Last month, I received a call from a man who desperately needed help with his father. The father had dementia, was living alone and had recently been admitted to the hospital. The medical team’s recommendation was clear: He needed to move into an assisted living community, preferably memory care.
I asked how his father had been managing at home. The son explained that he had been bringing him meals every day and keeping an eye on him. We talked about how assisted living and memory care work, and then the question came up that eventually comes up in almost every conversation: How will we pay for it?
The son told me that his father lived entirely on his monthly retirement income. His dad had no savings or retirement funds, although he did own his home. Crucially, the son had never asked his father what his plan was for when he needed more help. He had simply assumed that some kind of insurance would automatically cover the care, and he did not want to sell his dad’s home.
After working with older adults and their families for many years, I can tell you that this situation is not unusual. Too many families wait until there is a hospitalization, a fall or another crisis before talking about long-term care.
What Medicare and Health Insurance Do — and Don’t — Cover
One of the biggest misunderstandings centers on how assisted living is funded. Assisted living, memory care, board-and-care homes and independent living communities are private-pay. Medicare and regular health insurance do not pay the monthly cost of living in these communities.
That reality often comes as a shock. A person with advanced dementia may need help eating, bathing, dressing, using the bathroom and taking medications. It certainly feels like health care. However, insurance systems generally consider these services personal or custodial care rather than medical care.
Medicare or a managed care plan may pay for medically necessary services such as hospital care, doctor visits, physical therapy or a limited stay in a skilled nursing facility when certain requirements are met. It does not pay for long-term help with everyday activities. A person’s health insurance will still cover doctor appointments and other medical needs while the person resides in assisted living, but it will not cover the community’s monthly room, board and care charges.
Who Pays for Assisted Living or Memory Care?
In most cases, you do. Payment typically comes from personal income, savings, investments, the sale of a home or financial help from family members.
There are, however, a few benefits that may help:
Long-term care insurance: This can contribute toward eligible care expenses, depending on the policy. These policies usually begin paying after the insured individual meets certain care thresholds and completes a required waiting period. Every policy is different, which is why it is vital to understand your policy’s limitations and coverage long before you need them.
VA Aid and Attendance: Some qualified service members and surviving spouses may be eligible for this monthly benefit, which supplements a VA pension for those who need help with daily activities. Because military service alone does not guarantee eligibility, families should speak with an accredited representative or local veterans service organization before making financial plans. In Napa County, veterans services officer Dell Pratt can be reached at 707-253-4009.
Medi-Cal: This program is frequently confused with Medicare. Medi-Cal is California’s Medicaid program for individuals who meet low-income eligibility requirements. It can help pay for long-term care in a skilled nursing facility. California also has an Assisted Living Waiver for certain Medi-Cal recipients who require a nursing facility level of care but can live safely in an approved assisted living setting. However, this program is not currently offered in Napa County, though it is available in Sonoma County and several other counties. Space is tight, participating facilities are limited and waiting lists are common.
Questions to Ask Before a Crisis Hits
The purpose of sharing this is not to frighten anyone. It is to encourage families to start talking before a crisis hits.
If you are in your 40s or 50s, do you have a retirement account? Have you considered long-term care insurance? If you plan to remain at home, how would you pay for hands-on help there? Do your spouse or adult children know your wishes? Have you completed a power of attorney and an advance health care directive?
If you are an older adult, do the people you trust understand your finances and the specific type of care you would want? If you own a home, is equity part of your plan for paying for future care?
In the Napa area, assisted living can easily start around $6,000 per month, with costs increasing based on apartment size and the amount of care required. That means $72,000 a year or more. While the monthly fee includes meals, utilities, housekeeping, activities and 24/7 access to staff, it remains a significant expense.
Planning does not mean you are giving up your independence. In fact, having these conversations now gives you more control over where you live, who helps you and how your care will be funded. Napa County maintains a directory of information about local aging and disability services through Connections Napa County.
Please do not wait for a hospital discharge to begin the conversation. Talk about it now — while you have time, choices and the ability to plan together.
