How to Pay for Memory Care: Understanding Your Options

Planning for retirement is stressful, and adding in costs for specialized senior living for a loved one living with dementia can sometimes feel even more so. If you’re wondering if memory care fits into your loved one’s financial future, you aren’t alone. Many seniors and their family members search for additional support and assistance while juggling a budget. 

Fortunately, the more you understand about your memory support options, the better you can plan ahead for a solution that meets your loved one’s care needs and finances. While memory care is an investment for many families, there are ways to offset costs and find communities that offer services at a lower price point.

How Much Does Memory Care Cost?

U.S. News & World Report states that the average cost of memory care is $7,645 per month. However, it is important to note that expenses can fluctuate greatly based on location, services offered, and type of care provided. For example, memory care services in a skilled nursing facility will likely be significantly more than memory care services in an assisted living community as the level of care offered at a skilled nursing facility is much higher.

The average cost of memory care is more than the average cost of assisted living due to the more specialized care offered, trained staff members, and a community designed to combat the challenges that come with dementia. For comparison, the monthly cost of assisted living, according to CareScout, is $6,200.

How Do Most Families Pay for Memory Care?

Family members often pay for memory care using more than one source, and their financial plan depends on factors ranging from how much money their loved one has saved and in assets, how many family members can pitch in, and what type of care their loved one needs to be safe and healthy. There is no one-size-fits-all solution, but families that work closely with a financial advisor and who begin planning early are often less stressed than those who do not.

Private Pay Options for Memory Care

Most seniors pay for memory care services privately, or out-of-pocket. There are a few ways that this can be possible for seniors who have planned for retirement costs.

Personal Savings and Retirement Income

The first way many seniors pay for memory care out-of-pocket is by using their personal savings and retirement income. The majority of memory care communities bill monthly, with that monthly fee being consistent from year to year (except for some cost of living increases). This can make it much easier for family members to predict how long their loved one’s savings will last.

Expenses can be paid by using the senior’s:

• Savings accounts
• Monthly pension payments
• Social Security payments
• Investments and other retirement accounts

Home Equity and Property Assets

Another common way for seniors to pay for memory care costs is by using money they acquire from selling their home and other property assets. Dementia, including Alzheimer’s disease, is a progressive condition. This means that once living at home is no longer safe and healthy, the senior will not recover enough to return home. 

If your loved one can sell their home and other property, they can use the money from those transactions to pay for memory care costs. Work with a financial advisor and lawyer to determine if other property transactions, such as a reverse mortgage, is a wise decision for your loved one’s situation.

Life Insurance Benefits

If a senior has life insurance, they can sometimes cash it in and convert their policy to help cover the costs of memory care living. Contact your loved one’s policy holder to speak candidly about your options based on their policy.

Insurance and Financial Assistance Programs

In general, private insurance will not cover memory care senior living. However, depending on your policy, it might cover some additional services that you can receive in the community, such as visiting occupational, speech, or physical therapy.

Long-Term Care Insurance

If your loved one invested in long-term care insurance, contact the insurance company to get the details about their plan and coverage. Long-term insurance might offer a monthly payment for services, leaving your loved one to cover the remaining balance. However, there are some policy limitations and requirements, so it is important to get the details about your loved one’s policy from the company’s representative. Don’t be afraid to contact the representative multiple times, and you can even utilize the expertise of the memory care community. Have potential memory care communities review a copy of your loved one’s policy and then explain to you what costs will be your responsibility.

Medicaid Coverage for Memory Care

Not all memory care communities accept Medicaid. In fact, Medicaid coverage varies dramatically from state to state. However, it is safe to assume that most assisted living memory care communities will not accept Medicaid and those that do will have a long waiting list. If you’re searching for memory care communities in a skilled nursing facility, you are more likely to find homes that do accept Medicaid payments, though there will still likely be a waiting list for long-term care.

If Medicaid is an option for your loved one now or in the future, it is never too early to begin researching how they can become eligible for Medicaid benefits. Medicaid was designed for low-income seniors, so the first step of eligibility is to determine if your loved one meets the income requirements set by state and federal regulations.

Veterans Benefits and Other Assistance Programs

If your loved one is a Veteran or the spouse of a Veteran, there might be other ways to offset the costs of memory care. The first step to explore is Veteran Aid & Attendance benefits, which can pay a set amount each month to go toward memory care services. If your loved one meets the requirements for this benefit, it can significantly cut down costs your loved one needs to pay monthly.

Veteran disability pay is also tax-free and can be used to offset the monthly costs of memory care services. If your loved one is a Veteran or spouse, contact your local Veterans Administration to have a conversation about what benefits might be available.

What Medicare Does and Doesn’t Cover

Medicare does not cover assisted living memory care or long-term skilled nursing memory care. Instead, Medicare covers skilled nursing services for up to 100 days per year, but only after a 3-day qualifying hospital stay and if the senior continues to meet their health goals and outcomes. Since memory care, whether in assisted living or skilled nursing, is long-term care, Medicare will not cover it.

What If You Need Additional Financial Support?

Memory care services can become expensive month after month. It is never too early to begin working with a financial advisor to plan for the future. Talk with your advisor about your loved one’s expenses and funds, as well as what the doctor says about their current and future needs.

Another wise decision is to work closely with the social worker at the memory care community. They are experienced professionals who are plugged into the greater community. Social workers often know a lot about community grants and funding that your loved one might be eligible for. They can also help you cut costs for other expenses that might not be covered by the monthly senior living fee.

Choosing a Memory Care Community That Fits Your Budget

Deciding on a memory care community requires weighing multiple factors, including budget, quality of care, and lifestyle. When possible, you want to choose a community that will keep your loved one as safe, independent, healthy, and happy while still being able to afford it for months and even years to come.

When touring potential communities, make sure that financial considerations are included on your must-ask list. Questions you might want to ask can include:

• What is the monthly fee? 
• How often do monthly fees increase?
• What have been the latest cost-of-living increases?
• What is included in the monthly fee? What isn’t?
• Are there any promotions or discounts that you can offer at this time to decrease our costs?
• Are you connected with any community resources that could be used to offset costs in the future?
• As my loved one’s needs change, how will their costs?

You might also be able to decrease the costs of memory care by choosing:

• A studio apartment over a 1-bedroom option
• A shared suite with a roommate over a private suite
• Family bringing in supplies like incontinence products or medications, instead of the facility ordering and billing for these supplies

As you’re evaluating your loved one’s budget and needs, remember to keep in mind the services, support, and peace of mind the community can bring to your family.

Planning Ahead for Memory Care Costs

A diagnosis of dementia can send the entire family into a tailspin, and thinking about financial repercussions might not be at the top of your list. However, it is never too early to begin exploring your options and getting a handle on your loved one’s budget and benefits. Planning ahead can save you stress in the future and help you make a more empowered decision about what memory care community could fit into your loved one’s budget.

Learn more about memory care services, as well as how to set up a visit at a local Legend Senior Living residence, so that you can begin your planning process.