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Payment Options in Assisted Living
What is the Cost of Assisted Living?
The cost of assisted living varies with each residence. It will depend on the size and location of the apartment and the amount of services needed by a specific resident. Monthly fees are based on rent, utilities, food, housekeeping, personal care and other optional services and amenities. Assisted living costs are generally less than those for a skilled nursing facility because nursing homes are required to provide intensive, 24-hour skilled nursing and related care. In Massachusetts, monthly fees range from approximately $2,000 to more than $7,000. Because special care units and programs for people with memory loss and/or dementia provide additional staffing and services, they are typically at the high end of the fee range.
Different residences charge for rent and services in different ways. For example, some residences charge a basic monthly fee that includes some personal care services, while others have service packages, and yet others charge separately for all services on an “a la carte” basis. There may be charges for items such as guest meals, room service, special recreational events, transportation, personal laundry, etc. Ask each residence under consideration for a full disclosure of costs, including how and when costs may be increased.
Most people in Massachusetts today pay privately for assisted living. However, in some cases, additional financial assistance programs are available. Since every residence is different, Mass-ALFA encourages you to speak with and visit each residence individually to learn more about the payment options the specific residence accepts. Below you will find explanations of payment options that are accepted at various residences across the state including:
Group Adult Foster Care
Administered by The Executive Office of Elder Affairs, Group Adult Foster Care (GAFC) is a Medicaid program that reimburses providers for providing administrative and clinical oversight and daily assistance with personal care services to financially and clinically eligible elderly and disabled individuals who are at risk of institutionalization.
In order to qualify, participants in GAFC must:
Elder Affairs reimburses the provider for the provision of personal care services and the administration of the program. Effective April 1, 2008, the per diem reimbursement rate is $40.33. Approximately $1,150 per participant per month is reimbursed to the provider for services, while the resident remains responsible for the rent. See Supplemental Security Income Living Arrangement G (SSIG) for a detailed explanation of assistance with rent.
For more information about GAFC, visit massresources.org.
Senior Care Option (SCO)
A combined MassHealth and Medicare program that includes health care and social services, to help low-income seniors stay healthy and able to live in their own homes. A team of health professionals develops a plan of total individualized care for each member. Services are provided by a network of medical and other professionals, including a primary care doctor, nurses, specialists, and a geriatric support coordinator, who are part of a senior care organization. For more information about SCO, visit massresources.org.
Program of All-inclusive Care for the Elderly (PACE)
The PACE model of care is a national insurance program funded jointly by Medicare and Medicaid. PACE provides and coordinates all needed preventive, primary, acute and long term care services so that older individuals can continue living in the community. The PACE model is centered around the belief that it is better for the well-being of seniors with chronic care needs and their families to be served in the community whenever possible.
Although all PACE participants must be certified to need nursing home care to enroll in PACE, only about seven percent of PACE participants reside in a nursing home nationally. If a PACE enrollee does need nursing home care, the PACE program pays for it and continues to coordinate his or her care.
For more information, visit massresources.org.
Section 8 Housing Program
Section 8 is the federal government’s largest affordable housing assistance program. The program’s goal is to help elderly, disabled, and families with very low incomes afford housing in the private market. The Section 8 program is administered by local Public Housing Authorities (PHA). Benefits can be either a mobile voucher or “project-based.”
Mobile vouchers allow eligible recipients to choose any rental unit of their choice, including assisted living, as long as the landlord is a willing participant, and the unit meets the required levels of health and safety. When a tenant with a mobile voucher moves, the rental subsidy moves with her/him.
Project-based Section 8 is attached to a particular building and does not move with the tenant. A PHA can “project-base” up to 20% of its Section 8 funds.
To be eligible, a tenant’s income may not exceed 50% of the area median income. The tenant’s portion of the rent may range from 30% to no more than 40% of the tenant’s monthly adjusted income. The PHA determines a payment standard for the dwelling unit based on Fair Market Rents (FMR) of modest rental housing in the area. The difference between the two numbers determines the amount of the PHA rent subsidy, which is paid directly to the landlord from the PHA. Rents in an assisted living residence can be up to 110% of FMR. If the Section 8 is used in a building financed with Low Income Housing Tax Credits then the Section 8 rents may be set as high as the rents charged for the LIHTC-financed apartments. Additional information is available on the HUD website.
Low Income Housing Tax Credits
The Low Income Housing Tax Credit is a federally authorized program that assists in the production and preservation of affordable rental housing for low-income families and individuals. The program supports a broad range of activities including acquisition, new construction, and rehabilitation of existing rental properties. Tax credits can be used to support the acquisition and/or rehabilitation of existing structures for rental use, including distressed or failed properties, or the new construction of rental projects.
In Massachusetts, the Department of Housing and Community Development (DHCD) is allocated a per capita dollar amount each year to be awarded to housing providers according to strict application requirements. Due to the high demand and limited supply of tax credits, the credits are awarded on a very competitive basis. Low-Income Housing Tax Credits are a dollar-for-dollar reduction to the owner’s federal tax liability each year for up to ten years that the community remains in compliance with program regulations.
If the housing owner has a large federal tax liability, s/he may keep the credits and use them against the liability. Generally speaking though, the owner “sells” the credits to a company (i.e., Proctor and Gamble) or syndication company (i.e., SunAmerica), and the money brought in by the sale is used as financing for the assisted living community. The new owner of the credits claims the credits against their federal tax liability for a period of ten years as long as the housing provider remains in compliance for at least 30 years.
One of the most important requirements of the Housing Credit program is to set aside a certain percentage of the total number of units in the community for households whose gross annual income is at or below the income limit established annually by the Department of Housing and Urban Development (HUD). The owner must make a set-aside election of 20/50 or 40/60, which means that at a minimum, if the owner chooses 20/50, 20% of the total units in the community must be rented to residents with gross annual incomes less than or equal to 50% of the area median gross income (AMGI) adjusted for household size, or if the owner chooses 40/60, the same formula is used. Some owners include deeper levels of affordability (a greater number of units) to make their applications for credits more appealing. In addition, ten percent of the total units must be reserved for persons or families earning less than 30% of area median income. Many housing providers who have been awarded tax credits use GAFC participants to meet this set-aside requirement.
In accordance with the regulations, the housing provider may only charge the tax credit residents the “rental” fee established by HUD. The Housing Credit program does not, however, cover services not associated with use and occupancy of the unit, therefore, the assisted living residence may charge service fees in addition to the rental fee. For more information contact DHCD’s division of Private housing at 617-727-7824.
Shelter Plus Care Subsides
The McKinney Shelter Plus Care Program offers help with rent and other supportive services to both individuals and families who are homeless due to a disability, primarily mental illness, chronic substance abuse and/or HIV/AIDS. Through this program, residents pay not more than 30% of their adjusted income towards the total housing cost. This program is administered through DHCD’s Division of Public Housing and Rental Assistance. Learn more on mass.gov.
Comapnion suits are units designed to be shared by two residents, usually at a cost that is less than what the unit would cost if it was occupied by only one resident.
Some residences offer financial scholarships for residents with varying needs and income levels through their own fundraising and/or endowment efforts. Since these financial scholarships are overseen by each residence and/or their managment or parent company, it is important to speak with the residence individually about the application process and terms of the scholarships.
Supplemental Security Income (SSI) is a joint federal and state program administered by the Massachusetts Department of Transitional Assistance (DTA). SSI is a separate program from Social Security and supplements an individual’s existing income in order to assure a minimum standard of living for the individual’s particular living arrangement. Each of the five SSI living arrangements is associated with a different benefit amount:
As of January 1, 2009 the SSIG benefit amount was set at $1,128/month. The Social Security Administration does not count the first $20 of the individual’s income in determining the SSI benefit. Thus in order to access, an individual needs to have a countable monthly income less than $1,148. For a couple the SSIG benefit amount is $1637/month for the couple and the Social Security Administration does not count the first $20.00 of the couple’s income in determining the SSI benefit. Thus in order to access, the couple needs to have a countable income of less than $1,657.
In order for an individual to access the SSIG benefit s/he must:
SSIG beneficiaries use the benefit to “buy” room and board in assisted living. The SSIG benefit makes up the differences between the individual’s income from other sources and the SSIG benefit amount. For example, Mrs. R’s gross monthly income is $550 comprised of $400/month Social Security and $150/month pension. If Mrs. R lived in certified assisted living and participated in Group Adult Foster Care, her monthly SSI check would be $561/month, which is the difference between $1,111 (the SSIG benefit amount) and $550 (Mrs. R’s gross monthly income). SSIG beneficiaries use the benefit to “buy” room and board in assisted living.
Medicaid is a state and federal health insurance program for the poor, and is administered in Massachusetts by The Executive Office of Elder Affairs (Elder Affairs). If an individual is financially eligible for any of the five SSI living arrangements, s/he is “categorically” eligible for Medicaid benefits. In other words, if the individual is low-income and eligible to receive money from the state to bring her/him up to the minimum income for her/his living arrangement, then s/he is automatically eligible for health insurance coverage through Medicaid.
The combination of SSIG benefits paid directly to the resident, the resident’s Social Security benefits and other personal income and GAFC reimbursement by Medicaid paid to the certified GAFC provider, totals approximately $2,200/month. While this amount generally does not cover all expenses incurred by the assisted living provider, it has encouraged providers to make more units available to low-income, frail elders.
For more information contact the Executive Office of Elder Affairs 617-727-7750 and the Social Security Administration at 1-800-772-1213 or visit www.ssa.gov.
The Veteran’s Administration offers a benefits program for veterans and their spouses who live in nursing homes, assisted living residences or are receiving home care. The “Aid and Attendance” (A&A) program is an improved pension program for veterans who require “care and assistance on a regular basis.” This assistance is for eligible veterans or surviving spouses who have medically documented needs, such as assistance with ADLs due to blindness, limited mobility, physical limitations or mental cognitive problems, including Alzheimer’s disease.
The A&A benefit is in addition to the monthly pension and is available only for veterans and their spouses receiving a pension from the Veteran’s Administration.
To qualify, the veteran must meet certain eligibility criteria, such as:
For more information visit the Department of Veterans Affairs. To apply, please contact VA Benefits at 800- 827-1000 for the Veteran Service Office (VSO) in your area.
Some long-term care insurance policies are now offering coverage for some of the costs associated with assisted living. Since policies can vary widely, please speak with your insurance broker regarding the specifics of what your policy covers. Additionally, if you are considering buying a policy, it is important to read and compare policies carefully.