The cost of senior care continues to rise each year, but many senior living costs can be significantly lessened if you do your homework ahead of time.
As baby boomers reach retirement age and start needing long-term care, both costs and demand for various kinds of senior living are expected to go up. The average monthly cost in 2014 for assisted living was $3,562, according to A Place for Mom’s Senior Living Price Index. The good news is, many unnecessary expenditures can be mitigated with proper planning and research into a senior living search.
By taking enough time to find the right place for your aging loved one’s specific care needs, you can avoid overpaying for senior living.
Though Medicare and Medicaid cover the largest proportion of senior care expenses, the amount of Americans who pay out of pocket for senior living is still staggering.
In 2011, families paid a total of $36 billion on institutional care, including nursing facilities, and another $3 billion on community-based care, including adult day care, home care, and other facilities, reports the Congressional Budget Office. According to the MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs, nursing care cost over $90,000 annually; assisted living cost over $42,000, and home health aide services cost about $21,000.
The numbers are daunting, but don’t let them scare you away. An accurate calculation of the cost of senior care will include supplements like Medicare, Medicaid and VA benefits. Moreover, there are a number of ways caregivers can cut senior care costs, from medical-expense tax deductions to pricing incentives.
Whether it’s someone you know who has looked for senior care before, or a professional senior advisor like those here at A Place for Mom, getting advice from someone with recent experience in looking for senior living can be invaluable, especially if they’re familiar with the various options in your area and can explain them to you. A financial advisor can also be a great help in planning ahead for the cost of senior care. “The planning process starts way back. I talk to all my clients about the prospect of assisted living care in the future, once they turn 50,” says Terry Swehla, CFP (Certified Financial Planner), CLTC (Certified in Long-Term Care), Managing Director at United Capital Private Wealth Counseling in Modesto, California.
“Understand the proper level of care your loved one needs,” says Rick Westermann, National Account Manager APFM and former National Sales & Marketing Manager at Leisure Care. Instead of assisted living, “It might be less expensive to live in an independent retirement community and hire a home health aide to help with day-to-day needs.” If a senior is seeking assisted living, he recommends getting an assessment done by the nurse of each community you’re looking at, because they will put together a specific price plan for the level of care you need.
Compare costs from different communities and what is included in the monthly price for each one. “The amenities are different with each one, so understand what you get for that monthly rate,” Rick says. Some may include amenities like meals, weekly housekeeping, and laundry services while other facilities charge extra for services like these. Be sure to ask about the base rate and what it includes, and what the costs are for different levels of service.
Also, ask about the cost of different sizes of apartments if they are available. “Think about the size of apartment you really need,” Rick suggests. “You might not need a 2-bedroom apartment. If you can downsize to a 1-bedroom or studio apartment the savings will be significant on a month-to-month basis.” Rick encourages prospective residents to use the many common areas available in the community instead of paying extra for a larger apartment.
Many communities charge a deposit, an entrance fee, or a community fee. This is a one-time fee that varies according to the market and is usually non-refundable. Make sure you read the small print and understand what these fees are and whether or not they are refundable.
“You should always ask if there are incentives or specials,” says Rick Westermann. “There are different incentives that marketing directors offer, and a lot of them aren’t advertised.” For instance, they may waive the entrance fee or community fee, offer a month’s rent for free, or pay for moving or downsize costs. Also, some assisted living communities have a limited number of Medicaid apartments available for those residents who outlast their funds or who have limited financial resources to begin with. “Go talk to people and find out what it does take to qualify for Medicaid, or in California, MediCal. Find out what those limits are, because it’s going to help you understand what you need to do,” advises Terry Swehla.
Don’t wait until you’re desperate and have limited options. Compare facilities, and get on waiting lists if they are available. Read online reviews and talk to as many people as possible. Another great option: “Try it before you buy it — ask to do a trial stay in a community,” Rick recommends. “Talk to residents and staff during the visit to see what they’re like. You can learn a lot about the community that way.”
Are there any tips that we’ve missed? Share them with us in the comments below.
Our advisors help 300,000 families each year find the right senior care for their loved ones.