The monthly bill for assisted living depends on where you live, the size of the apartment and, above all, how much help your parent needs. Most families pay with a mix of income, savings and sometimes the proceeds of a home sale, and some get help from insurance or public benefits.
This guide explains how communities set their prices, every common way to pay, and how to build a plan that lasts. For a broader look across all types of care, see paying for senior living.
How assisted living is priced
| Model | How it works | Good to know |
|---|---|---|
| Base rate plus care levels | Rent and basics, plus a charge for the level of care | Most common; levels rise as needs grow |
| All-inclusive | One monthly rate covers housing and care | Easier to budget; may cost more if needs are light |
| Base rate plus services | Pay for each service used | Can add up as needs grow |
Ask each community for its full price list in writing.
The base rate usually covers the apartment, meals, housekeeping, activities and some transportation. Care is often priced after an assessment of your parent's needs, and reassessed over time. Our article on levels of care explains how this works.
Private funds
- Income. Social Security, pensions and annuities often cover part of the monthly cost.
- Savings and investments. Bank accounts, retirement accounts and investments are common sources. Withdrawals from retirement accounts can have tax effects, so plan them with an adviser.
- Family help. Some families share costs. Agree in writing on who contributes and what happens if costs rise. You may be able to claim a parent as a dependent if you meet IRS tests1.
Most assisted living is paid privately2. Add up monthly income and assets to see how long private funds may last at the prices you're seeing.
Using the house
- Selling. A home sale often funds a move. Some or all of the gain may be excluded from income if IRS ownership and use tests are met3.
- Renting. Rental income can help cover monthly costs while keeping the home.
- Bridge loans and reverse mortgages. Some families use short-term loans while a house sells. Reverse mortgages are another way to borrow against home value2, but they're generally designed for people staying in the home, so get independent advice.
Our downsizing tips can help if a sale is part of the plan.
Long-term care insurance
If your parent has long-term care insurance, check whether it covers assisted living, the daily or monthly benefit, the elimination period and the benefit triggers. Most policies pay once a person needs help with two daily activities or has a severe cognitive impairment4. Call the insurer early to start a claim.
Read moreLong-Term Care Insurance: What It Covers and How It Works
Veterans benefits
Wartime veterans and surviving spouses who qualify for a VA pension may get Aid and Attendance, an added monthly payment for people who need help with daily activities5. It can go toward assisted living. VA doesn't pay assisted living rent directly, though VA health care may cover some extra services6.
Read moreVA Aid and Attendance: Who Qualifies and How to Apply
Medicaid
Medicare doesn't pay for assisted living7. Medicaid may help, depending on the state and your parent's eligibility8. In many states, waiver programs pay for care services in participating communities, while the resident pays room and board from their income9.
Read moreDoes Medicaid Pay for Assisted Living? How Waivers Work
Tax breaks
Some assisted living costs may count as deductible medical expenses, particularly for people who are chronically ill and receive care under a plan prescribed by a licensed health care practitioner. IRS Publication 502 explains the rules10. A tax professional can help you work out what qualifies.
Ways to keep costs down
- Compare several communities. Prices for similar care can differ a lot, even in the same town.
- Consider a smaller or shared apartment. A studio or companion suite usually costs less than a one-bedroom.
- Look at small care homes. In some areas, licensed care homes cost less for the same level of help. See assisted living vs. care homes.
- Ask what's optional. Some charges, like extra housekeeping or premium meal plans, may not be needed.
- Review the care level regularly. If your parent's needs improve after an illness, ask for a reassessment.
- Use free help. Your Area Agency on Aging may know of local programs that can help11.
Whatever you choose, keep a simple monthly budget and review it every few months, so changes don't take you by surprise.
Build a payment plan
- Get real prices. Ask two or three communities for written prices at the level of care your parent needs now.
- List all income and assets. Include benefits and insurance.
- Estimate how long funds last. Factor in likely price increases and higher care levels over time.
- Line up benefits early. Applications for VA and Medicaid can take months.
- Ask about Medicaid. Find out whether the community accepts Medicaid and what happens if money runs out.
- Get advice. A financial planner, elder law attorney or SHIP counselor can help with complex situations12.
Ready to compare communities? Our assisted living costs guide and tour checklist are good next steps.
