How is Most Assisted Living Paid For?

A major issue associated with assisted living is determining how this type of care will be paid for by residents. Paying for assisted living can require a person to be thoughtful and sometimes even at least a little bit creative. There are 10 primary ways in which assisted living can be paid for by residents. These are:

  • Medicaid
  • Income and savings
  • Long-term care insurance
  • Veteran’s benefits
  • Home equity
  • Selling life insurance policy
  • Family support
  • Reverse mortgage
  • Renting residence
  • Consider location


In some states in the United States, Medicaid does provide some financial assistance to pay for assisted living. With that said, a resident of assisted living needs to have little to nothing in the way of assets in order to access Medicaid in order to pay for such a facility. California is a state in which the Medicaid program does cover some assisted living costs in certain circumstances. Medicaid typically is a last resort as a means of paying for assisted living. 

Income and Savings

Another way in which a person can pay to reside in assisted living is by using income or savings. Some Californians and other Americans were able to save money over the course of their careers in order have funds available to pay for such things as assisted living. 

Long-Term Care Insurance

In addition, some Americans have taken the step to purchase long-term care insurance. Long-term care insurance oftentimes does cover the costs associated with assisted living, or at least some of them. You need to make sure you understand what is and is not covered by a particular long-term insurance policy before you sign up for this type of coverage. 

Veteran’s Benefits

Veteran’s benefits can cover costs associated with assisted living in some circumstances. These benefits might not cover all costs, but a notable portion of them. A specific assisted living facility will be able to confirm what may or may not be covered by veteran’s benefits at that community.

Home Equity

Many people have amassed at least some equity in their residences. Others have completely paid off a mortgage that once existed on their homes. Home equity can be used to obtain a loan that in turn can be used to pay the costs associated with assisted living. 

Selling Life Insurance Policy

In recent years, a growing number of people have been selling their life insurance policies. The money generated by such a sale can be used to pay the costs associated with living in an assisted living community. 

Family Support

In some instances, family members come together and pool money to assist in the payment of the costs of assisted living for an older loved one. For example, adult children come together and contribute to the payment of the monthly costs associated with an older parent residing in an assisted living community.

Reverse Mortgage

Using a reverse mortgage can be a bit of a challenge as a means of paying to reside in an assisted living community. A reverse mortgage permits a homeowner the ability to take out a loan based on equity in his or her residence. The loan does not need to be paid back until a person moves out of the residence or sells it. A reverse mortgage can be helpful if a married couple lives in the residence. In a situation in which one spouse needs assisted living care, the other spouse can remain in the home. A reverse mortgage can be used in that type of scenario to pay assisted living costs.

Renting Residence

Yet another means by which a person can pay to reside in an assisted living community is renting the home in which that individual lived in before the month. All or at least a portion of monthly rental payments can be used to pay assisted living costs. 

Consider Location

Considering the location of an assisted living facility is not a way of paying for such a center, per se. However, there can be some pretty significant costs from one assisted living center to another. The geographic location of a particular assisted living community is a driving factor in what residing in such a facility will cost a resident. 

In many cases, a person who desires or needs to reside in an assisted living facility will need to utilize more than one of the avenues of payment discussed in this article. For example, an individual might be able to draw on savings and get at least some help from family members in order to pay the costs associated with residing in an assisted living community. It is also important to note that people are wise to plan far ahead for the prospect that the day might arise on which the need money to pay the costs to live in an assisted living facility.