Paying for Assisted Living
Payment Options in Assisted Living
What is the Cost of Assisted Living?
The cost of assisted living varies with each residence. It will depend on the size and location of the apartment and the amount of services needed by a specific resident. Monthly fees are based on rent, utilities, food, housekeeping, personal care and other optional services and amenities. Assisted living costs are generally less than those for a skilled nursing facility because nursing homes are required to provide intensive, 24-hour skilled nursing and related care. In Massachusetts, monthly fees range from approximately $2,000 to more than $7,000. Because special care units and programs for people with memory loss and/or dementia provide additional staffing and services, they are typically at the high end of the fee range.
Different residences charge for rent and services in different ways. For example, some residences charge a basic monthly fee that includes some personal care services, while others have service packages, and yet others charge separately for all services on an “a la carte” basis. There may be charges for items such as guest meals, room service, special recreational events, transportation, personal laundry, etc. Ask each residence under consideration for a full disclosure of costs, including how and when costs may be increased.
Paying for Assisted Living
Today, most people (90%) in Massachusetts pay privately for assisted living. However, in some cases, additional financial assistance programs may be available for those with limited resources. Since every assisted living community is different, you are encouraged to visit and speak with each individually to learn more about the payment options the specific residence accepts. Below you will find explanations of payment options that are accepted at various residences across the state including:
- Medicaid/Mass-Health Programs
- Housing Programs
- Residence Based Affordable Options
- Companion Suites
- Financial Scholarships
- Long Term Care Insurance
Group Adult Foster Care
Massachusetts Executive Office of Health and Human Services (EOHHS) reimburses an assisted living provider for the provision of personal care services and the administration of the program for MassHealth (Massachusetts Medicaid) eligible residents at qualified GAFC assisted living residences. Approximately $1,200 per participant per month is reimbursed to the provider for personal care services, while the resident remains responsible for the rent. See the Supplemental Security Income section below regarding assistance with rent. To be eligible for the GAFC Program, the individual must meet both clinical as well as financial criteria. For more information on the GAFC program, please call the GAFC Program Manager at 617-727-7750 or visit www.mass.gov/elders.
Senior Care Option (SCO)
This combined MassHealth and Medicare managed care program includes health care and social services to help low-income, frail older adults stay healthy and able to live in their community. A team of health professionals develops a plan of total individualized care and services are provided by a network of medical and other professionals, including a primary care doctor, nurses, specialists, and a geriatric support coordinator, who are part of a senior care organization. For more information about the SCO program, please call the Executive Office of Elder Affairs at 617-727-7750 or visit www.mass.gov/elders.
Program of All-inclusive Care for the Elderly (PACE)
PACE is a national insurance program funded jointly by Medicare and Medicaid. PACE coordinates and provides preventive, primary, acute and long-term care services so older adults can continue living in their community. Delivering all needed medical and supportive services, the program is able to provide the entire continuum of care and services while maintaining the older adult’s independence in her/his home (including assisted living) for as long as possible. PACE serves individuals who are:
- Aged 55 or older;
- Certified by their state to need nursing home care;
- Able to live safely in the community at the time of enrollment; and
- Living in a PACE service area.
Care and services include:
- Adult day care, e.g., nursing; physical and occupational therapies; meals; social work; personal care
- Medical care provided by a PACE physician familiar with the resident’s history, needs and preferences
- Home health care and personal care
- All necessary prescription drugs
- Medical specialists such as audiology, dentistry, optometry, podiatry, and speech therapy
- Respite care
- Hospital and nursing home care when necessary (PACE participants must be certified to need nursing home care to enroll in PACE.)
For more information about PACE programs, visit the National PACE Association’s website at www.npaonline.org. Or call the Massachusetts Executive Office of Elder Affairs at 617-727-7750 or visit www.mass.gov/elders.
Supplemental Security Income (SSI) and Assisted Living
This federal income supplement program is, separate from Social Security, designed to help disabled people and older adults with little or no income or resources obtain a minimum standard of living.
Some states, including Massachusetts, supplement the federal benefit with additional payments through a state supplement program (SSP). The federal and state benefits depend on the individual’s living arrangement; for assisted living, the added benefit is referred to as SSI-G. SSI-G beneficiaries use the benefit to “buy” room and board in assisted living. In order for an individual to access the SSI-G benefit s/he must:
- Live in a (state) certified assisted living community;
- Be clinically eligible for and participate in the Group Adult Foster Care (GAFC) program;
- Have countable monthly income less than $1,195; and,
- Have assets less than $2,000 ($3,000 for a couple).
As of January 1, 2014 the SSI-G benefit amount was set at $1,175/month for an individual. The Social Security Administration does not count the first $20 of the individual’s income in determining the SSI-G benefit. Thus in order to access SSI-G, an individual needs to have a countable monthly income less than $1,195.
The SSI-G benefit amount is $1,763/month for a couple and the Social Security Administration does not count the first $20.00 of the couple’s income in determining the SSI-G benefit. Thus in order to access SSI-G, the couple needs to have a countable income of less than $1,783. For more information about SSI-G, contact the Massachusetts SSP Customer Service Center at (877) 863-1128 or visit http://www.mass.gov/eohhs/consumer/basic-needs/financial/ssp.html.
Veterans' Benefits: "Aid and Attendance Program"
This program offers an enhanced pension program for veterans and their spouses who require “care and assistance on a regular basis.” These older adults can receive home care or reside in assisted living residences or nursing homes. This assistance is for eligible veterans or surviving spouses who have medically documented needs, such as assistance with activities of daily living (ADLs) due to blindness, limited mobility, physical limitations or mental cognitive problems, including Alzheimer’s disease. The Aid and Attendance (A&A) benefit must be paid in addition to the monthly pension. The eligible veteran for A&A:
Requires the aid of another person in order to perform personal functions required in everyday living, such as bathing, feeding, dressing, attending to the wants of nature, adjusting prosthetic devices, or protecting himself/herself from the hazards of his/her daily environment, OR, Is bedridden, in that his/her disability(s) require that he/she remain in bed apart from any prescribed course of convalescence or treatment, OR, Resides in an assisted living residence or nursing home due to mental or physical incapacity, OR, Is blind, or so nearly blind as to have corrected visual acuity of 5/200 or less, in both eyes, or concentric contraction of the visual field to 5 degrees or less.
To qualify, the veteran must meet certain eligibility criteria, such as:
- Any War Veteran with 90 days of continuous active duty, at least one day during a period of war
- Honorable Discharge
- “Permanently and totally disabled” because of a non-service connected condition
- Note that veterans living in a nursing home due to mental or physical incapacity, who are blind or are living in an assisted living residence, are presumed to need the required level of service.
- Surviving spouse of a War Veteran whose marriage ended due to death of veteran
- Individual(s) qualify both medically (unable to live independently) and financially.
For more information visit, http://www.benefits.va.gov/pension/aid_attendance_housebound.asp To apply, please call 1-800-827-1000 for the Veteran Service Office (VSO) in your area.
Section 8 Housing Program
Section 8 is the federal government’s largest affordable housing assistance program. The program’s goal is to help elderly, disabled, and families with very low incomes afford housing in the private market. The Section 8 program is administered by local Public Housing Authorities (PHA). Benefits can be either a mobile voucher or “project-based.”
Mobile vouchers allow eligible recipients to choose any rental unit of their choice, including assisted living, as long as the landlord is a willing participant, and the unit meets the required levels of health and safety. When a tenant with a mobile voucher moves, the rental subsidy moves with her/him.
Project-based Section 8 is attached to a particular building and does not move with the tenant. A PHA can “project-base” up to 20% of its Section 8 funds.
To be eligible, a tenant’s income may not exceed 50% of the area median income. The tenant’s portion of the rent may range from 30% to no more than 40% of the tenant’s monthly adjusted income. The PHA determines a payment standard for the dwelling unit based on Fair Market Rents (FMR) of modest rental housing in the area. The difference between the two numbers determines the amount of the PHA rent subsidy, which is paid directly to the landlord from the PHA. Rents in an assisted living residence can be up to 110% of FMR. If the Section 8 is used in a building financed with Low Income Housing Tax Credits then the Section 8 rents may be set as high as the rents charged for the LIHTC-financed apartments. Additional information is available on the HUD website.
Low Income Housing Tax Credits
The Low Income Housing Tax Credit is a federally authorized program that assists in the production and preservation of affordable rental housing for low-income families and individuals. The program supports a broad range of activities including acquisition, new construction, and rehabilitation of existing rental properties. Tax credits can be used to support the acquisition and/or rehabilitation of existing structures for rental use, including distressed or failed properties, or the new construction of rental projects.
In Massachusetts, the Department of Housing and Community Development (DHCD) is allocated a per capita dollar amount each year to be awarded to housing providers according to strict application requirements. Due to the high demand and limited supply of tax credits, the credits are awarded on a very competitive basis. Low-Income Housing Tax Credits are a dollar-for-dollar reduction to the owner’s federal tax liability each year for up to ten years that the community remains in compliance with program regulations.
If the housing owner has a large federal tax liability, s/he may keep the credits and use them against the liability. Generally speaking though, the owner “sells” the credits to a company (i.e., Proctor and Gamble) or syndication company (i.e., SunAmerica), and the money brought in by the sale is used as financing for the assisted living community. The new owner of the credits claims the credits against their federal tax liability for a period of ten years as long as the housing provider remains in compliance for at least 30 years.
One of the most important requirements of the Housing Credit program is to set aside a certain percentage of the total number of units in the community for households whose gross annual income is at or below the income limit established annually by the Department of Housing and Urban Development (HUD). The owner must make a set-aside election of 20/50 or 40/60, which means that at a minimum, if the owner chooses 20/50, 20% of the total units in the community must be rented to residents with gross annual incomes less than or equal to 50% of the area median gross income (AMGI) adjusted for household size, or if the owner chooses 40/60, the same formula is used. Some owners include deeper levels of affordability (a greater number of units) to make their applications for credits more appealing. In addition, ten percent of the total units must be reserved for persons or families earning less than 30% of area median income. Many housing providers who have been awarded tax credits use GAFC participants to meet this set-aside requirement.
In accordance with the regulations, the housing provider may only charge the tax credit residents the “rental” fee established by HUD. The Housing Credit program does not, however, cover services not associated with use and occupancy of the unit, therefore, the assisted living residence may charge service fees in addition to the rental fee. For more information contact DHCD at 617-727-7824.
Shelter Plus Care Subsidies
The McKinney Shelter Plus Care Program offers help with rent and other supportive services to both individuals and families who are homeless due to a disability, primarily mental illness, chronic substance abuse and/or HIV/AIDS.
Through this program, residents pay not more than 30% of their adjusted income towards the total housing cost. This program is administered through DHCD’s Division of Public Housing and Rental Assistance. Learn more on mass.gov.
Residence Based Affordable Options
Companion suits are units designed to be shared by two residents, usually at a cost that is less than what the unit would cost if it was occupied by only one resident.
Some residences offer financial scholarships for residents with varying needs and income levels through their own fundraising and/or endowment efforts. Since these financial scholarships are overseen by each residence and/or their management or parent company, it is important to speak with the residence individually about the application process and terms of the scholarships.
Long Term Care Insurance
Some long-term care insurance policies are now offering coverage for some of the costs associated with assisted living. Since policies can vary widely, please speak with your insurance broker regarding the specifics of what your policy covers. Additionally, if you are considering buying a policy, it is important to read and compare policies carefully.