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What Insurance Specifically Covers Assisted Living?
Date Updated: July 26, 2024
Written by:
Rachel Lustbader is a writer and editor with a background in healthcare and technology. Her work has been published on websites including HealthCare.com, BiteSizeBio.com, BetterHelp.com, Caring.com, and PayingforSeniorCare.com. She studied health science and public health at Boston University.
Both of Rachel’s grandmothers had very positive experiences in senior living communities, and Rachel saw firsthand the impact that kind, committed caregivers and community managers can have on seniors’ and their family members’ lives. With her work at Caring, Rachel hopes to help other families find communities, caregivers, and at-home products that benefit elderly loved ones and make life less stressful for family caregivers
No insurance specifically covers assisted living. However, long-term care insurance covers specific services in diverse settings, including assisted living facilities, depending on the plan. Precise coverage, care settings, premiums and other terms vary among providers and plans.
Types of long-term care insurance
Seniors have two main long-term care insurance options available: traditional and hybrid. Traditional plans provide either a cash sum for seniors to self-pay for their care or reimbursement for approved services. Because plans stipulate what settings they apply to, individuals should carefully consider their options when taking out insurance. Some assisted living communities accept payments directly from insurance companies. Providers require that individuals hold policies for a specified period before making payments. Additionally, plans usually have spending limits and fixed lifetimes, so funds can run out.
Hybrid policies combine traditional long-term care coverage and basic life insurance, meaning there’s always a benefit. If older adults require long-term care services during their lifetime, plans operate per long-term care cover. On the other hand, if seniors never need this, a beneficiary receives a death benefit when the senior passes away. Care payments reduce death payouts; depending on overall care costs, there could be no final payment for survivors.
Long-term care insurance coverage
Although coverage varies among providers and plans, insurance usually pays for support with personal care and daily activities such as bathing, feeding and grooming. It also often covers housekeeping, laundry and meal preparation alongside health-focused services, including medical equipment and therapies. Insurance payments can also cover room and board in an assisted living facility.
Some policies cover memory care for seniors diagnosed with Alzheimer’s disease or other forms of dementia after coverage began. Traditional and hybrid plans cover similar services, but individuals must carefully check policy wording. Policies provide daily or monthly payments, with payout amounts decided at the time of application and linked to premiums. Because of spending limits, plans may not cover the full cost of assisted living, leaving seniors with a shortfall to make up using other means.