Reviewed by Carol Bradley BursackCarol Bradley Bursack spent two decades as a primary caregiver to seven elders. She’s the author of Minding Our Elders: Caregivers Share Their Personal Stories and a contributor to several other titles. Carol is a newspaper columnist, blogger, and writer. Learn more about her at mindingourelders.com.

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Assisted living is expensive. Whether you thought your loved one had saved enough and now realize they may need more funds or are starting with a tight budget, many families feel the pinch. While the cost of assisted living can vary depending on location, your loved one’s care needs, and more, it’s not uncommon for families to be surprised by the cost. Thankfully, you and your loved one may be able to take advantage of several programs that can help cover some of the costs.

Key Takeaways

Many government-sponsored programs have a waiting list. These programs include Medicaid waivers and Section 8 vouchers.
Medicaid doesn’t pay for all the costs that come with assisted living. Medicaid only pays for the medical portion but usually doesn’t cover room and board.
The Department of Housing and Urban Development offers Section 202 housing for seniors. Unlike Section 8 housing, Section 202 offers more support services for senior residents.
You might consider an alternative to an assisted living community. Medicaid fully covers skilled nursing facilities, while a residential group home usually has a lower cost.

How to pay for assisted living with no money

The national monthly median cost of assisted living was $4,500 in 2021, according to Genworth.^[01] For many families, assisted living isn’t very affordable at this price. And, while assistance is available, you or your parent will likely still pay a portion of this monthly rate.

To reduce the monthly payment, make sure your loved one is taking advantage of every program and potential benefit available. Keep in mind that many waivers and assistance programs will provide monetary assistance for the medical portion of assisted living but not the cost of room and board. Your loved one may also be able to use more than one of these programs at a time to help stretch their budget.

Life insurance

If your loved one has a life insurance policy, they may be able to use it to pay for the care they need now. Depending on the policy, they may be able to sell it or convert a portion of the death benefit to create a long-term care benefit plan. It may be a good idea to consult an elder law attorney, as they can help you decide the best course of action and explain how this option may affect your loved one’s ability to qualify for other programs, such as Medicaid.

Veterans benefits

If your loved one is a veteran, or the surviving spouse of a veteran, they may be eligible for benefits. These include the following:

Veterans Pension. To qualify, your loved one needs to meet income and net worth limits set by Congress. Currently, the net worth limit is $150,538.^[02] Additionally, your loved one must not have received a dishonorable discharge. Service stipulations also apply, and your loved one must be over 65 or meet other qualifications to receive pension benefits.^[03]
Survivors Pension. If your loved one was married to a veteran and has not remarried, they may be eligible for the VA Survivors Pension. You’ll need to verify that the veteran did not receive a dishonorable discharge and met the service requirements mentioned above. Additionally, the survivor’s net worth must meet income limits set by Congress.^[04]
Aid and Attendance benefits. If your loved one receives pension benefits, they may be eligible for the Aid and Attendance benefit if they need assistance with activities of daily living (ADLs) or spend a large portion of the day in bed due to an illness.^[05]
Housebound benefits. If your loved one receives pension benefits, they may be eligible for housebound benefits if they spend most of their time at home due to a permanent disability.^[05]

It’s important to note that your loved one cannot receive Aid and Attendance benefits at the same time as Housebound benefits.^[05]

Medicaid

Medicaid doesn’t cover the cost of assisted living completely. However, it can help cover the cost of the medical portion of your loved one’s care. This may include medication management and administration, necessary on-site therapies, and caregiver assistance. The cost of room and board, however, would not be covered.

Medicaid is similar to other health insurances in how it pays for care. Depending on your state, your loved one may have copays, coinsurance, or deductibles that influence how much Medicaid will pay for your loved one’s care.^[06]

Medicaid eligibility for people 65 and older is based on Supplemental Security Income (SSI), which is administered by the Social Security Administration (SSA).^[07] Some states, however, use a stricter methodology to determine eligibility.^[07] If you need assistance with planning or applying for Medicaid, an eldercare attorney or Medicaid specialist can help you with this process.

Since Medicaid is administered at the state level, your loved one’s benefits may vary. You can view your state’s offerings and apply at Medicaid’s state links page.

Home- and Community-Based Services waivers

If your loved one receives Medicaid, they may also receive additional assistance through Home- and Community-Based Services (HCBS) waivers. These are available in most states and can help seniors receive care in their current assisted living community rather than moving to a Medicaid-approved nursing facility. However, each state has different HCBS offerings, and your parent may have to wait to receive these benefits as they sometimes serve a limited number of people.^[08]

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State assistance

Other sources of state support can be helpful if your loved one doesn’t qualify for Medicaid or needs more assistance than Medicaid can provide. The assistance they may receive will vary by location. Your loved one’s local Area Agency on Aging office can recommend various local and state resources for assistance. The Eldercare Locator from the Administration on Community Living is another option to locate help. Each state has different offerings, but the following programs and services are fairly common:

Case management
Caregiver supports
Transportation
Health and wellness programs
Long-term care ombudsman programs ^[09]

Social Security

Many seniors qualify for Social Security retirement benefits. However, these monthly payments will likely not be enough to pay for assisted living. If your loved one is under full retirement age and has a disability, they may be eligible for Social Security Disability Insurance (SSDI).

To qualify for SSDI, your loved one must be unable to work due to their disability, which must be a severe medical condition expected to last one year or cause death.^[10] Additionally, it’s important to note that your loved one would not be able to receive retirement benefits if they’re eligible for SSDI.^[11]

Supplemental Security Income

Supplemental Security Income (SSI) is offered to low-income seniors through the Social Security Administration. To be eligible for these monthly payments, your loved one must:

Be 65 or older
Meet the monthly income limits for gross wages or net self-employment income, which is $1,913 for individuals and $2,827 for couples in 2023
Meet the monthly income limits for pensions and gifts, which is $934 for individuals and $1,391 for couples in 2023
Meet the resources limit, which is less than $2,000 for an individual and less than $3,000 for couples in 2023 ^[12]

If your loved one worked and paid into the Social Security program, they can receive Social Security retirement benefits in addition to Supplemental Security Income.^[13] Additionally, many states offer supplements to seniors receiving SSI benefits. Be aware, though, that much of what is offered is tied to the federal poverty level, which changes yearly.^[13] There may be limits, too, as to what your state can offer as a supplement.

Assistance from the Department of Housing and Urban Development

The U.S. Department of Housing and Urban Development (HUD) has several programs seniors may be able to use. Some of these may apply to an assisted living community, while other options are an alternative to an assisted living community.

Does Section 8 pay for assisted living?

HUD offers the Housing Choice Vouchers Program, also known as Section 8 Housing, to low-income families, the elderly, and the disabled. While seniors can use these waivers, the Section 8 program isn’t designed specifically for seniors or assisted living communities.

Your loved one will need to apply for the program and then find housing that meets the program’s standards determined by the local public housing agency (PHA). The PHA then pays the landlord on behalf of the senior or family. It’s important to note that even though many people may be eligible for a Section 8 voucher, there’s often a waiting period for housing. And local housing agencies may have their own local preferences, such as serving someone who is currently homeless before serving someone with housing.^[14]

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How can a senior select section 8 housing?

If you’re considering helping your parent apply for a Section 8 voucher, it’s a good idea to find out whether any senior housing facilities in your area accept the vouchers. If your loved one is currently living in an assisted living community, it’s possible for them to remain there if the community has entered into a housing assistance payment contract.^[14] However, if the community isn’t participating, you’ll need to consider other locations for your loved one to live.

Seniors who receive Section 8 vouchers will still need to pay a portion of the rent. The PHA sets the amount of housing assistance, but your loved one can expect to pay 30% of their monthly adjusted gross income for rent and utilities.^[14]

Does Section 202 pay for assisted living?

HUD also administers the Section 202 Supportive Housing for the Elderly Program. This program’s goal is to provide seniors who are age 62 or older with housing that can offer additional support as they age. Support can include cooking, cleaning, transportation, and more.^[15] However, the supports available will vary, so it’s important to check with a prospective community to see if they can meet your loved one’s care needs. Section 202 housing is designed for senior needs but is not necessarily a designated assisted living community.

If your loved one wants to live in Section 202 housing, they’ll need to apply through their local multifamily regional centers or satellite office.

What’s the assisted living conversion program?

HUD offers the owners of eligible development properties the opportunity to designate some units as an assisted living facility through the assisted living conversion program (ALCP). Units converted to an assisted living facility must provide personal care assistance in addition to transportation, housekeeping, laundry, and meals.^[16]

To qualify for one of these units, your loved one needs to meet the admissions and discharge requirements for assisted living determined by state and local licensing or meet the HUD frailty requirements.^[16]

Who pays for assisted living when money runs out?

If your loved one is still living at home, you may wish to work with an elder law attorney to help plan for the future. They can guide you through your state’s local programs, help you determine your loved one’s Medicaid eligibility, and assist you with the application process. You can also use this time before a move to make sure you have a good sense of your loved one’s assets and determine if there are any other options to pay for assisted living.

Review the contract of any assisted living communities you’re considering to make sure you understand what happens when residents can’t pay rent. If possible, you may want to ask an elder law attorney to review the contract to determine whether any part of it can be negotiated. Unfortunately, assisted living residents can be evicted. And, as care needs increase, your loved one’s monthly bill will likely go up.

Alternatives to assisted living

Another consideration during this time is your loved one’s level of care. While Medicaid doesn’t cover the cost of room and board in assisted living, it does pay for Medicaid-approved skilled nursing facilities.^[17] If your loved one has needed more care lately, you may want to ask their doctor whether they’d recommend a nursing home instead of assisted living.

You may also want to consider a residential care home as a more affordable option. These homes typically house a small group of seniors but still offer assistance with activities of daily living. A Senior Care Advisor can help you find a group home or an assisted living community within your budget, all at no cost to you.

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References

Genworth. (2022, June 6). Cost of Care Survey.
U.S. Department of Veterans Affairs. (2022, November 29). 2023 VA pension rates for veterans. VA.gov.
U.S. Department of Veterans Affairs. (2022, October 12). Eligibility for veterans pension. VA.gov.
U.S. Department of Veterans Affairs. (2022, October 12). VA survivors pension. VA.gov.
U.S. Department of Veterans Affairs. (2022, October 12). VA Aid and Attendance benefits and housebound allowance. VA.gov.
Centers for Medicare and Medicaid Services. Cost sharing out of pocket costs. Medicaid.gov.
Centers for Medicare and Medicaid Services. Medicaid eligibility. Medicaid.gov.
Centers for Medicare and Medicaid Services. Home and community-based services 1915(c). Medicaid.gov.
USAging. Our mission and work.
Social Security Administration. Social Security disability insurance is coverage that workers earn.
Social Security Administration. (2022, October 7). Frequently asked questions.
Social Security Administration. Supplemental security income (SSI).
Social Security Administration. (2022, March). Supplemental Security Income (SSI) Publication No. 05-11000.
U.S. Department of Housing and Urban Development. Housing choice vouchers fact sheet.
U.S. Department of Housing and Urban Development. Section 202 Supportive Housing for the Elderly Program.
U.S. Department of Housing and Urban Development. Assisted Living Conversion Program (ALCP).
Centers for Medicare and Medicaid Services. Nursing facilities.

Meet the Author

Rebecca Schier-Akamelu

Rebecca Schier-Akamelu is a writer at OurParents. Her writing supports a person-centered approach to senior care and she’s written on a range of topics from home care to finances. She holds a certificate in digital media and marketing from Duke University and a bachelor’s degree from Creighton University.

Reviewed byCarol Bradley Bursack

The information contained in this article is for informational purposes only and is not intended to constitute medical, legal or financial advice or create a professional relationship between A Place for Mom (of which OurParents is a trademark) and the reader. Always seek the advice of your health care provider, attorney or financial advisor with respect to any particular matter and do not act or refrain from acting on the basis of anything you have read on this site. Links to third-party websites are only for the convenience of the reader; A Place for Mom does not recommend or endorse the contents of the third-party sites.

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