Prior to discussing payment options for assisted living, it is important to recognize that assisted living residences primarily provide non-medical, personal care. In support of personal care, they also offer housekeeping, laundry, transportation, medication supervision, exercise programs and social activities.

 

Most assisted living communities offer residents the choice of all-inclusive or fee-for-service pricing.  All-inclusive means that a single monthly fee covers rent, meals and any additional services a resident chooses such as housekeeping or transportation.  Fee-for-service means a resident pays only for those services they use.  Typically, if a resident intends to use the full suite of services an assisted living residence offers, it is less expensive to choose the all-inclusive model.  If a resident will only require certain services, then the fee-for-service approach offers a better cost savings.  A more detailed review of assisted living pricing models is available here.

In 2013, the average amount being paid per month for assisted living is approximately $3,450.  Alzheimer’s or dementia patients pay an additional $1,150, or approximately $4,600 / month.  These averages vary dramatically in different states from approximately $2,700 in the South to $5,000 in the Northeast.  Find quality, low-cost senior living in your area, see a table of the average cost of assisted living by state or use our home care vs assisted living calculator.

For average Americans, assisted living fees are most frequently paid out-of-pocket.  Families typically use a combination of Social Security, Veterans and other pensions as well as their savings.  Another common approach is to use their home’s value either through a rental, a sale or a reverse mortgage to pay for assisted living (though a reverse mortgage will require one spouse to remain in the home).  A small number of families are fortunate enough to have long term care insurance, perhaps 5% of American seniors.  These individuals use those financial benefits to help with the cost of assisted living.

Medicare and Assisted Living
Medicare does not pay for assisted living, room and board, or personal care.  However, medical expenses incurred at an assisted living residence may be covered by Medicare just as they would if the medical procedures occurred in a doctor’s office, hospital or at one’s home.  

Medicaid and Assisted Living
As of 2013, Medicaid pays for some assisted living fees by way of Medicaid Home and Community-Based Services Waivers in the 42 states listed below.  Click here for assisted living waiver names and coverage details. In some states, Medicaid pays for only personal care services provided in assisted living and in other states, they also pay for room and board. 

The number of states offering Medicaid assisted living waivers is increasing rapidly and will likely be available nationwide in the coming years.  From the states’ perspective, for qualified individuals, assisted living is less expensive than skilled nursing homes and therefore legislation is being written to cover assisted living as it will save the states money.  Find assistance qualifying for Medicaid.

1.    Alaska 2.    Arizona 3.    Arkansas 4.    California 5.    Colorado 6.    Connecticut 7.    Delaware 8.    Florida 9.    Georgia 10.    Hawaii 11.    Idaho 12.    Illinois 13.    Indiana 14.    Iowa 15.    Kansas 16.    Maine 17.    Maryland 18.    Massachusetts 19.    Michigan 20.    Minnesota 21.    Mississippi

22.    Missouri 23.    Montana 24.    Nebraska 25.    Nevada 26.    New Hampshire 27.    New Jersey 28.    New Mexico 29.    North Carolina 30.    North Dakota 31.    Ohio 32.    Oklahoma 33.    Oregon 34.    Rhode Island 35.    South Dakota 36.    Tennessee 37.    Texas 38.    Utah 39.    Vermont 40.    Virginia 41.    Washington 42.    Wisconsin

Excluding Medicaid options, it is beneficial to think of financial assistance for assisted living coming in three forms.  The first form includes non-Medicaid federal and state programs that offer financial assistance.  The second form includes options or tactics that reduce the cost of living and care for the senior or their family so that those additional funds can be allocated to an assisted living residence.  The third form involves the liquidation or conversion of other assets so those resources can be applied towards the cost of care. Loans specifically design for assisted living are now available as well.  More information is available here.

Explore these programs and options by clicking the links in the table below.  Alternatively, use our Assisted Living Financial Resource Locator Tool to automatically determine which of these programs are available and relevant to your current situation.

Federal & State Programs	Cost of Living / Care Reductions	Asset Liquidation / Conversion
Colorado Old Age Pension Colorado Adult Foster Care Program Connecticut Assisted Living Program    Connecticut Congregate Housing Services Program    Florida OSS for Seniors Government Housing Assistance Maryland Assisted Living Subsidy MA Group Adult Foster Care Minnesota Group Residential Housing Program Ohio Residential State Supplement NC Adult Care Home Assistance North Dakota SPED and Ex-SPED PA Domiciliary Care Program Medicaid Supplemental Security Income SSI State Supplements RI Enhanced Assisted Living Program Rhode Island Home and Community Care Co-Pay Program VA Pensions Wisconsin SSI-E	Elderly and Disabled Tax Credit Federal Elderly Care Tax Credit Geographic Re-Location Medical Expense Tax Deductions State Elderly Care Tax Credit	Accelerated Death Benefit Death Benefit Loans Equity Key Family / Friends Loans Home Equity Line of Credit Life Settlement Reverse Mortgages Assisted Living Bridge Loans Viatical Settlements Life Care Assurance Benefit Plan

 

The Assisted Living Financial Resource Locator Tool consists of a series of questions that are used to narrow down the many options in our database to only those that are relevant to one's specific situation.  Those options and resources for which one is not eligible are also included in a separate column so that a comprehensive view is provided.  One can easily determine the reasons they might not be eligible.  Click here to use the Assisted Living Financial Resource Locator Tool.

Since many families pay for assisted living from their savings, they are in a state of continuously diminishing resources.  Many assistance programs determine eligibility based on an individual’s resources.  Therefore, the assistance available to an individual is constantly changing.  In other words, usually the longer a person resides (or is projected to reside) in assisted living, the more assistance that becomes available to them.

For this reason (and others), it is advantageous to develop a long term financial plan when considering assisted living.  Doing so has the dual benefit of ensuring a comfortable and consistent aging process for your loved one while at the same time maximizing your family’s assets and resources.  

The creation of financial plan for assisted living is a complicated process and one that must accommodate various health scenarios.  Fortunately, there are resources available to help families with financial planning for assisted living and each has its pros and cons.   

•    Public Benefits Counselors – local agencies such as Area Agencies on Aging and Aging and Disability Resource Centers have benefits counselors on staff that often can help with financial planning.   While they typically do not charge for their assistance, they are often under-staffed and unable to provide adequate long term planning.  They also tend to be very well-versed in local programs but may not have larger financial planning experience.  Find your local Area Agency on Aging and Aging and Disability Resource Center.

•    Geriatric Care Managers – GCMs help families create and implement long term care plans and as a part of that some will help with the financial side.  Since GCMs are typically paid for out-of-pocket, one can expect a higher level of attention than one might receive from a public benefits counselor.  Families tend to contact GCMs only after the need for care has become apparent and therefore GCMs are not in the best position to do long term planning.  Often GCMs come from nursing or public health backgrounds and do not have extension financial experience.  Find a Geriatric Care Manager.

•    Eldercare Financial Planners – Financial planners have the highest level of professional experience and are the most expensive option.  They are very knowledgeable with long term planning but may be less aware of local programs and short term options.  Find an Eldercare Financial Planner .


There are many different names for assisted living and while there may be some subtle differences between the names on this list, they can all be categorized as assisted living residences.

 

-Personal Care Homes -Eldercare Facilities -Domiciliary Care -Board and Care -Memory Care Facilities

-Residential Care Facilities -Community-Based Retirement Facilities -Adult Living Facilities -Senior Living Residences

-Adult Foster Care -Sheltered housing -Community Residences -Group Homes -Adult Family Homes

 

The cost of assisted living care can be very high and there exists a large range in the cost of assisted living between different states.  In addition to seeking out low cost, senior living residences, some families have begun to relocate to residences outside of their primary geographic areas in order to reduce costs. 

This table contains the average cost of assisted living for all 50 states and D.C. for 2013.  In addition, it contains an assisted living affordability index* which considers the cost of assisted living in a state relative to that state's median income.  This is an experimental index created to illustrate the variability of assisted living costs relative to the cost of living. The state’s rank out of 51 (includes Washington D.C.)  is in the 4th column.

Alzheimer's care in senior living residences in 2013 costs, on average, an additional $1,150 per month.

2013 State-by-State Assisted Living Costs
State	Avg. Monthly Assisted Living Cost	Assisted Living Affordability Index (lower #s are more affordable)	Assisted Living Affordability Index Rank
United States	$3,450	0.83
Alabama	$2,600	0.73	14
Alaska	$6,000	1.25	51
Arizona	$3,350	0.83	26
Arkansas	$2,865	0.83	27
California	$3,710	0.83	28
Colorado	$3,520	0.72	9
Connecticut	$5,000	0.92	35
Delaware	$5,533	1.21	50
District of Columbia	$3,500	0.76	17
Florida	$3,000	0.80	21
Georgia	$2,703	0.71	8
Hawaii	$4,200	0.85	29
Idaho	$3,198	0.81	22
Illinois	$4,050	0.96	41
Indiana	$3,705	1.00	42
Iowa	$3,150	0.75	16
Kansas	$3,490	0.91	34
Kentucky	$2,720	0.82	25
Louisiana	$3,150	0.93	36
Maine	$4,500	1.09	48
Maryland	$3,400	0.59	1
Massachusetts	$4,950	0.94	40
Michigan	$2,850	0.70	7
Minnesota	$3,350	0.70	6
Mississippi	$3,000	0.88	31
Missouri	$2,288	0.60	2
Montana	$3,600	1.07	47
Nebraska	$3,360	0.72	11
Nevada	$2,850	0.73	13
New Hampshire	$3,589	0.65	5
New Jersey	$5,994	1.15	49
New Mexico	$3,518	1.01	44
New York	$3,950	0.94	38
North Carolina	$2,900	0.77	19
North Dakota	$2,852	0.61	3
Ohio	$3,920	1.05	46
Oklahoma	$2,967	0.73	15
Oregon	$4,023	0.94	39
Pennsylvania	$3,175	0.76	18
Rhode Island	$4,148	1.02	45
South Carolina	$3,000	0.90	33
South Dakota	$3,036	0.77	20
Tennessee	$3,525	1.00	43
Texas	$3,336	0.82	24
Utah	$2,888	0.62	4
Vermont	$3,750	0.87	30
Virginia	$3,775	0.72	10
Washington	$4,250	0.90	32
West Virginia	$3,250	0.93	37
Wisconsin	$3,538	0.82	23
Wyoming	$3,300	0.73	12

*Data provided by Genworth Financial, Inc. (NYSE:GNW) and the US Census Bureau.