Cost is a major factor that people consider when selecting an independent living community, assisted living community, memory care facility or nursing home. The initial quotes these facilities provide are often staggering, but consumers must be prepared to pay even more for room, board and care over the years.

“Another factor that must be considered when counting the cost of senior care is the potential for rate increases,” explains Rita Southern, director of assisted living and resident support services at Shell Point Retirement Community in Fort Myers, Florida.

If the prospect of rate increases is not factored into a senior living decision, it will produce an inaccurate estimate of what an elder can afford to spend on long-term care and for how long. This jeopardizes a resident’s ability to remain in one place over the long term, which can be very disruptive.

The Average Cost of Long-Term Care

Americans can expect to pay dearly for senior living. The 2019 Cost of Care Survey conducted by Genworth Financial collected pricing information from more than 15,000 senior care providers nationwide and reported the following results on long-term care costs:

National Median Assisted Living Facility Cost (one bedroom)

  • $4,051 per month
  • 2.9 percent annual increase since 2014

National Median Nursing Home Cost (semi-private room)

  • $7,513 per month
  • 3.1 percent annual increase since 2014

National Median Nursing Home Cost (private room)

  • $8,517 per month
  • 3.13 percent annual increase since 2014

While the average monthly costs may be astonishing enough on their own, it’s important to understand that these are not static numbers for several reasons. On an individual level, LongTermCare.gov estimates that a person turning 65 today has an almost 70 percent chance of needing some sort of long-term care services and supports in their remaining years. When you look at the bigger picture, the baby boomer generation is aging at an unprecedented rate. The U.S. Census Bureau projects that the number of Americans ages 65 and older will nearly double from 52 million in 2018 to 95 million by 2060. It comes as no surprise, then, that the demand for senior living is increasing and will continue to do so for the foreseeable future.

In addition to the influence that rising demand is having on long-term care prices, changes in Medicare and Medicaid coverage and reimbursement as well as increases in operational costs can cause some facilities to hike their rates.

Sometimes senior living communities are afraid to paint the real picture of costs because they want to attract new residents and discourage current residents from moving out, says Kelly Mazza, executive director specialist at LCB Senior Living.

Communities should deliver the honest truth about how much living there costs. If someone can’t afford it, they’re making a mistake by moving in. A senior will eventually have to make the difficult decision between paying more down the line or moving out. “The reality is rates are going up,” Mazza admits.


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Types of Senior Living Rate Increases

While rates are steadily rising across the country, there are two distinct types of increases for seniors who are already residing in long-term care facilities:

  • Rate Increases for All Residents
    If an assisted living facility raises its rates for reasons like those explained above (not just related to a senior’s individual needs), 60 days’ written notice is required with a detailed description of the costs. That will allow residents and their families time to determine if they can afford the increase or need to find different living accommodations.
  • Rate Increases Due to Growing Care Needs
    As a senior resident develops more issues related to dementia and/or other age-related chronic conditions, they present a greater risk and require a higher level of care and supervision. These changes are inevitable for most elders in long-term care and contribute to a rise in individual rates. For instance, many seniors and their families are surprised when they receive charges for more than two showers a week or for having food trays brought to their rooms when they are sick. It is also common for facilities to charge higher rates for specialized dementia care. These and other services are usually provided à la carte in addition to the base fee for basic care, room and board. Increased charges are often determined following a needs assessment conducted by the facility. A comprehensive needs assessment is performed upon admission to a facility. Follow-up assessments are typically conducted every few months throughout a senior’s stay and when needed following a change in health status or abilities.

How to Avoid Surprise Rate Increases

Before signing a senior housing contract, make sure you understand how the facility bills for all services and which of these involve additional costs. All current rates and policies for assessing rate increases must be stated in the admission agreement as well.

It also helps to get a sense of how often and how much the community has raised rates in the past. It’s best to do your homework before moving in to avoid unpleasant surprises. While it’s impossible to guarantee what rates will look like in a few years, asking about a facility’s historic pricing information will help you better anticipate future changes.

How to Handle Senior Housing Rate Increases

Inevitably, a loved one’s assisted living or nursing home bill will increase for any number of reasons. Most families are understandably frustrated when they receive these notifications. While the options are limited, there are a few things that can be done to address the added costs.

  1. Talk to staff members.
    Set up a meeting with the case manager, executive director, community relations director and/or accounting director to discuss your loved one’s financial picture. Research costs at comparable facilities in the area to see if the new rates are on par with the others. A respectful and well-crafted argument may result in a smaller increase or a new payment plan to help ease the burden.
  2. Seek outside help.
    Social workers and other administrative staff can also identify sources of financial assistance Southern says. These might include VA pension programs or Medicaid programs. The local Area Agency on Aging can provide referrals to these and other supportive programs that may help offset costs. Southern adds that well-meaning family members often step in to help fund a senior’s care, but this should be avoided if at all possible. Otherwise, the family may wind up responsible for paying all a senior’s long-term care costs.
  3. Negotiate with the administrators.
    There is no way around providing the level of care a senior requires. However, there are extras that can be dropped from their monthly budget to offset a rate increase. For example, a cost-saving decision could be to downsize from a two-bedroom senior living apartment to a studio. Another option is to convince administrators to throw in a perk to make the rate increase worthwhile. For example, a facility with a high vacancy rate may provide the option to move into a more expensive room for the same price or add on extra amenities or services.

Being prepared financially for elder care costs (including rate increases) will help prevent any unwelcome surprises. A realistic approach to these expenses and funding options could allow a senior to remain in their chosen senior living community for a longer period of time while they receive the care they need.

Sources: Genworth Cost of Care Survey 2019: Summary and Methodology (https://pro.genworth.com/riiproweb/productinfo/pdf/131168.pdf); Long-Term Care Information: How Much Care Will You Need? (https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html); Fact Sheet: Aging in the United States (https://www.prb.org/aging-unitedstates-fact-sheet/#footnote-1)