Senior Care Costs Glossary
How can you know how to pay for assisted living if you don’t understand the words being tossed around?
Assisted living terms can be overwhelming, whether you’re stunned at the range of senior care options available or trying to make sense of financial terminology. It can be difficult to find a clear explanation of how something like Medicare differs from Long Term Care. But the stakes are high, and misunderstanding what a certain type of insurance covers can be a costly mistake.
That’s why we’ve put together this glossary of assisted living terms — with a focus on financial or cost-related terms — as well as helpful resources to explain each one. Keep in mind that understanding these terms is just the first step, since each one might be applied differently within specific care settings. Even industry pricing models will influence the cost of senior living.
B – G – L – M – R – V
Bridge Loans
Bridge loans, such as the Elderlife Bridge Loan, are exactly what they sound like: loans “designed to serve as a bridge until more permanent financial resources can be arranged.” They can’t provide stable financial support for the duration of senior care.
They were created to help seniors and their families afford the cost of assisted living, home care or skilled nursing over a limited time period. Typically, these loans are applied on a short-term basis for periods ranging up to 12 months, though they sometimes extend longer.
Think of these loans as similar to a credit card or line of credit, with comparable interest rates; loans can be repaid at any time without penalty. To get a bridge loan, you’ll need to either have a strong credit score or have multiple co-borrowers on the account.
This option may be right for you if:
- You need help with short-term costs around the move but have secure financing options for the longer term.
- You’re applying for a VA pension or Medicaid — unlike family loans, bridge loans are never counted as income.
- Your selected assisted living facility is willing to pay the interest on the loan as an incentive for you to move in.
[Source: PayingforSeniorCare.com]
Government Programs
A number of government programs are available to assist seniors in paying for care. If you keep looking, you’ll likely find one that meets your needs.
Here’s an overview of the key categories:
- Housing (primarily from the Department of Housing and Urban Development)
- Relief for recurring costs such as property taxes & utilities
- Assistance with one-off costs such as home repair
- Provision of affordable or subsidized housing
2. Medical and health (such as Medicare — see more below)
3. Food and nutrition
- Monetary assistance such as monthly food allowances
- Delivery services for isolated or disabled seniors
4. Employment and income
5. Programs to teach new skills and identify jobs
6. Programs to supplement earned income
There are also likely to be local options near you. States and towns often make available other forms of assistance with rent or care in a senior living environment. Local government representatives or assisted living facilities are great resources for more information — if you’re located near a Benchmark Community, call 888-304-5690 to speak to one of our trained Financial Concierges!
Make sure to look into this helpful resource from SeniorLiving.org for a full breakdown of available programs, including by state.
Long-Term Care Insurance
Unlike traditional health insurance, long-term care insurance is designed to cover long-term services and supports. This includes personal and custodial care in a variety of settings such as your home, an assisted living community organization, or another facility.
The great thing about this type of insurance is that it is highly flexible and covers much of the cost of senior living communities. For instance, long-term care policies can reimburse policyholders a daily amount for services like bathing, dressing, or eating — not just doctor’s visits or nursing care.
An important note: many policies have limits on how long or how much they’ll pay. Make sure to check those limits or investigate any hidden costs, like whether the insurance company will raise the premium on your policy after you buy it.
[Source: LongTermCare.ACL.gov]
Medicaid
Medicaid provides health coverage to millions of Americans, including eligible low-income adults, children, pregnant women, older adults, and people with disabilities. Medicaid is administered by states, in line with federal requirements. The program is funded jointly by states and the federal government.
Medicaid coverage is available to older Americans, and you may be eligible (check with your state’s healthcare office to be sure). However, Medicaid is also available to a wide range of other individuals. This is one of the things that makes it distinct from Medicare, which was designed primarily for older Americans.
[Source: Medicaid.gov]
Medical Deductions
In certain cases, expenses associated with assisted living, memory care or nursing homes are considered tax-deductible medical expenses.
To qualify, you or your dependent must be in that facility primarily for medical care (which includes assistance with activities of daily living). If you’re in the facility for medical reasons, then all costs — including meals and lodging — may be tax-deductible as a medical expense.
[Source: IRS.gov]
Medicare
Medicare is the federal health insurance program for:
- People who are 65 or older
- Certain younger people with disabilities
- People with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant).
Medicare comes in a few different parts. Check your Medicare card if you’re not sure what kind of coverage you have.
Here’s a simple overview of the core Medicare offerings, known as Original Medicare:
- Part A = hospital insurance
- Covers inpatient hospital stays or care in a specialized facility like skilled nursing or hospice
- Part B = medical insurance
- Covers doctor visits, outpatient care, medical supplies and preventative care
- Part C = “all in one” coverage
- Includes everything in A, B & D
- Part D = prescription drug coverage
- Adds drug coverage to Original Medicare plans (such as A & B)
It’s important to note that though these are federal insurance programs, they’re offered by private insurance companies that have been approved by Medicare.
[Source: Medicare.gov]
Medigap
This assisted living term refers to Medicare Supplement Insurance. This type of policy helps pay some of the health care costs that Original Medicare doesn’t cover, like copayments, coinsurance, and deductibles. Medigap policies are sold by private companies.
Some consumers instead purchase Medicare Advantage plans. These are NOT the same as Medigap plans. Instead, they function like an HMO (Health Maintenance Organization, with coverage restricted to a particular network of doctors) or PPO (Preferred Provider Organization, with a wider range of coverage).
[Source: Medicare.gov]
Reverse Mortgages
A reverse mortgage is a loan available to homeowners 62 years or older. It allows them to convert part of the equity in their homes into cash. Essentially, it’s a way to use the wealth you’ve built up in your home to supplement a limited income. You’re not required to pay off the loan until the home is sold or vacated.
[Source: ReverseMortgage.org]
Veterans Administration (VA) Benefits
Two VA programs provide certain older veterans with an additional monetary amount:
- Aid and Attendance (A&A) is an increased monthly pension amount paid if you meet certain eligibility requirements
- The Housebound benefit is an increased monthly pension amount paid if you are substantially confined to your immediate premises because of a permanent disability.
If you need more details, we’ve written up a comprehensive guide to veterans’ senior housing and VA benefits.
[Source: Benefits.VA.gov
If you’re just starting this journey, consider taking this 5-minute survey to assess your situation and determine whether it’s the right time for senior living for you or your loved one.
