Here are the eight most common ways to fund assisted living. The payment method that’s best for your family will depend on your unique circumstances. Many families end up paying for senior through multiple sources, including the PACE and the Low Income Housing Tax Credit Programs available in MA.

1. Income and Savings
Using personal income or savings to pay for assisted living is the simplest route. But in this trying economic climate, $3,100 or more is beyond what many seniors can afford.

2. Long-term Care Insurance
If your older loved one has long-term care insurance, in most cases it covers assisted living, although it depends on specifics of the policy. Unfortunately, according to the Long-Term Care Association, less than 3% of Americans have long-term care insurance. If your older loved one is not already covered, becoming covered would be prohibitively expensive. Generally long-term care insurance is only affordable when purchased during one’s middle-age or younger. But if your loved one iscovered, it could be a godsend.

3. Veteran’s Benefits
The Department of Veterans Affairs (VA) has assistance programs that can help to pay for care for older veterans who served during wartime (but not necessarily actual combat). Assistance is also available to widowed spouses of wartime veterans.

4. Home Equity
While not always the preferred option, many seniors sell their home to pay for their care. For those who need assisted living immediately, but aren’t able to sell their home right away, some communities can offer rent deferments that are paid back when the house finally sells.

5. Selling a Life Insurance Policy
This practice, known as life settlement, involves selling your policy to another person or a company, who pays the premiums from then on, but collect the benefit when you die. It’s understandable that people would be reluctant to pursue a life settlement, particularly if it negatively affects the financial future of their heirs, but it’s still good to be aware of this strategy.

6. Pooling Family Support
A senior who cannot afford assisted living often relies on some financial support from grown children or other family members.

7. Reverse Mortgage
A reverse mortgage allows you to borrow money based on equity in your home, which is paid back when you sell the home or move out. You’d think a reverse mortgage wouldn’t be helpful for a senior who is moving to assisted living because the reverse mortgage stipulates you must reside in your house, but in some cases it can useful. Imagine an elderly couple who own their home outright. The husband is healthy, but the wife has advanced Alzheimer’s disease. The husband is looking for professional care for his wife. They could use a reverse mortgage to pay for the wife’s care at an assisted living community with memory care, while the husband could remain at home.

8. Medicaid
In some states, Medicaid covers care at assisted living communities. But Medicaid, which is not to be confused with Medicare, is only available to seniors who have little or no assets, so it’s generally an option of last resort.