Older adults today may find themselves in a bind when they need to move to a senior living community without knowing how to pay for senior care. Though senior living may feel like a large expense, a number of solutions can help older adults fund their move and maintain their residency for as long as they need it. 

When private funds aren’t enough, seniors may be able to turn to Veterans benefits, insurance products, and short-term bridge loans. Aid and Attendance, a benefit offered through the U.S. Department of Veterans Affairs (VA), can provide additional income to qualifying Veterans and their surviving spouses. Long-term care insurance can reimburse policyholders up to hundreds of dollars a day for long-term care services. Seniors who need cash flow assistance while they wait for permanent funding sources like those mentioned above or the proceeds of a home sale can use a bridge loan until the funds come through. Here, we’ll go over these three methods that can help pay for senior care so you can know your options for covering the cost of senior living.

The Aid and Attendance benefit provides monthly income for Veterans

The U.S. Department of Veterans Affairs (VA) offers a variety of benefits that help Veterans access and cover the cost of care, including the Aid and Attendance benefit. It provides additional monthly income directly to qualifying Veterans and even their surviving spouses, and the recipients can use the funds to pay for long-term care costs, such as rent at a senior living community or the cost of a home care provider.

To qualify for Aid and Attendance, a recipient must meet military service criteria, health requirements, and income and asset limits:

• Military service: The Veteran applying (or to whom the surviving spouse was married if the spouse is applying) must have served in an approved wartime period, including at least one day of active duty during that time. They do not need to have served in an active combat zone. 
• Health needs: The applicant must demonstrate the need for assistance with completing at least two activities of daily living, have a cognitive impairment requiring that they live in a facility to remain safe, or be considered legally blind.
• Income and asset limits: The applicant’s income and net worth must not exceed a certain dollar amount, which in 2024 is about $150,000. VA assesses this amount and usually increases it slightly each year.

Applying for Aid and Attendance can help a senior Veteran or surviving spouse receive extra monthly income, which can go a long way toward paying for essential care in a senior living community. Some companies offer advice and services to help individuals with the process of filing the long and complex application.

File a claim on your long-term care insurance policy

Long-term care insurance is a type of insurance policy that helps individuals cover costs of care that typical health insurance, like Medicare, doesn’t cover. It may be surprising to some, but traditional Medicare does not cover the cost of assisted living or home care on a long-term basis. The reason is that Medicare is health insurance, which pays for medical care services. The typical services that assisted living communities and home care services provide aren’t considered medical services. Receiving help bathing and dressing, which are common services assisted living and home care services provide, are considered custodial or personal care services by Medicare. Since they are not medical services, Medicare does not cover those costs.

Long-term care insurance helps cover these costs and can be a lifesaver for many individuals who need to pay for senior care. If a policyholder can demonstrate that they have met the health requirements to use their insurance policy, they can file a claim or get help filing a claim and receive reimbursement for the long-term care services they receive at their senior living community. While the policyholder must pay for the costs upfront, they can be reimbursed when they file each claim (usually in 30- to 90-day increments, depending on the insurance provider).

Use a bridge loan to cover immediate expenses

A bridge loan is a short-term loan that can help the borrower pay for expenses while they wait for their permanent funding to become available. These types of loans can be helpful to seniors because lenders can typically approve a loan quickly — often in as little as one business day. This immediate access to necessary funding can solve cash flow issues for seniors who need to move to a senior living community quickly, such as after a hospitalization.

Seniors often obtain these types of loans when they want to sell their house and move into a senior living community. Instead of waiting for the house to sell before moving in, the senior can move in immediately and use the loan funds to pay any move-in fees, moving costs, and first months of rent. When the house sells, the senior pays the loan back using the proceeds from the house sale. They can then use the remaining funds to continue to pay their senior living expenses.

Another example of why a senior might use a bridge loan is if they need to move to a senior living community and have applied for financial assistance programs or Veterans benefits, like Aid and Attendance. The Aid and Attendance benefit can provide over $2,000 per month in additional income to qualifying Veterans and their surviving spouses, but the application can take a few months to process. If a senior has applied for this benefit and awaits approval, they may obtain a bridge loan to help cover monthly costs of care and then, when awarded the benefit, pay back the loan. 

Seniors don’t need to pay for senior care out of pocket

If an older adult needs the help of a senior living community, a number of solutions are available to help them pay for senior care. While some older adults can tap into their retirement savings or sell assets they no longer need, many others need extra help paying for the necessary care. In and among solutions like the Aid and Attendance benefit, long-term care insurance, a bridge loan, or a combination of all three, older adults can find ways to pay for their residency at a senior living community.