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Senior Living: How Much Is It and Who Pays for It?

Newtown Square Friends & Neighbors, August 2022

Retirement communities and senior housing can be an expensive proposition – often more expensive than expected. Who pays for what? How much do they each cost?

Short-Term Rehab: After a hospitalization, one may require a stay at a short-term rehab facility for physical, occupational and speech therapy in order to be better prepared to return back home. This stay is covered by Medicare up to a specific number of days, which can vary, and after that point, there may be a co-payment.

COST: Covered by Medicare

Independent Living (IL): This type of community includes many amenities, often including meals, utilities, transportation and activities. But any personal care assistance would require the individual to hire a private-duty aide/home care aide.

COST: ~$2,500 – $5,000 / month (this varies by size of residence)

Assisted Living (AL) / Personal Care (PC): While this varies by state, in Pennsylvania, AL/PC communities are privately paid for, meaning they are not covered by Medicare or Medicaid but rather by savings, the proceeds of a home sale, retirement accounts and pensions. Long-Term Care policies can also be used to help defer the costs, though they are less common.

COST: ~$4,500 – $7,000 / month (this varies based on care needs and size of residence)

Memory Care (MC): Paid for privately, as described previously for AL/PC.

COST: ~$6,000 – $8,500 / month (this varies based on care needs and size of residence)

Long-Term Skilled Nursing / Nursing Home: Nursing homes are the most expensive of the options given the level of care they provide and type of staff in the facility. This is also the only environment that can be covered by Medicaid, though not every Nursing Home accepts Medicaid.

COST: ~$11,000 – $15,000 / month (paying privately or spending down* to qualify for Medicaid) *Spending down is when subtracting medical expenses and cost sharing lowers a person’s income to a level that qualifies them for Medicaid.

Continuing Care Retirement Community (CCRC): This community has all of the different levels of care on site, from Independent Living through Skilled Nursing. Their cost structure typically requires a large upfront buy-in in addition to a monthly cost. The buy-in can act like an Insurance policy, covering the resident through all levels of care.

COST: Buy-Ins range widely based on community, from $90,000 – $1,000,000 and up

Senior living is an expensive proposition that requires planning to ensure there are no surprises down the road. A Certified Senior Advisor® (CSA) can offer a thorough review of options available in your area to alleviate the anxiety that can come with such a move.