Assisted Living

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Annualizing Costs of Assisted living, Residential Care, Adult Day Care or Other Similar Arrangements

 These facilities are not categorized by VA as nursing homes. As such, annualization of costs and a rating are not automatic. If the beneficiary is not rated, the service representative will only allow recurring unreimbursed medical expenses for specific medical care provided by licensed health professionals. Costs for room and board or custodial care cannot be applied.   On the other hand, if a beneficiary residing in one of these living arrangements has been rated a need for "aid and attendance" or "housebound", VA will allow all reasonable costs to be counted as prospective, annualized medical expenses as long as some of those costs are paid for medical care. The providers do not have to be licensed. In the case of Alzheimer's, the physician's statement used for rating must indicate the person needing care must be in a protective environment; otherwise, only medical costs are covered. Applying for a rating is discussed in a previous section above. All reasonable costs would include room and board as well as other unreimbursed billable services. The director of the facility must sign a statement verifying the type of care being given and the fact that the person receiving the care is expected to remain a resident in the facility. We have included in our book, a copy of a form entitled "Form 2 -- Care Provider Report (used to provide evidence of recurring medical expenses)" We highly recommend this form or a similar form be submitted with the application. A copy of the contract for services as well as invoices and statements from the facility should also be included with Form 2.There may be a possibility of a non-veteran spouse of a living veteran receiving annualized credit for recurring costs of non-nursing home facility care. Requesting annualization for the spouse may be a problem because the amount of allowable costs without a rating for "aid and attendance" or "housebound" could be much smaller or disallowed. We recommend checking the box on the application for a rating. This will probably confuse the service representative but may alert that person to the request of the spouse's expenses. We also recommend submitting a letter with the application requesting recurring, annualized treatment of the cost of the care facility and assuring VA the spouse does deserve a rating. Otherwise, the spouse’s cost of assisted living may not be allowed as a deduction.  

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