Is Assisted Living Affordable?

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Assisted living facilities are designed for older adults who want to lead active lives while having access to the care, support, and assistance they need. While over 80% of older adults want to age in place, making the move to assisted living may be the best option for some. However, many seniors may be reluctant to make the move for one reason. How much does assisted living cost and how are they going to pay for it? Is it affordable? If you’re in that boat now, you’re in the right place. Here’s everything you need to know about the cost of assisted living in 2023.

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How Much Does Assisted Living Cost?

The affordability of assisted living can vary depending on several factors, including the location, level of care needed, amenities provided, and the financial resources available to the individual or their family. Additionally, assisted living costs typically include expenses such as accommodation, meals, personal care assistance, utilities, and amenities. According to a 2021 Genworth survey, the average monthly cost of assisted living in the United States is around $4,500. However, costs can be significantly higher in certain areas, particularly major cities or regions with higher living expenses.

While the cost of assisted living may seem expensive, it’s important to consider the overall value and the services provided. Assisted living communities offer a comprehensive level of care, support, and amenities that can contribute to the well-being, safety, and social engagement of the residents. Additionally, the cost of assisted living is often lower than that of nursing home care, which provides a higher level of medical and skilled nursing services.

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Five Most Expensive States for Assisted Living

The affordability of assisted living depends on multiple factors, especially location. Unfortunately, some states have more expensive long-term care costs than others. Here are the five states that have the most expensive assisted living costs.

New Jersey

The Garden State’s long-term care costs are no picnic. Unfortunately for older adults from New Jersey, the average cost of assisted living is around $5,893 per month. Yikes!

New Hampshire

New Hampshire is the fifth smallest state in the U.S.—but not when it comes to assisted living costs. Sadly, this tiny state comes with a big price tag, with assisted living costs coming in at around $5,644 per month.

Alaska

Alaska is many things: the 49th state, home to 17 of the tallest North American mountains and over 100 volcanos, and the beautiful Northern Lights. While one of the states that boasts the most natural beauty, it also has some of the most expensive assisted living costs in the nation. The average monthly cost is $5,514, only a hundred dollars less than New Hampshire.

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Massachusetts

Massachusetts may be small, but it’s brimming with history, tourist attractions, and the incredible fall foliage that all of New England is famous for. Sadly, Massachusetts is number four on the list for the most expensive assisted living costs. Average monthly costs weigh in at around $5,421.

Delaware

Like New Hampshire, Delaware is a small state with a hefty price tag. It may boast tax-free shopping, but assisted living costs will run you around $5,286 per month.

Five Least Expensive States for Assisted Living

Now that we’ve got the bad news out of the way, here’s the good. We’ve also got a list of the five LEAST expensive states for assisted living. Keep reading to find out more.

Georgia

Gladys Knight & the Pips once sang about catching a midnight train to Georgia. You may think Mrs. Knight was onto something when you hear about the cost of assisted living in The Peach State. That’s because Georgia boasts the LEAST expensive assisted living costs, coming in at around $3,045 per month.

North Dakota

North Dakota is home to bison, moose, bobcats…and some of the most affordable assisted living costs in the nation. If you want to move into an assisted living facility here, it’ll run you around $3,069 per month.

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Missouri

Meet me in St. Louis, Louis. Meet me at the…assisted living facility? At least, you might want to go there once you hear about the average monthly cost of assisted living in Missouri! It comes in at around $3,084.

Nevada

Nevada is the perfect place to spin a roulette wheel and take your chances at the slot machines. However, one thing in The Silver State isn’t a gamble. You can bet that you’ll be getting some of the most affordable assisted living costs in the nation, at around $3,123 per month.

South Dakota

Note to self—the Dakotas are extra affordable. At least, when it comes to assisted living! Like its northern counterpart, South Dakota boasts affordable monthly assisted living costs. Moving into an assisted living facility in this state will cost around $3,138 per month.

Why Do Assisted Living Costs Vary from State to State?

Senior Woman sitting in an armchair thinking

States where the cost of living is lower will have lower long-term care costs. For example, an assisted living facility in a rural region of Kentucky will cost significantly less than an assisted living facility in the heart of Las Vegas. Real estate prices and property values vary widely across states. Assisted living facilities often incur costs related to property acquisition, maintenance, and taxes, which can contribute to different prices.

States with higher minimum wages, higher labor demand, or higher costs of employee benefits may have higher assisted living costs. The cost of healthcare services, including medical care and medication management, can vary from state to state. Assisted living facilities may need to adjust their pricing based on the local healthcare landscape. Of course, Medicaid policies can impact pricing. States with more robust Medicaid programs may have facilities that can accommodate residents with lower income levels. Only forty-four states’ Medicaid programs cover assisted living.

Make sure that you understand your state’s requirements and coverage levels if you plan to use Medicaid to pay for assisted living!

Click here to view the State Overviews at Medicaid.gov to find out more about each state’s Medicaid programs.

Who Pays for Assisted Living?

The cost of assisted living is typically the responsibility of the individuals who reside in the facility or their families. Unlike nursing homes, assisted living is often considered a private-pay option. Many individuals use their personal savings, retirement funds, or income from pensions and Social Security to cover the costs of assisted living.

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Individuals and their families should carefully assess their financial situation and explore the available options for covering the expenses of assisted living. Additionally, don’t be afraid to consult with a financial planner or elder law attorney for further guidance. Bear in mind that Medicaid may cover some services in assisted living in certain states. However, eligibility requirements vary and not all assisted living facilities accept Medicaid. Make sure to do your research!

How Can I Pay for Assisted Living?

Elderly Asain man in a wheelchair holding cane

Paying for assisted living can be a significant financial undertaking. Even in the more affordable states, like Georgia and North Dakota, monthly fees can take a toll on any bank account. While many people opt to draw from their savings, there are other options, as well! Here are some of the ways that people can pay for assisted living.

Long-Term Care Insurance

If the individual or their family has a long-term care insurance policy, it can help cover some or all of the costs of assisted living. However, it’s important to note that coverage may depend on the policy terms and coverage limits.

Veterans Benefits

Veterans and their surviving spouses may be eligible for financial assistance through programs such as Aid and Attendance or Housebound benefits offered by the Department of Veterans Affairs. These benefits can help offset the cost of assisted living.

Medicaid

Medicaid is a joint federal and state program that provides healthcare coverage for low-income individuals. This program covers a wide range of healthcare services, up to and including assisted living services. Some states offer Medicaid-funded assisted living programs that cover the cost of care for eligible individuals with limited income and assets. Medicaid eligibility and coverage rules vary by state, so make sure you understand the specific requirements and available programs for your state!

Social Security and Pension

Social Security benefits and pensions can contribute to covering the cost of assisted living. Review the income streams available and calculate how they can be allocated toward housing and care expenses.

Assistance Programs

Some states or local organizations may offer financial assistance programs targeted toward seniors or individuals with disabilities. Research these programs to determine if any are available in your area. For example, Minnesota boasts an Elderly Waiver program that may help qualifying seniors pay for assisted living. Nebraska also offers something similar with its Aged and Disabled Waiver, provided the senior is at least sixty-five and makes no more than $1,215 per month. Look into your state’s assistance programs and find out if you qualify for assistance!

5 Ways to Make Assisted Living More Affordable

There’s no way to sugarcoat it—assisted living is expensive. However, there are ways that you can make it more affordable! Here are 5 of those.

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1. Take out a reverse mortgage.

A reverse mortgage can potentially make assisted living more affordable by providing additional funds to cover living expenses. Available to homeowners aged 62 and older, this type of mortgage allows older adults to convert a portion of their home equity into cash. With this type of loan, the homeowner isn’t required to make monthly mortgage payments. This can free up cash flow, which can be particularly helpful for individuals who need additional funds to cover the costs of assisted living.

However, it’s important to note that this type of loan does have drawbacks. The reverse mortgage must be repaid when the homeowner moves out of the home permanently, sells the home, or passes away. Additionally, this type of loan can impact beneficiaries and the inheritance they receive. Reverse mortgages often come with fees and closing costs, some of which can be hefty. Always do your research about the lender you choose and look into all your options before taking out a reverse mortgage.

2. Consider shared accommodations.

Opting for shared accommodations within the assisted living facility can often be more cost-effective than private rooms. Many facilities offer shared living spaces, allowing residents to share the costs while still receiving necessary care and support. While you would be giving up some of your privacy, you’d also be cutting costs. Make sure that you get along with your potential roommate before you move in anywhere. While saving money is important, so is your peace of mind!

3. Look for older facilities.

Newer doesn’t always mean better, but it often means more expensive. While newly-built facilities may have all the bells and whistles we all want in a potential living space, they can also bleed your bank account dry. Look for older facilities that are still well-maintained, clean, and comfortable. Don’t discount an assisted living facility just because it’s been around for longer or is housed in an older building. In this case, the idiom “Don’t judge a book by its cover” rings true!

Alternatively, don’t choose an older assisted living facility just for the affordability. Make sure it still has all the care services you need. Check online ratings and visit it in person to make sure it’s equipped with the appropriate safety features. It’s also important to meet the staff and get a feel for how they care for the residents. Don’t cut corners—but also don’t be afraid to choose an older facility just because it’s not as flashy as its newer counterparts.

4. Consider community-based services.

Explore community-based services and resources that can provide support at a lower cost. This may include home health services, adult day programs, and community centers that offer assistance with daily activities, transportation, and social engagement. By utilizing these services, you may reduce the need for more intensive and costly assisted living arrangements!

5. Use veterans benefits, assistance programs, and long-term care insurance.

If the person needing assisted living is a veteran or the surviving spouse of a veteran, explore benefits provided by the Department of Veterans Affairs (VA). The Aid and Attendance pension is one such benefit that may help cover the costs of assisted living for eligible individuals. Of course, you can also use your long-term care policy or look into assistance programs. Always exhaust all your options before paying out of pocket!