If you have a loved one living with Alzheimer’s disease or another type of dementia, you’ve likely heard of a type of senior living community called memory care. Memory care communities are designed specifically to support and nurture those with dementia, but as is the case with any specialized care, the cost can be considerable. According to AARP, the 2021 statistics from the National Investment Center for Seniors Housing & Care (NIC) put the average memory care rent at $6,935 monthly. While every family wants the best care for their loved one, this cost is daunting for many. However, that doesn’t mean it’s out of reach. These options can help in paying for memory care.
Offsetting the Cost of Memory Care
Depending on your specific circumstances, there may be help available to offset the cost of memory care for your loved one. Here are the most common options.
Veterans Aid & Attendance Benefit
A wartime veteran or their surviving spouse may be eligible to receive this non-service-connected benefit to help in paying for memory care in Hillsborough Township. The benefit starts with the basic pension and, depending on medical need, gives your loved one a rating that could add more money to their monthly pension. But your loved one must meet the military service criteria as well as the medical requirement AND the financial requirement to qualify.
Long-Term Care (LTC) Insurance
LTC insurance can help your loved one in paying for memory care by covering services typically not covered by health insurance, Medicare, or Medicaid. Many LTC policies begin to pay benefits after an assessment has determined that your loved one needs help with two or more Activities of Daily Living or has cognitive impairments (known as a benefit trigger). However, there will be an elimination period, typically 30, 60, or 90 days after the benefit trigger occurs before receiving payments. During this time, your loved one may need to cover the cost of services they receive out of pocket. Also, keep in mind that policies may only pay up to a pre-set daily limit until the lifetime max is reached. Finally, note that it is typically necessary to be in good health to qualify for LTC insurance, so your loved one would have had to have this policy in place before their dementia diagnosis.
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Life Insurance Conversion
If your loved one has an in-force life insurance policy, you may be able to transform it into a pre-funded financial account that disburses a monthly benefit to help in paying for memory care in Hillsborough Township. Unlike life insurance, this account is a Medicaid-qualified asset. The conversion process transfers ownership of a life insurance policy from the original holder to an entity acting as a benefits administrator. Because the original owner no longer holds the policy, it won’t count against your loved one in the Medicaid spend-down process. There are no application fees to apply for a life insurance conversion, and the typical enrollment time is 30-45 days. Once converted, the benefits payments should start immediately.
A reverse mortgage is a type of home equity loan that’s specifically for homeowners 62 or older. It may make sense as an option to access the equity in your loved one’s home to help in paying for memory care. If your loved one meets the age requirement, owns their home, or has a small mortgage, and the house meets FHA property standards as well as flood requirements, they may be eligible. Then, the lender makes payments to the borrower based on a percentage of your loved one’s accumulated home equity. Remember that the loan will need to be repaid when the borrower dies, sells the home, or permanently moves out.
Additional Considerations for When Paying for Memory Care
While we noted the average national cost of memory care above, keep in mind that the rent does vary greatly; memory care in Hillsborough Township can average more than $8,000 per month. What your family will be paying for memory care depends on factors such as geographic location, level of care, and whether your loved one has a private versus semi-private room.