The cost of senior living is a major expense that people consider when selecting a senior living community, assisted living facility or nursing home. But you also need to be prepared to pay more in the future, which could impact a senior's ability to remain in their residence.
"Another factor that must be considered when counting the cost of senior care is the potential for rate increases," says Rita Southern, director of assisted living and resident support services at Shell Point Retirement Community in Fort Myers, Florida.
Americans can expect to pay dearly for a nursing home, according to the 2016 Cost of Care Survey (covering nearly 43,000 long-term care providers nationwide) by Massachusetts-based Genworth Financial. The data shows these rates for different residences/facilities:
Assisted living facility (one-bedroom)
- National median monthly rate: $3,628
- Up 2 percent over the past five years
Nursing home (semi-private room)
- National median monthly rate: $6,844
- Up 3 percent over the past five years
Nursing home (private room)
- National median monthly rate: $7,698
- Up 4 percent over the past five years
Changes in Medicare/Medicaid and increases in operational costs cause some facilities to hike their rates. As senior residents encounter more health care issues related to Alzheimer's, dementia and chronic diseases, they present a greater risk, contributing to a rise in rates. Sometimes rate increases are on a case-by-case basis because an aging resident needs more services and is charged additional fees not covered by the base price.
Sometimes assisted living facilities are afraid to paint the real picture of costs because they don't want residents to move out, says Kelly Mazza, senior executive director of The Arbors at Shelburne, a memory care community in Shelburne, Vermont.
Communities should deliver the honest truth about how much they cost and the services they provide, because if someone can't afford it, they're making a mistake by moving in and potentially having to pay more in the future or move out. "The reality is rates are going up," Mazza says.
Rate increases for all residents
If an assisted living facility raises its rates (not just related to your individual needs), 60 days' written notice is required with a description of the costs. That will give you time to determine if your senior can afford the increase or needs to find different living accommodations.
Rates due to increased care needs
A decline in health can mean the resident needs more care, which in return can result in rate increases. For instance, many residents are surprised when they receive charges for more than two showers a week or for having food trays brought to their room when they are sick. It is also common for facilities to charge higher rates for specialized dementia care or hospice care.
Increased charges are often triggered by an assessment of the resident's needs conducted by the facility. Many communities use a "level of care point system." Check carefully the type and frequency of services offered for the fixed rate and how the point system works.
Avoid surprising rate increases
All rates and systems for assessing rate increases based on care needs must be stated in the Admission Agreement for all services and for increases in services or levels of care. Make sure you understand how the facility bills for additional services that require additional costs.
It also helps to get a sense of how often the community has raised rates in the past. Do your homework before your parent moves in to a senior community. That way, there aren't any surprises down the road. You don't want to be unpleasantly surprised by sharp rate increases. While you can't completely predict the future, try to get a sense of how rates have risen in the past.
Steps to take when your rates go up
1. Talk to the staff
Set up a meeting with case managers or staff members such as the executive director, community relations director or accounting director to discuss the residents' financial picture. If you know local costs, you will know if the rates are on par with others. There may be a way for the fee to be reduced or for a new payment plan to ease the burden.
2. Seek outside help
Staff members also can identify financial assistance programs, Southern says, such as Veterans Administration Aid and Attendance or Medicaid programs such as the Medicaid ALF Waiver, or Long Term Care Diversion, Medically Needy or Social Security Extra Help programs.
State agencies on aging also can provide information about grants and financial assistance programs. Funding also may be available, if the housing is government subsidized or fits low-income qualifications.
Southern adds that in many cases, when an individual runs low on funds, family members will step in to offset the financial shortfall.
A cost-saving decision could be to downsize from a two-bedroom apartment to a studio apartment. Or to make the rate increase worth it, a facility with a high vacancy rate may provide the option to move into a more expensive room for the same price, or may add extra amenities.
Being prepared for rate increases and taking these steps to ease the financial burden could allow a senior to remain in their home for a longer period of time and receive the care they need.