How to pay for assisted living

Assisted living is predominantly private pay, which means the family pays the monthly fee from income, savings or the sale of a home until a benefit begins or the money is exhausted. Planning the payment sequence in advance is the difference between a sustainable arrangement and a crisis.

The payment sequence

Most families start with private pay from Social Security, a pension, investment income and savings. As those resources decline, the resident may become eligible for a Medicaid waiver that covers the care portion of the fee, if the community accepts it and a slot is available.

The sequence matters because Medicaid has asset and income limits, and spending down to qualify requires planning. Gifts and asset transfers within the look-back period can create a penalty, so an elder-law attorney should be involved before any large transfer.

Some communities offer a continuing care contract that bundles independent living, assisted living and nursing care, often with a large entrance fee. The contract is complex, and the refundability of the entrance fee is the term to understand.

What each source pays

Medicare generally does not pay for assisted living, because it is considered custodial care. It may cover skilled nursing or home health for a limited period after a qualifying hospital stay, and those rules are specific.

Medicaid can pay for long-term care for people who meet the care and financial eligibility rules, and the rules vary by state. Many but not all assisted living communities accept Medicaid waivers, and the number of waiver slots is limited.

Veterans may qualify for benefits that help pay for care, including a pension with an aid-and-attendance supplement for those who need help with daily activities. The Department of Veterans Affairs is the authority, and the application is separate from the facility's process.

• Ask whether the community accepts Medicaid waivers or only private pay.
• Ask what the monthly fee includes and what is billed as an add-on.
• Ask about the entrance fee and whether it is refundable.
• Ask what happens if care needs increase beyond the licence.
• Check the state licensing and inspection record.

Source: Statistics Canada table 326-0020, monthly, not seasonally adjusted. Senior care has no single published price series.

The published context

There is no single official price for assisted living because the fee depends on the unit, the location and the level of care. Statistics Canada publishes a consumer price index that includes categories relevant to senior care, and the table below is that official series. It is an index, not a facility price.

Use a published index to check whether a community's annual increase is in line with the official trend, and use the facility's own fee schedule for the actual number. A national average from a commercial site is a survey of varying scope.

Funding the gap

If the family must bridge a period before a benefit begins or a home is sold, the options are a loan against the home, a sale of assets or family contributions. Borrowing against a home to fund care has long-run consequences and should be discussed with an elder-law attorney.

The example below uses the Federal Reserve H.15 bank prime loan rate and a standard amortising schedule. It is arithmetic from a published rate, not a quote, and it is relevant only as a bridge rather than a long-term plan.

Worked example, with the assumption stated: $25,000 borrowed at the Federal Reserve H.15 bank prime loan rate of 6.75% (published 2026-09-16) repaid over 60 months on a standard amortising schedule. That gives a monthly payment of $492.09, total interest of $4,525.19 and a total repayment of $29,525.19. This is arithmetic from a published rate, not a quote: a real APR includes fees and is set by the lender from your credit, so your figures will differ. Borrowing for care is a bridge, not a strategy. The interest compounds while the underlying asset is being consumed, which is why legal advice comes before the loan.

A reverse mortgage or a home sale may be a better fit than a conventional loan for a homeowner who intends to stay in the home or whose estate will fund the care. Each has different costs and consequences, and the choice is legal and financial rather than purely arithmetic.

Questions before signing a contract

Ask what the notice period is for moving out and whether the monthly fee continues after a move. Ask what happens to the entrance fee if the resident leaves or dies. Those terms are financial commitments and belong in the contract.

Ask how the community handles a resident whose needs increase. Some can provide more care, some require a move to a nursing facility, and the answer determines whether the arrangement is stable.

Visit at different times of day and ask to speak with a current resident's family. The licensing authority's inspection record is public and is a better guide than a tour.

Planning before the crisis

The best time to plan is before the move. A family that understands the fee schedule, the waiver rules and the asset limits in advance can structure the finances legally and avoid a rushed decision.

An elder-law attorney who knows the state's Medicaid rules is the right professional for that planning. The rules are state-specific and change, and a general financial adviser may not know them.

Put the wishes in writing, including a durable power of attorney and a health-care directive. Those documents make it possible to act when the person can no longer decide, and they cost little to prepare.

Where these figures come from

Related pages

• Assisted living costs by state and province
• Assisted living vs home care
• Memory care costs
• Loan payment calculator

Frequently asked questions