If you’re exploring options for an Assisted Living or Memory Care community for yourself or a loved one, you might experience sticker shock when you initially see the prices. While the expense varies based on location and the level of care, a recent Genworth Financial study found the median national cost of an Assisted Living community was $4,500 per month. But since many of these communities are all inclusive, a comparison of the true costs of your current living situation (including utilities, maintenance, taxes, groceries, etc.), and the new community may not be so far apart.

Even so, the bills still need to be paid, and if you don’t have enough savings, investments, or other retirement income on hand to pay out of pocket, here are the most common alternatives.

What Will Medicare & Medicaid Pay?

Medicare only covers short-term, non-custodial care, so it does not cover room and board or assistance with activities of daily living at an Assisted Living or Memory Care community. However, it may pay for medical services provided there, as well as services such as physical and occupational therapy, skilled nursing care, or medical social services. If you have a Medicare Advantage plan, you may have more coverage.

Medicaid is a federal and state-run program that helps people with low income afford medical care. While it can be used for long-term stays in Senior Living communities, home health care, and personal services, you generally must have already exhausted all other means to pay for this care. So Medicaid is generally the option of last resort.

Long-Term Care Insurance

Long-term care insurance is designed to help pay for ongoing care you may need in retirement. Such a policy could cover some or all of the costs of a home-health aide, and Assisted Living community, or other long-term care communities. However, while this kind of policy can be a good way to offset some of your costs, you probably shouldn’t rely on it as your primary funding source, because as you get older the premiums typically rise and/or the benefits may be reduced. Insurance companies may also make you jump through a number of hoops and require pre-approvals before you move to a senior living community.

Veterans’ Benefits

The Veterans Aid & Attendance benefits and Housebound allowance can be a great option to help pay for assisted living in retirement for people who served in the military and meet the program’s criteria. These payments can range from about $1,000 to over $2,000 per month depending on the circumstances.

Life Insurance

There are ways a senior’s life insurance policy, or one belonging to a family member, can be used to pay for Assisted Living or Memory Care. You can sell a policy to a third party for market value and use the proceeds to fund a long-term care benefit plan while retaining some death benefits. Another option is “surrendering” a life insurance policy to the life insurance company for cash value. In this case, you give up ownership and won’t receive any benefits upon death.

Real Estate

Many people who have substantial equity in a home, opt to sell or rent it and use the proceeds to pay for Assisted Living or Memory Care. Another option is a reverse mortgage. This is essentially a loan paid in regular monthly installments, that allows homeowners to leverage the equity in their home. It may be an attractive option for a couple where only one partner needs more specialized care, or if funds for care are needed immediately but a quick sale is not feasible for some reason. After the last owner moves out of the home, the loan needs to be repaid – often by selling the house. So this may not be a desirable approach if you want to keep your home in the family.

Keep reading the Brightwater Senior Living blog for lots more useful information about how older Americans can continue living well at every stage.