit, in addition to their monthly pension.

Your patient may qualify if they receive a VA pension and meet one of the following criteria:

  • Your patient needs outside assistance to help them perform daily activities. This includes bathing, dressing or feeding.
  • Your patient stays in bed for most of the day due to illness.
  • Your patient is in a skilled nursing facility due to the loss of mental or physical abilities from a disability.
  • Your patient’s eyesight is limited, specifically if they have 5/200 vision or worse in both eyes or concentric contraction of the visual field to 5 degrees or less, even with glasses or contact lenses.

2. The patient may consider either using long-term care insurance or converting a life insurance policy.

Long-term care insurance is an option that may help your patient pay for homemaker services and residential care. It is often purchased by people in their mid-50s and -60s who want to plan ahead, and people who expect that Medicare will not fully cover their care. For example, Medicare on average pays for only 22 days in a nursing facility. The average long-term care insurance policy may be used to cover residential care, including

  • Nursing home/skilled nursing facility
  • Assisted living
  • Residential care homes
  • Memory care
  • Continuing care retirement communities
  • Veterans care

Once a long-term care policy is triggered, funds are made available directly to policyholders to pay the assisted living company of their choice. If your patient needs assistance understanding their insurance policy, ask them to call their insurance broker for help. Brookdale associates are also available to help guide them in this process.

Alternatively, your patient may be able to convert an existing universal, whole, term or group life insurance policy to a pre-funded account to help pay for long-term care. This is a flexible option when it comes to financing senior living. Typically, many health conditions are accepted; your patient doesn’t necessarily need to have a terminal illness to qualify.

The benefit may also be adjustable, so monthly payments could be altered to meet your patient’s changing healthcare needs.

Potential Benefits of a Life Insurance Policy Conversion:

Typically, life insurance policy conversions offer

  • No waiting period
  • No premium payments
  • No care limit
  • No cost to apply

3. The patient may consider a bridge loan or reversing their mortgage.

In a time of unexpected-emergency financial expenditure, there are two financial resources that may be able to help: bridge loans and reverse mortgages.

Bridge Loans: Many senior financial services provide short-term loans called bridge loans that may help cover senior living costs while your patient waits for the sale of their home or other benefits to kick in. Bridge loans may make it possible to transition to senior living more quickly.

Typically, the conditions of these loans state that the loan must be repaid once funds are available. Brookdale has a relationship with multiple financial institutions who may be able to assist potential residents with loans of this type.

Potential Benefits of Bridge Loans:

  • The approval process is usually quick.
  • Funds typically process within 24 hours and can be wired directly to a senior living community.
  • Many senior living providers, including Brookdale, may assist with coverage of interest on the bridge loan.
  • Most lenders allow up to six applicants to split the loan, making it a good option for families.

Reverse Mortgages: A home equity conversion mortgage — also known as a reverse mortgage — may allow for your patient’s health needs to be met in assisted living while their partner can remain at home.

Here’s how it works: A reverse mortgage allows your patient to tap into a tax-free cash flow that can be used for expenses such as assisted living or long-term care insurance while maintaining ownership of their home. Securing a reverse mortgage is a big decision, so it’s important your patient talks to a financial advisor or attorney to weigh the pros and cons. The U.S. Department of Housing and Urban Development (HUD) provides counseling services to help individuals find a reputable lender.

Reverse mortgages aren’t the best choice for everyone, as they can take some time to set up, but they may generate cash flow for a better quality of life without needing to sell a home.

Potential Benefits of Reverse Mortgages:

  • Individuals maintain ownership of their homes.
  • There are no restrictions on how the money can be used.
  • Reverse mortgages are regulated by the U.S. Department of Housing and Urban Development (HUD).
  • Income from a reverse mortgage is tax-free and doesn’t affect Social Security or Medicare benefits.

4. The patient may evaluate Medicare coverage.

During open enrollment for 2019 coverage, 71% of eligible adults did not reevaluate their Medicare coverage from the previous year. Although Medicare does not cover the cost of senior living communities, it may include inpatient hospital stays, care in a skilled nursing facility, hospice care and some home health care

Medicare is divided into four plans that cover a variety of services relevant to seniors:

  • Part A: Hospital insurance that covers inpatient hospital stays, care in a skilled nursing facility, hospice care and some home health care.
  • Part B: Medical insurance that covers certain doctors’ services, outpatient care, medical supplies and preventive services.
  • Part C: Medicare Advantage Plans offered by private companies that contract with Medicare to provide Part A and Part B benefits. Many Medicare Advantage Plans offer prescription drug coverage too.
  • Part D: Prescription drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private-Fee-for-Service Plans, and Medicare Medical Savings Account Plans.

Some Medicare Advantage plans have now expanded to include supplemental benefits that would make short-term respite stays with a contracted senior living community more accessible for those recently discharged from hospital care.

To help educate your patient about different types of Medicare coverage, we’ve compiled a list of FAQs. Visit Brookdale.com > Where to Begin > Financial Planning > Understanding Medicare Coverage.

A long-term senior living solution can be a significant financial investment, but if you think someone in your care could potentially see a benefit, it’s appropriate to start the conversation, and we’re doing all we can to make that conversation easier. If you or your patient have further questions, contact us today.

The above content is shared for educational and informational purposes only. The content is not intended to be a substitute for professional or financial advice and should not be relied upon for making financial or other decisions. Please consult your attorney or financial advisor before acting on any content in this material.

The above content is shared for educational and informational purposes only. The content is not intended to be a substitute for professional or financial advice and should not be relied upon for making financial or other decisions. Please consult your attorney or financial advisor before acting on any content in this blog.


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