For many elderly people and their families, finding the money to pay for assisted living is no easy task. With the average monthly costs running about $4,500 or higher, many are left to ask, how can I pay for assisted living with no money?

Fortunately, there are programs available to help. Here are five ideas for finding financial assistance to cover your long-term care (or that of your family member). 

#1 Secure a Reverse Mortgage

A reverse mortgage for retirement may be an option for cash-strapped seniors who need the benefits of assisted living.1 

While you’re not selling your house to pay for assisted living, when you reverse your mortgage, you essentially trade in your home’s equity for spendable cash. Unlike some forms of financial assistance, there are no stipulations on how you spend the money from a reverse mortgage. In addition to assisted living services, elderly people and their families can use the money to pay to:

  • Pay off debt
  • Pay for health care or medication
  • Pay for other living costs 

One of the best reverse mortgage facts is that they don’t require monthly payments as other loans do, but there are some drawbacks. For example, the fees and origination costs associated with a reverse mortgage can be quite steep. They’re usually rolled into the loan, which means they acquire interest. It’s important to know the pros and cons of reverse mortgages for retirement

#2 Use an Equity Line of Credit

Homeowners who are looking for ways to pay for assisted living services for themselves or a loved one often turn to their equity as a source of funding. One way of doing that is by securing and learning how to use home equity lines of credit.1

Equity credit lines use your home as collateral while you use the equity value to pay for assisted living residence, medical bills, or other expenses. But, be aware that equity lines of credit come with a few complications that prevent some borrowers from pursuing it, like:

  • Credit score qualifications
  • Monthly payments
  • Varying costs 

#3 Medicaid 

Medicaid coverage is another solution for paying for assisted living care with no money. The program offers at least two popular ways for helping low-income seniors manage their living costs and expenses:2

  • 1915 Waivers
  • Home and Community Based Services Waivers (HCBS)

It’s important to keep in mind that assisted living solutions through Medicaid may not be available in the state where you live. Currently, these options are only available in 22 states, although that number is expected to rise as coverage is expanded.

Additionally, Medicaid eligibility requirements vary significantly from state to state, as do the specific benefits awarded. 

#4 State and Local Assistance Programs 

Seniors who are wondering how to cover assisted living costs will be glad to know that there are also a few non-Medicaid programs that may be able to help. These programs are run by agencies that operate at both the state and local community levels. 

The programs that are available, the benefits they offer, and the eligibility qualifications they carry will depend on the state you live in. However, these may include:

  • Community care services – Your local Agency or Council On Aging may offer services that can help you cover assisted living costs or provide assistance with other expenses, like medical care and chore services.3 
  • State programs – Many states offer assistance programs for seniors. These programs vary greatly from state to state, and may include programs that award funds to seniors directly or provide low-cost housing in state-run facilities, among other options.2

#5 HUD’s Section 202 Program

The United States Department of Housing and Urban Development provides senior living assistance to low-income elders over 62 through its Section 202 Program.2 Established in 1959, this federally-funded program awards money to states and localities to help non-profits build and operate assisted and independent living facilities for the elderly.

These assisted living facilities usually offer a range of services to help seniors. Community activities are often a large feature of HUD centers, which may also offer:

  • Dining services
  • Transportation services
  • Housekeeping 

Key Takeaways

When it comes to paying for assisted living, there are many avenues to explore. Elders and their families should explore assistance options from Medicaid or other state and local organizations, reverse mortgages and equity lines of credit, or other ways to convert their home’s value for cash.

Sources: 

  1. Senior Care. If You Can’t Afford Assisted Living. https://www.seniorcare.com/assisted-living/resources/if-you-can-t-afford-assisted-living/ 
  2. AssistedLiving.org. Assisted Living Options for Low-Income Elders. https://www.assistedliving.org/assisted-living-near-me/assisted-living-options-low-income-elders/ 
  3. UMH.org. How to Afford Senior Living When the Money Runs Out. https://www.umh.org/assisted-independent-living-blog/bid/302278/how-to-afford-senior-living-when-the-money-runs-out