Assisted Living Cost Considerations

assisted-living-considerationsAssisted Living facilities have become a popular option for aging people who do not need the level of care offered in a nursing home, but need some assistance with activities of daily living and want to maintain some independence.

To make an informed choice among the many facilities available, you need information about staff qualifications, services, costs, potential increases in fees and the circumstances that could lead to an involuntary discharge from the facility.

The average monthly base rate varies in different parts of the country. In New York, the average cost of Assisted Living is $4,100 per month, but can range from $1,100 to $11,100 depending on the location and other factors. Residents often pay additional fees for special care units (ie. Alzheimer’s or Memory Care) and other services, such as medication administration and transportation. Two-thirds of assisted living residents private pay out-of-pocket, although Long-Term Care Insurance or Veteran’s Benefits may help pay some costs for those with coverage or who qualify.

In general, there are three rate structures to consider:

1. Flat Monthly Rate. This varies depending on the accommodations: semi-private or private rooms; suites with shared bathrooms; studios with or without kitchens; and one, two, or three bedroom apartments. The monthly rent usually includes daily meals, housekeeping, laundry and transportation services. Ask about the number of meals served, inclusion of snacks, size, location and view of the room. All of these can affect the rate.

2. Base Plus. Under this structure, you pay the flat monthly fee and choose other services, each adding to the bill. For example, the amount of care under the base rate could be 30 minutes a day and anything else, such as bathing, grooming, dressing and monitoring medications, will cost extra. This can add as much as $2,000 a month to the cost.

3. Tiered Rates. This structure blends the flat rate and à la carte menu into specific levels of care, with the costs increasing along with the assistance provided. A facility’s tiered structure might work like this:

Tier One
The base rate plus

Three meals daily, daily snacks, therapeutic diets, weekly housekeeping, occasional assistance with daily activities, social, cultural and educational programs, scheduled transportation, emergency-call system, health and wellness assessments, and medication reminders

Tier Two
Tier One Services plus

Regular assistance with daily activities, assistance with self-managed incontinence, supervision of medication, occasional reality orientation, and
occasional escort service to meals and activities

Tier Three
Tier One and Two Services plus

Frequent assistance with daily activities, assistance with manageable incontinence, daily housekeeping, medication administration, escort service to meals and activities, and frequent reality orientation

The tiered structure typically continues to a level five with additional fees as the care becomes more intensive.

The price you pay the first year is likely to increase over time, perhaps substantially, so look into the past decade of price changes at facilities you are interested in. That can give you an indication of future costs.

assisted-living2When calculating costs, keep in mind that many of the usual costs of living will no longer apply to the person moving into an assisted living facility, including:

  • Homeowner’s insurance
  • Possibly auto insurance
  • Property tax
  • Utility bills
  • Home maintenance costs
  • Meals

Even if assisted living costs wind up exceeding your projected cash flow, the facilities should not be automatically eliminated. Selling or renting out the primary home can often help to defray expenses. You can work with a financial advisor to look at asset allocation and may be able to generate additional income stream to pay for care. In addition, about one-fourth of all assisted living residents get some financing from other family members. Be cautious, however, at the language used in the admissions contract. Some facilities want the children to personally guarantee a loan that will pay for a parent’s assisted living cost if they are unable to.

Another option that can help pay for assisted living is Long-Term Care Insurance. However, these policies generally pay only for care, not living expenses. In some cases, long-term care insurance may not cover assisted living, so it is important to review any existing policy, particularly one covering home-health-care-only, nursing-home-only, and coverage issued before 1990. If assisted living is not included, ask the insurer if it can be added and for how much.

For Veterans and their surviving spouses, the Department of Veterans Affairs (VA) has a benefit called the Aid and Attendance and Housebound Improved Pension benefit, which can cover the costs of caregivers in the home or be used for assisted living or a nursing home. Contact the Herzog Law Firm to see if you qualify for VA care benefits.

Important consideration: On average, people stay in assisted living facilities less than two years. Often, they move on to a higher level of care. In fact, an assisted living facility may ask the resident to leave if they believe they cannot provide the level care required. Continuing Care Communities offer residents a continuum of care options based on their needs from independent housing to round-the-clock nursing services. These transitional housing options, however, can come with an increased cost.

assisted-livingWhen deciding about any type of retirement, senior living, assisted living or skilled nursing facilities, knowing the costs and options can lead to informed decisions. Someone who needs help for only an hour or two of daily assistance might be able and prefer to stay at home. But if more care is needed, paying for home care can be expensive, so assisted living may be the a better choice. Assisted living is also an attractive option for those that do not have family members that live close by or seek an environment with activities and social interaction.

If you are looking at different senior care options, please contact the Herzog Law Firm at 1-800-777-7581. Our experienced attorneys can help you navigate the (often) confusing long-term care system, look at asset protection strategies and potentially help you qualify for government benefits.

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