seniors budgeting for assisted living in Newport News, VA.

How to Budget for Senior Assisted Living in Newport News, Virginia

This is an important question for families, and in this article, The Chesapeake will help you find answers. Assisted living costs vary throughout the country, and though you might think Medicare will cover those costs, the truth is, it won’t. What is assisted living, and what is the cost of assisted living in Newport News, Virginia? Let’s take a look and briefly review some of the options available to cover the cost.

What is assisted living?

Assisted living is residential care for people who need help in their day-to-day lives but don’t require around-the-clock supervision and medical attention. At a Life Plan Community, aka Continuing Care Retirement Community, like The Chesapeake offering assisted living services, individuals will have their own private residence with dining included, as well as access to other services and amenities. Communities offering assisted living care typically provide at least some of these services:

  • Health care management and monitoring
  • Housekeeping and laundry
  • Medication reminders or help with medications
  • Recreational activities
  • Security
  • Transportation

The goal and benefit of assisted living services is to help maximize independence and functioning at a time when one is unable to be fully independent.

Choose from four levels of assisted living at The Chesapeake

Assisted living in Newport News, VA, offers trusted services and nursing care in a stimulating environment that promotes dignity, independence and socialization. Our seamless progression of care levels begins with minimal personal assistance with certain aspects of daily living, and increases the level of service to match your needs, culminating with Level Four memory care services for those diagnosed with Alzheimer’s disease or other forms of dementia. We have options and strategies to help keep the costs of assisted living within reach, and we’d love to offer any assistance we can.

The median costs of assisted living — nationally and in Virginia.

Genworth Financial is a Fortune 500 insurance holding company that tracks the cost of assisted living and long-term care in the United States. The national median cost of assisted living is $4,300 a month for an annual total of $51,600, according to Genworth’s 2020 cost of care survey. It’s higher than average in the state of Virginia, coming in at $4,850 monthly and $58,200 annually. For most of us, these are not insignificant sums. Budgeting for assisted living and covering these costs often require tapping multiple revenue streams — insurance, savings accounts, family contributions and more — sometimes involving more than one family member. Let’s look at some funding sources.

Private Pay.

Paying for assisted living entirely out of pocket  is often referred to as “private pay.” This essentially means that  the resident will use their own savings, personal finances or assets to pay for all assisted living care and services. People who use health insurance to pay for care are also considered to be using private pay, since this isn’t  a payment that uses governmental sources or programs.

Long-Term Care Insurance.

Long-term care insurance is designed to offset the costs and expense of long-term care  for people who won’t  be able to qualify for Medicaid. Unfortunately, people who already have disabilities or illnesses won’t qualify for long-term care insurance, since they already require care and services (similar to a preexisting  condition). Upper age limits may also exclude individuals from qualifying. In these cases, the individual will need to pay for care through other means, such as Medicaid or private pay. Most policies pay a fixed dollar amount toward each level of care, with higher levels of care being reimbursed at an increased rate.

Be careful purchasing a long-term care insurance policy. One may be vastly different from another in terms of benefits and coverage, qualifications, rules and flexibility, exclusions, and waiting periods. The cost of long-term care insurance can vary widely as well — sometimes by more than $500 a month — a cost that can increase over time. You should research and understand long-term care insurance policies with the help of a qualified financial advisor and family member.

Veteran’s Retirement Benefits.

If you’re a retired veteran of the armed services, you qualify for medical care through a Veterans Affairs medical facility (often  referred to as a “VA Facility.” You may also qualify for the Veterans Aid & Attendance benefit. The A&A benefit, as it’s known, includes both the VA’s Basic Pension for veterans and surviving spouses, as well as an additional monetary payment to help reduce the financial burden of long-term care. The money, which is tax-free, covers some expenses for in-home care, nursing homes, and assisted living for honorably discharged wartime veterans over 65 and their widowed spouses. You’ll need to apply and qualify on the basis of wartime service, medical requirements and financial need, but this lifetime benefit is well worth the effort. For more detailed information, visit the Veterans Administration website.

Medicare and Medicaid.

This can be a complex subject as it relates to overall care and prescription drug coverage, but the main thing to remember is that Medicare doesn’t pay for the cost of living, room and board, or personal care in an assisted living facility. Medicare might pay for short-term stays in assisted living or in a rehabilitation center while you recover from an illness, injury or surgery, but assistance from Medicare is very limited.

Reverse Mortgages.

A home equity line of credit (HELOC) or reverse mortgage are two options homeowners have for using their homes to help pay for assisted living. But these options aren’t  necessarily appropriate or available to all homeowners. They might not be the best financial decision for you. To use a reverse mortgage, for example, an individual must be married and their spouse must continue to live in the home, as reverse mortgage rules state that a home must be owner-occupied. Home equity credit lines don’t  have this limitation. They also have lower associated costs and can be a good option for couples of mixed ages who wouldn’t be eligible for a reverse mortgage.

Life Insurance Benefits and Conversions.

There are five different ways life insurance policies can be used to pay for care while the policyholder is still alive. However, not all five options are available to all policyholders, nor do they necessarily make economic sense for everyone. That said, life insurance is one of the most underutilized of the self-payment options for assisted living.

  1. Life settlements are an option in which a policyholder sells their right to collect the death benefit from their policy and they stop making monthly premium payments in exchange for an immediate lump sum of cash.
  2. Viatical settlements are similar to life settlements, but are designed for terminally ill individuals. Typically, viatical settlements fetch a higher buyout for the policy than a life settlement.
  3. Accelerated death benefits are an option that enables terminally ill individuals to receive a portion of their death benefits in advance of their death.
  4. Death benefits loans are loans taken against the cash value of the policy, not the death benefit. These must be repaid or the death benefit will be reduced.
  5. Life insurance conversions directly convert the value of a policy in exchange for care. For example, an individual with a $100,000 policy may exchange that for several years in an assisted living or senior living community. Of these five options, it’s  likely life insurance policyholders will receive the greatest value for their policy using this approach.
Assisted Living Loans.

An assisted living-specific loan, when used appropriately, provides families with great flexibility. They’re designed for short-term financial gaps typically for periods of less than 2 years. They’re  ideal when families have unexpected assisted living costs and are waiting for other resources to become available. For example, if an individual is moving into assisted living and is waiting for a home to sell and they’re  uncertain how long that process will take, a loan is a very good option. Another example is when a veteran has applied for the Aid & Attendance benefit. The approval process can be lengthy, but once approved, the benefits are paid retroactively to their application date in a lump sum. The lump sum is then used to pay off the loan.

Plan now to pay for assisted living costs.

You’ll have to consider various health scenarios, but creating a financial plan for assisted living is a good idea. There are a variety of resources available to help families with financial planning for assisted living. They include Public Benefits Counselors, Geriatric Care Managers, Elder Care Resource Planners and Elderlaw Attorneys. Your local Area Agencies on Aging (AAA) and Aging and Disability Resource Centers (ADRC) often have benefits counselors on staff who can help families understand their financial options for assisted living.

For more information about assisted living services at The Chesapeake in Newport News, VA., please contact us through our website.