For many older adults, transitioning from home to assisted or supported living involves making tough decisions. More often than not, affordability is the most important consideration. When it comes to comparing costs between options—moving to a skilled nursing facility versus an independent living community, for example—understanding the various charges involved is critical to making informed decisions.
We’ve compiled a brief overview of the costs you can expect, and how they might affect your living expenses.
Most senior housing facilities charge a monthly fee that covers general living expenses, including rent, meals, housekeeping, utilities, and social activities. Residents can elect to pay more for additional amenities—such as personal laundry services, dry cleaning, and trips to the in-house hair salon. Some locations allow residents to buy meals for their visitors or pay extra for local transportation. The pay-as-you-go model allows residents to tailor their living arrangements to their needs, preferences, and budget.
A growing number of living communities offer the option of paying an entrance fee in exchange for lower monthly expenses. In essence, the entrance fee is a down payment on core services—such as rent and meals—that is amortized for a set period of time. As with monthly fee plans, supplementary amenities are available for additional costs.
Entrance fees are either refundable or nonrefundable. Refundable entrance fees are typically the higher option; however, if a resident moves or passes away during the amortization period, a portion of the entrance fee is refunded to the person’s estate on a declining basis.
The entrance fee structure is popular among living communities that provide increasing levels of care—now referred to as Life Plan Communities (formerly Continuing Care Retirement Communities)—as well as those offering villas or other upscale housing options. For anyone paying for senior living with the proceeds of a home sale, an upfront payment can be especially attractive.
Many senior communities provide onsite healthcare. Services range from assisted living options (i.e., bathing, dressing, mobility support) to skilled nursing (assessment and treatment, medication reminders, memory care, rehabilitation).
While health insurance and Medicare do not generally cover the costs of living in a senior community, insurance will usually cover incurred medical expenses such as physician care and prescriptions.
While not all facilities accept its payments, Medicaid is the largest payer of nursing home care in our country. Indeed, Medicaid pays over 40 percent of total nursing home costs in the United States. However, Medicaid often requires that senior living residents exhaust much of their personal resources before receiving assistance.
Aware that some residents could potentially outlive their financial assets, some senior living communities offer subsidy programs to help those who legitimately spend through their savings. Nonprofit living communities often establish assistance funds and raise money to ensure that residents are never asked to leave because they’ve run out of money.
If you have questions about senior living costs, please contact Sunset Communities for help.