When aging in place is not feasible for your client or one of their loved ones, various living alternatives can offer them different levels of care based on their individual needs. The problem is the choices can be overwhelming and generally families consider long-term care residences only after a significant medical event occurs. This leads to a rush in decision-making. To help reduce clients’ stress, I recommend maintaining a readily available resource list to assist in this process. As the old adage goes, “Stay ready so you don’t have to get ready.”
Generally, nursing homes and nursing facilities deliver the highest level of care, providing round-the-clock supervision for individuals facing serious health issues. Assisted living residences and continuing care retirement communities offer some medical services and are particularly suitable for seniors who maintain a degree of activity and independence.
In the second part of my long-term care series, I present a brief overview of these diverse options and when they might be appropriate— insights I gained from my experience with my father and clients assisting their parents. In addition, I’ve included recommendations for creating a resource list of residences and facilities to guide informed decisions about long-term care.
Assisted Living Residences
Assisted living is a good choice when:
- Aging in place isn’t feasible due to property conditions, location, or costs.
- Assistance with daily living activities is needed.
- Communal living and interaction are desired.
- Cognitive issues such as dementia or Alzheimer’s require specialized care.
Ways to cover costs include:
- Personal savings
- Medicaid (state-run programs)
- Long-term care insurance
- Hybrid life insurance (These insurance products with a long-term care rider are not available in all states.)
Assisted living residences and facilities cater to individuals seeking a semi-independent lifestyle with the added convenience of non-medical support for daily activities. According to Genworth’s Cost of Care Survey, the monthly cost for a one-bedroom apartment nationally averages $4,500, but this amount can vary significantly based on location. In New York, for instance, the monthly rate is $5,750, while in Alabama, it is $2,150. This comprehensive cost covers rent, meals, snacks, housekeeping services, activities, transportation to medical appointments, and care coordination by a case manager. It’s worth noting that there may be extra charges for specialized services like home health assistance for activities of daily living, medication management, laundry, grooming, and more.
The American Health Care Association reports that the median duration of stay in an assisted living residence is 22 months. Therefore, it is crucial to thoroughly understand the cost structure when deciding on the right option. Typically, three payment options are available: a la carte, where services may be added or removed as needed; all-inclusive, which provides all services and amenities; and tiered, offering various pricing levels based on the extent of services.
Some states, such as Indiana and New Jersey, offer a Medicaid waiver for assisted living residences. This allows the program to be utilized alongside the low-income housing tax credit program (LIHTC). By combining these two programs, individuals with incomes at or below 60% of the area median income can qualify for reduced rent, with the state reimbursing the residence for the cost of care.
Nursing homes are suitable when:
- 24/7 care is required, including medical services.
- Cognitive issues like dementia or Alzheimer’s require specialized care.
- Communal living is preferred.
Ways to cover costs include:
- Personal savings.
- Medicaid (state-run programs).
- Long-term care insurance.
- Hybrid life insurance (insurance products with a long-term care rider, which are not available in all states).
Nursing homes provide the most comprehensive living arrangement for individuals who require extensive care, including medical-related services delivered by licensed staff. Not surprisingly, this option is more expensive than assisted living residences. According to the latest data from Genworth, the national monthly cost for a semi-private room is $7,908 and $9,034 for a private room. This amounts to an annual cost of approximately $95,000 for a shared room.
Continuing Care Retirement Communities (CCRCs)
Also known as life plan communities, CCRCs are an excellent choice when families are seeking a range of potential living/care arrangements that they or their loved ones may require as their needs change. Residents may start out in an independent-living apartment or cottage and then later need to move to the assisted living and/or nursing-care sections of the community. Ways to cover costs include personal savings, Medicare (hospitalization and doctor’s visits) and Medicaid.
Most CCRCs have a minimum age requirement of 55, although some may require residents to be 62 or older. Some communities have additional prerequisites, such as enrollment in Medicare Part A and Part B and the maintenance of a Medicare supplemental insurance policy).
One of the key advantages of CCRCs is the convenience of having access to medical staff, including doctors, skilled nurses, prescription drugs, and on-site rehabilitation services. Essentially, everything you need is available within the CCRC itself.
Costs and contracts
CCRC residents must pay both an upfront and ongoing monthly fee. The total cost primarily depends on the type of contract. CCRCs are generally more suitable for individuals with substantial assets. CCRCs offer three different types of contracts:
- Life contract. This option, the most expensive, offers unlimited medical services. According to an article on Care.com, upfront fees for life contracts typically range from $160,000 to $600,000; some communities require $1 million or more in upfront fees. The monthly fees for CCRCs typically falls between $2,500 and $5,000.
- Modified contract. This middle option includes limited medical services with a cap; anything beyond that is charged per diem. Upfront fees for this option generally start at around $80,000 and can go up to $750,000. The monthly fee typically ranges from $1,500 to $2,500.
- Pay-as-you-go contract. Although it’s the least expensive type of contract, upfront fees still range from $100,000 to $500,000. This option charges market rates for all medical services, assisted living and nursing home care. As a result, out-of-pocket expenses can become costly, especially if occupants require extended periods of skilled nursing care.
When researching CCRCs, it’s crucial to understand the demographics of current residents, especially if diversity is a vital consideration. It’s also imperative to assess the financial stability of the sponsor or owner when choosing a community. More CCRCs declared bankruptcy in recent years as the COVID-19 pandemic brought higher operational costs and decreased occupancy rates. While CCCRC contracts often include refund provisions, disputes can arise during bankruptcy legal proceedings, potentially delaying repayment.
Proactively researching long-term-care facilities and leveraging network resources can lead to well-informed decisions. Here are some suggestions you can give to your clients, or that you may want to follow yourself.
Leverage network resources
Consult friends, family, church members, local aging councils, caregiving, and social media groups for recommendations on assisted living, nursing homes, and CCRCs in your community. If your loved one is admitted to a hospital, use the social worker or family member services team as a source of information.
Consult government ratings
Utilize the Centers for Medicare & Medicaid Services Five-Star Quality Rating System to compare nursing homes, rehabilitation facilities, and home healthcare services. This system offers insights into health inspections, staffing, overall ratings, COVID-19 vaccination rates, fire safety inspections, penalties, and certified bed count. It proved invaluable in my search for short-term rehab facilities for my father after his massive stroke.
Make a personal evaluations
Visit residences to inspect the facilities, understand the enrollment process, and evaluate staff interactions with residents.
Consider social compatibility by observing residents, reviewing events calendars for weekly activities, and examining food menus. Social dynamics and food preferences significantly impact acclimation to a new living arrangement, so don’t underestimate their importance.
When aging in place is no longer an option, families still have many options left. You can make a big difference for your clients.
Desiree Fisher, CFPâ, is the owner and founder of Coell’s Legacy, a concierge firm created to assist families before something unexpected happens. We are here to remove the anxiety and confusion from the estate and eldercare planning process. Contact me at our website, www.coellslegacy.com, or on LinkedIn.