Paying for Senior Living in South Denver: Complete Guide to Your Payment Options

One of the first questions families ask me isn't about care levels or communities—it's "How are we going to pay for this?" And that question usually comes with stress, guilt, and a lot of half-answers from Google. I'm Curtis, founder of Harbor Senior Placement. I work with families across South Denver, and this blog is meant to give you a clear, honest financial map. I'm going to walk you through the four main payment options available to you, step-by-step, so you understand exactly how each one works.

Consider this your financial bearings before you move forward.

The Four Main Ways to Pay for Senior Living

Most families pay for senior living using a combination of:
 

1. Out-of-pocket costs (paying directly with income and savings)

2. Long-term care insurance (if you have a policy)

3. VA benefits (if your parent is a veteran)

4. Medicaid (if you meet strict financial requirements, often through a spend-down process)
    

There's no single "right" way—only what fits your family's situation. Many families use two or three of these together.

Let me break down each one.

Payment Option 1: Out-of-Pocket Costs (Private Pay)

This is the most common starting point.

What Does "Out-of-Pocket" Mean?

Out-of-pocket means you (or your parent) pay the senior living community directly from your own money. This includes:
 

• Monthly retirement income (Social Security, pensions)

• Savings and checking accounts

• Proceeds from selling a home

• Investment accounts or stocks

Real Numbers in South Denver

Here's what monthly base costs typically look like (as of 2025).

Important: These are starting rates (often room and board only). Most communities add "Levels of Care" fees on top of this, which can add $500 – $2,500+/month depending on how much help your parent needs (medication management, bathing, dressing, etc.).
 

• Independent Living (IL): $2,500 – $4,500/month (usually inclusive, minimal care options)

• Assisted Living (AL): $4,500 – $7,000/month + care fees

• Memory Care (MC): $5,500 – $8,500/month (often all-inclusive, but verify)

• Skilled Nursing (SNF): $7,000 – $12,000+/month (typically all-inclusive)

• Respite Care: $100 – $350/day (usually all-inclusive)
   

Always ask: "Is care included in this price, or is it separate?"
 

Important Reality Check: You're Not Paying "Forever"
 

Many families I work with think, "If I start paying out-of-pocket at $6,000/month, I have to pay that forever." That's not necessarily true. Out-of-pocket is often a strategic starting point while you explore other options like Medicaid or while you're saving time to plan.

When to Use Out-of-Pocket
 

• Your parent has savings or income to cover costs

• You're buying time while exploring Medicaid eligibility

• You need immediate placement and don't have time for Medicaid paperwork

• Your parent's care needs might change (and Medicaid has strict eligibility)
   

Community Fees vs. Entrance Fees

When your parent moves into a community, you'll likely pay a one-time upfront fee. Don't confuse these two:

Community Fee (Standard Rental): $2,500 – $5,000
 

• This is a one-time administrative fee

• It covers move-in processing and apartment refreshing

• Most AL and MC communities charge this

• It's generally non-refundable
   

Entrance Fee (Life Plan / CCRC): $100,000+
 

• This is a larger "buy-in" at luxury Continuing Care Retirement Communities

• You're purchasing lifetime care guarantees

• Some offer 50–90% refunds for your estate

• Less common in standard South Denver assisted living

• Think of it like buying into a community rather than renting
   

Know before you sign: Always ask the community, "Is this a community fee or an entrance fee?" and "Is it refundable?"

Payment Option 2: Long-Term Care Insurance (LTCI)

If your parent bought this years ago, it could be a game-changer.

What Is Long-Term Care Insurance?
 

Long-term care insurance is a policy your parent (ideally) bought when they were younger and healthier. It's designed to cover the costs of senior living and long-term care when needed.
 

How LTCI Works: The Basics
 

1. Your parent paid premiums (monthly or annually) for years, often starting in their 50s or 60s.

2. Now they're using the benefit. When they need care, the policy kicks in and helps pay for it.

3. The insurance company reimburses the senior living community directly, or reimburses your family after you pay.
    

The "Elimination Period" (Your Deductible)
 

This is the tricky part that confuses most families. LTCI policies have an elimination period—think of it like a deductible on car insurance.

What is it? The elimination period is the number of days your parent must receive care before the insurance company starts paying. During this time, you pay out-of-pocket.
 

Common elimination periods:
 

• 0 days (policy pays immediately) — expensive premiums

• 30 days (most common)

• 60 days

• 90 days (very common — balances cost and coverage)

• 180 days (cheapest premiums, but you pay longer)
   

Example: If your parent's policy has a 90-day elimination period at an AL community costing $5,500/month:
 

• Months 1-3: You pay $16,500 out-of-pocket ($5,500 × 3)

• Month 4 onward: Insurance covers the daily benefit amount
   

What Does LTCI Cover?
 

Most policies cover:
 

• Assisted Living — room, meals, personal care

• Memory Care — specialized care for dementia/Alzheimer's

• Skilled Nursing Facilities — post-hospital rehab or long-term nursing

• In-home care — home health aides, nurses at home

• Adult day care — daytime programs with supervision

• Respite care — short-term breaks for family caregivers
   

Daily Benefit Amount
 

LTCI policies state a daily benefit amount—for example, $150/day or $300/day.
 

• If your AL costs $6,000/month ($200/day), and the policy pays $150/day, the insurance covers $150 and you pay $50/day out-of-pocket.

• If the policy pays $300/day at a $150/day respite care, the insurance likely covers the full cost.
   

LTCI Inflation Protection
 

Some policies include inflation protection, which increases the daily benefit over time. Example: A policy with 3% annual inflation protection that starts at $150/day will increase each year, helping keep pace with rising care costs.
 

Important: Check your parent's policy document for:
 

• Daily benefit amount

• Elimination period length

• Benefit duration (2 years? 5 years? Lifetime?)

• Does it include inflation protection?

• Which states does it cover? (Colorado should be included)
   

The Colorado Long-Term Care Partnership Program
 

If your parent has a Partnership policy, they get special Medicaid protection.
 

Here's how it works:
 

• Every dollar the insurance pays out = $1 of assets protected from Medicaid spend-down

• Example: If the policy pays $200,000, your parent can protect $200,000 of assets when applying for Medicaid later

• They can qualify for Medicaid sooner without spending down to poverty levels
   

This is powerful—it means LTCI bridges the gap between private pay and Medicaid.
 

Payment Option 3: VA Aid and Attendance (Veterans Benefit)

This is one of the most underused benefits I see.
 

Who Qualifies?
 

Your parent qualifies if they are:
 

• A military veteran, OR

• A surviving spouse of a veteran, OR

• A surviving child of a veteran (in rare cases)
   

Service Requirements
 

Your parent does not need combat experience, but they do need:
 

Active Duty Service:
 

• 90+ consecutive days of active duty (most common), OR

• 24+ months of active duty if they enlisted after September 7, 1980
   

Wartime Service:
 

• At least 1 day during an eligible wartime period:

  • World War II (Dec. 7, 1941 – Sept. 2, 1945)

  • Korean War (June 27, 1950 – Jan. 31, 1955)

  • Vietnam War (Aug. 5, 1964 – May 7, 1975)

  • Gulf War (Aug. 2, 1990 – present)
     

Discharge: Must be honorable or general (under honorable conditions)
 

Financial Requirements
 

VA also checks finances:
 

• Net worth limit: approximately $159,000 for 2025 (excluding primary home and one vehicle)

• No income limit, but higher income reduces the benefit
   

Care Need Requirement
 

Your parent must need help with activities of daily living (ADLs) such as:
 

• Bathing or showering

• Dressing

• Using the toilet

• Eating

• Transferring (moving from bed to chair)

• Continence (bladder/bowel control)
   

What VA Aid and Attendance Covers
 

If your parent qualifies, the VA can help pay for:
 

• Assisted Living — board, room, personal care

• Memory Care — specialized dementia care

• Some in-home care — home health aides, companions

• Respite care — short-term stays to give caregivers a break

• Nursing home — in some cases
   

2025 Monthly Benefit Amounts
 

These increase annually (adjusted for inflation):

Veteran alone: approximately $1,200 – $1,500/month
Veteran with spouse: approximately $1,600 – $2,000/month
Surviving spouse: approximately $800 – $1,000/month

These amounts vary based on income and assets, so your parent may receive less.
 

How It Works in Practice
 

Example: Your father is a Vietnam-era vet living in AL costing $6,000/month.
 

• VA Aid & Attendance benefit: $1,400/month

• Your family pays: $4,600/month out-of-pocket
   

The VA payment helps bridge the gap but usually doesn't cover the full cost.
 

How to Apply
 

Contact your local VA Regional Office or work with a VA-accredited representative (many senior placement agencies like Harbor can help point you in the right direction). The application process takes 4-6 months (though some cases resolve faster). Benefits are retroactive to your application date, so you'll receive a lump-sum payment covering the waiting period.
 

Payment Option 4: Medicaid (Health First Colorado) and the Spend-Down Process
 

This is the most complex option—and the most misunderstood.
 

What Is Medicaid in Colorado?
 

In Colorado, Medicaid is called Health First Colorado. It's a state and federal program that pays for healthcare and long-term care for low-income individuals and families.
 

For senior living, there are different Medicaid programs:
 

• Nursing Home Medicaid (SNF coverage) — an entitlement with no wait list

• EBD Waiver (assists with assisted living, in-home care) — may have wait lists depending on state enrollment caps

• HCBS Waivers (home and community-based services)
   

The Strict Financial Limits (2025)
 

Here's the hard truth: Medicaid has very strict asset and income limits.
 

For a Single Person:
 

• Asset Limit: $2,000 in countable assets

• Income Limit: $2,901/month
   

For a Married Couple (only one spouse applying):
 

• Applicant's Asset Limit: $2,000

• Non-applicant Spouse's Asset Limit: $157,920 (protected by law)

• Applicant's Income Limit: $2,901/month
   

What counts as an "asset"?
 

• Bank accounts (savings, checking)

• Stocks, bonds, investments

• IRAs and 401Ks (yes, retirement accounts count)

• Rental property or second homes

• Vehicles (if more than one)
   

What does NOT count?
 

• Primary home (the one they live in)

• One personal vehicle

• Household furniture and personal items

• Prepaid burial plans

• Engagement and wedding rings
   

The Reality: Most People Don't Qualify Initially
 

If your parent has $300,000 in savings, they do not qualify for Medicaid at first. They need to reduce their assets to $2,000. This is where the spend-down comes in.
 

The Spend-Down Process Explained
 

Spend-down means using your parent's excess assets to pay for care expenses until they reach Medicaid's $2,000 limit. This is perfectly legal and expected.
 

Allowed Spend-Down Expenses (No Penalties)
 

These do NOT trigger penalties under Medicaid's rules:
 

• Assisted Living costs — room, board, care (the primary spend-down)

• Home improvements — new roof, plumbing repairs, kitchen remodel

• Home modifications — wheelchair ramps, roll-in showers, stair lifts

• Skilled Nursing — temporarily paying for SNF before Medicaid

• Vehicle modifications — wheelchair lift, adaptive controls

• Debt repayment — paying off mortgage, credit cards, medical bills

• Funeral and burial prepayment — locks in current prices

• Medical expenses — therapies, equipment, medications
   

Example Spend-Down Scenario
 

Your mother has:
 

• $250,000 in savings

• $2,000/month Social Security

• Needs assisted living at $5,500/month
   

Here's how spend-down works:
 

1. Months 1-45: She pays $5,500/month out-of-pocket

   • Total spent: $247,500 ($5,500 × 45 months)

   • Assets remaining: ~$2,500

2. Month 46: Assets drop to $2,000 (Medicaid limit reached)

3. Month 47 onward: She qualifies for Medicaid

4. What Medicaid covers: Care services (staffing, supervision, activities)

5. What she still pays: "Room and Board" — approximately $810/month (based on 2026 Colorado Medicaid rates, usually from her Social Security)
    

This spend-down takes nearly 4 years, but it protects her from years 5–10 of AL costs.
 

The 60-Month Look-Back Period (CRITICAL)
 

What is it? Medicaid looks back at all your parent's financial transactions from the past 60 months (5 years) before applying. If you moved money around improperly during that time, Medicaid can penalize your parent by delaying their eligibility.

Example of a PROBLEM transfer:
 

• Your mother gives $50,000 to her son (your uncle) as a "gift"

• 2 years later, she applies for Medicaid

• Medicaid says, "You gave away $50,000 in the look-back period"

• Penalty: Your mother becomes ineligible for Medicaid for a certain number of months (penalty calculated by dividing the gift by average care costs in Colorado)
   

Example of an ALLOWED transfer:
 

• Your mother pays $5,500/month to the AL community

• This is allowed—it's a direct care expense

• No penalty
   

Key Rule: All money must be spent on allowed expenses (care, home improvements, debt, funeral prep) or transferred at fair market value (if selling property or assets).
 

Medicaid and Assisted Living: Room and Board Caps
 

Here's the good news about Medicaid in AL: If your parent is in a Medicaid-accepted assisted living community, the state caps the Room and Board (rent) charge.

This means:
 

• Private-pay AL might cost $6,000/month

• Medicaid-accepted AL caps rent at approximately $810/month (based on 2026 Colorado Medicaid rates)

• Medicaid pays for care services

• Your parent pays the capped rent (usually from Social Security)
   

So the spend-down period gets you to the Medicaid asset limit, and then Medicaid takes over paying for services. Your parent's out-of-pocket costs drop dramatically.
 

Medicaid and Skilled Nursing Facilities (SNF)
 

SNF coverage is different:

How it works:
 

• Medicaid covers SNF room, board, AND care

• Your parent pays a "patient payment" from their monthly income (usually ~$50 – $100)

• Medicaid pays the rest
   

Important: Not all SNFs accept Medicaid. Many require 6–12 months of private pay before converting. Ask upfront.
 

Private Pay Period Before Medicaid
 

Many communities—especially good ones—require a private pay period before they accept Medicaid.

Why? Medicaid reimburses facilities at lower rates, so communities want to ensure they get higher rates initially.
 

Common requirements:
 

• 12 months private pay before Medicaid conversion

• 24 months private pay

• 36 months private pay (less common)
   

This means your parent might spend-down faster if they're at a community that requires this transition.
 

The "Spend-Down Strategy"
 

Smart families work with an elder law attorney or senior placement professional to strategize the spend-down:
 

1. Calculate total assets and care costs

2. Determine how long private-pay will last before Medicaid kicks in

3. Make allowed spend-down expenses (home repairs, debt payoff, burial prep)

4. Choose a Medicaid-accepted community with clear conversion policies

5. Apply for Medicaid at the right time
    

Medicare vs. Medicaid: Don't Confuse Them

Many families mix these up. Here's the difference:

Medicare:
 

• Federal health insurance for people 65+

• You paid into it through payroll taxes

• Covers hospital, doctor visits, some rehabilitation

• For senior living: Covers only SHORT-TERM skilled nursing (see below)

• Does NOT cover assisted living or long-term care
   

Medicaid (Health First Colorado):
 

• State and federal program for low-income people

• Income and asset-based

• Covers long-term care in AL, MC, SNF, in-home care

• No age requirement (but mostly used by seniors)
   

Medicare and Skilled Nursing (The 3-Day Rule)
 

Medicare DOES help pay for short-term skilled nursing, but only if:
 

1. Your parent was hospitalized for 3+ consecutive days first (not counting discharge day)

   • Emergency room time doesn't count

   • Observation doesn't count

   • Must be admitted as an inpatient

2. They are admitted to SNF within 30 days of hospital discharge

3. Coverage:

   • Days 1–20: Medicare covers everything (after Part A deductible of $1,676)

   • Days 21–100: Medicare covers it, but patient pays $209.50/day (2025)

   • After Day 100: Patient pays everything

Example: Your father has a fall, breaks his hip, gets surgery, stays in hospital 4 days. He's discharged to SNF for rehab.

• Medicare Part A covers his SNF stay

• He's responsible for copays starting day 21

• If he's there 60 days total, he pays $209.50/day × 40 days = $8,380 out-of-pocket

• After day 100, Medicare stops—he must have other coverage (private pay, Medicaid, or LTCI)
   

This is why many SNF stays transition to Medicaid after 100 days.
 

Combining Multiple Payment Options
 

Most families use two or more options together:
 

Example 1: Out-of-Pocket + Medicaid Spend-Down
 

• Parents pay $5,000/month out-of-pocket from savings for 4 years (spend-down)

• Then Medicaid takes over, reducing out-of-pocket to ~$900/month
   

Example 2: LTCI + Medicaid
 

• Insurance covers elimination period

• After benefit period ends, Medicaid takes over

• Assets protected under Partnership policy
   

Example 3: VA + Out-of-Pocket
 

• VA pays $1,400/month

• Family pays remaining $3,500/month out-of-pocket from income
   

Example 4: Medicare (SNF) + Medicaid
 

• Medicare covers SNF days 1–20 for free

• Pays with copay days 21–100

• Medicaid takes over day 101+
   

Why Not Every Community Accepts Every Payment Option
 

This is critical: Not every community accepts Medicaid, VA, or takes Medicare.
 

• Many are private pay only

• Some accept only VA or Medicaid, not both

• Some have private-pay-only floors (nicer units)

• Premium communities may not accept Medicaid at all
   

Always ask a community upfront:
 

• Do you accept Medicaid?

• Do you accept VA benefits?

• Do you accept Medicare for SNF stays?

• How long before you convert a private-pay resident to Medicaid?

• Do you have LTCI agreements?
   

A Realistic Timeline
 

Most families experience this progression:
 

Year 1: Private pay (out-of-pocket) at a non-Medicaid or pre-Medicaid community

Year 2–3: Continue private pay while spend-down occurs; evaluate Medicaid timing

Year 4: Assets reach Medicaid limit; convert to Medicaid-accepted community

Year 5+: Medicaid covers most costs; family pays minimal out-of-pocket
 

This is not failure—this is strategy. The goal is to maximize quality care while protecting assets and preparing for long-term sustainability.
 

The Bottom Line: Your Financial Map
 

You don't need to have everything figured out today. You just need a clear starting point and honest answers to these questions:
 

1. Do we have savings to pay out-of-pocket? (How long will they last?)

2. Does my parent have LTCI? (Check their policy immediately)

3. Is my parent a veteran? (Explore VA benefits)

4. Are we open to a Medicaid spend-down strategy? (This often makes the most financial sense long-term)
    

If you're trying to understand which option fits—or how to combine them—that's where I come in. Stop searching alone. Call or text Curtis at Harbor Senior Placement: 303-718-3011. Free, local guidance. We'll talk through your situation, calculate your timeline, and build a plan that makes sense for your family. Let's take this one steady step at a time.