For many people, aging means you might need a little extra help with everyday tasks. Typically, the human body slows down and gets creaky, and health issues often crop up in the latter half of life. Eventually, some people may need ongoing assistance, and that’s where assisted living communities come in.
An assisted living residence, assisted living community or assisted living facility is a housing space for people with disabilities, or for older adults who cannot, or chose not, to live independently.
“Assisted living facilities house self-sufficient clients, almost like a hotel with room service,” explains Joanna Fuller-Crawford, CEO of Perfect Care Nursing, an in-home care provider offering skilled and unskilled support in and around metro Atlanta.
This long-term care option can be a huge benefit to seniors who need some help with activities of daily living but who don’t need as much medical care as you’d find in a nursing home.
These activities include:
— Personal hygiene, such as bathing, grooming and dressing.
— Moving and getting around.
— Shopping and meal prep.
— Life and household management.
Facilities may also offer graduated services as a senior’s needs change, Fuller-Crawford says. “Some assisted living facilities offer different levels of care as clients progress, such as memory care units or hospice.”
While the options can vary greatly from facility to facility, across the board, assisted living is pricey, and it’s not covered by Medicare. Monthly charges average a little over $3,600, according to the U.S. Department of Health and Human Services.
Some industry watchers, such as Genworth Financial, report higher fees, noting an average of about $4,500 per month. And depending on where you live and the level of care being provided, assisted living costs can hit up to $7,000 per month.
What’s more, prices keep increasing; according to Genworth’s 2021 Cost of Care survey (the most recent data available), the median yearly cost for an assisted living community is $54,000, up from $28,800 in 2004.
[READ: Understanding the Different Senior Care Options.]
Assisted Living Costs
If you’re considering moving into an assisted living community, it’s important to think about finances and how you’ll pay for that care in your golden years, especially as your health needs change. Part of this means understanding how these senior living facilities charge for their services.
There are two primary ways in which assisted living facilities structure fees:
— A la carte.
An all-inclusive price gives residents one monthly payment to cover all services and amenities, from the room itself and food to utilities, activities, transportation and, in some cases, health services.
“People who have a lot of needs may want to choose the all-inclusive option,” says Han Hwang, executive vice president of partner sales and success for Caring.com, an online resource for people seeking information and support in caring for aging parents, spouses and other loved ones. That’s because everything is covered under one monthly bill, so you’re not adding services as you go and having to think about every dime you spend.
A la carte
On the other hand, “some places have a la carte options,” Fuller-Crawford explains. These options may include meals, one-on-one caregiving and medication management.
With a la carte pricing, residents select only the services they want and pay for those as individual line items. In some cases, you can add or remove services from month to month, depending on the contract at the community.
“For folks with fewer needs, a la carte might be the better option,” Hwang says, You can pick and choose only what you need, so you’re not paying for any service or amenity you’re not using.
Haidy Andrawes, the center administrator at Park Vista Assisted Living in Fullerton, California, agrees. For individuals with minimal care needs, this approach might be a good option for senior living needs and “can help with savings initially.” However, “over time, this setup can become costly as care needs increase.”
[READ: How to Coordinate a Parent’s Care With Siblings.]
Where Does Your Money Go in Assisted Living?
With assisted living, a large chunk of the monthly costs you pay goes toward rent on the unit where you’re living and the food you’re eating. Because fewer medical services are provided than at a typical rehab or nursing facility, medical services typically cost extra, depending on how the individual community structures its fees and service contracts.
The available services vary greatly from one senior living community to another. Some facilities offer a lot of medical support on-site, while others have only very basic services. Some also offer memory care and escalating levels of health care, but not all do.
Costs similarly range widely from community to community. “The cost really depends upon your level of care. If you need high levels of care and more attention, some assisted living communities can provide that, but it usually becomes more expensive when you need more care,” Hwang explains.
[READ: Does Long-Term Care Insurance or Medicare Cover Assisted Living?]
You might face limitations with payment options. “(While) Medicare does not generally cover assisted living care or long-term residential care, specific health care services that would typically be covered by Medicare in other living situations can be covered by Medicare for people in assisted living environments,” explains Gregg Ratkovic, the chief business officer with eHealth, a health insurance broker and online resource provider headquartered in Santa Clara, California. “That includes things like doctor visits, screening and more. But Medicare will not cover residency or day-to-day care costs.”
That said, there’s another caveat. “In limited circumstances, long-term care services may be covered by Medicare for short-term stays. If you’ve been an inpatient in a hospital for at least three days and your doctor feels you need specialized rehab or nursing care after discharge, Medicare may cover part of your costs for up to 100 days at a Medicare-certified skilled nursing facility,” Ratkovic says.
What’s more, if you qualify for Medicaid, a separate program from Medicare, you may have coverage beyond the benefits offered through Medicare, he adds.
Long-Term Care Insurance
Long-term care insurance is designed to help pay for the parts of assisted living that Medicare doesn’t. This type of insurance coverage is issued by a private insurer, similar to how car or home insurance works. It covers costs associated with assisted living as well as adult day care, memory care, hospice and nursing home care.
While long-term care insurance can be very helpful for covering costs, it’s typically pretty pricey. The American Association for Long-Term Care Insurance reports that the average annual premium for a 55-year-old single male is $1,700, but can reach as high as $3,081, depending on region and provider. A 55-year-old single female’s average rate is $2,675 per year, but could exceed $5,085 per year depending on location and insurance carrier. Combined, if both parties are age 55, the average total is $3,050 annually, but could top $8,534.
If you opt for long-term care insurance, be forewarned that the insurance plan doesn’t pay the senior living facility directly when it comes time to use those funds. Instead, you’ll have to seek reimbursement, which can be a hassle for some individuals.
Levels of Senior Care
In addition to location, the level of care you need factors into the cost of an assisted living facility.
Most assisted living facilities classify residents by the levels of care that they need. Levels of care are not dictated by any overseeing body. Each assisted living facility has its own definition of care levels and what’s on offer.
“Generally speaking, communities may have two to four levels of care,” Andrawes says. “These levels are determined based on the amount of support and care needs provided to the resident by the care staff.”
Although higher levels of care can increase the monthly cost of assisted living, they “can also assist with meeting the resident’s future needs in the same setting as their care progresses throughout the continuum of care,” she notes.
Each facility has its own approach to matching residents with the ideal level of care for individual needs, which makes it difficult to generalize across such a widely variable industry.
The following three categories, though, are typical:
1. Lower levels of care
Lower levels of care are for residents who need less assistance. These residents can walk on their own or with a cane or use a wheelchair to get to the dining room or activity sessions. Residents at this level also have no memory loss and can advocate for themselves.
They might need assistance with certain tasks, such as buttoning buttons or tying shoes when getting dressed in the morning, because arthritis in the fingers can make these dexterous movements challenging. Residents can usually manage their own hygiene, grooming and toileting.
A nursing aide or other caretaker likely assists to make sure they’re taking the right medications at the right time and monitoring any medical conditions. This level of care is less intensive for caregivers, and the resident may pay less for this type of assistance than those who need more support.
2. Higher levels of care
Seniors who need higher levels of care in assisted living need more help. They usually need hands-on assistance when getting around, and they need an arm to guide them or an aide to push their wheelchair. They also usually need more one-on-one assistance in bathing, grooming, toileting and getting dressed.
They may have some memory loss or need more guidance from caregivers. Decision-making may be more difficult for them, so often a caregiver will help them manage complex tasks and take medications. A caregiver may also see to other health needs. Typically, these caregivers will have some sort of medical training, they but may not be able to offer full nursing care, like what you would receive in a nursing home.
Residents at this level may have more complex medical needs and may be at higher risk of falling or other safety concerns. This type of care requires more intensive one-on-one assistance, sometimes from caregivers who have a higher level of training. Some facilities may employ RNs for these roles. As a result, this level of care tends to be more expensive.
3. Memory care
Some assisted living communities also include a memory care wing or floor where people who have Alzheimer’s disease or dementia can get the focused support and assistance they need. Staff typically have a higher level of training in the specific needs of residents with memory problems. Memory care tends to be more expensive than the two preceding levels.
As you need more care, you should expect your care costs to increase, too. And these expenses can add up over time. Hwang says you could be adding $250 to $1,500 a month on top of the base living fee, depending on the care you need.
Again, Medicare doesn’t cover memory care facilities, Ratkovic says. “However, Medicare will typically pay for things like cognitive assessments, home safety evaluations and hospital stays. Prescription drugs can be covered under Medicare Part D plans or Medicare Advantage plans with drug coverage.”
How Care Costs Are Billed
Exactly how much a service costs and how it’s billed to the resident “really depends on the operator and what their decision-making is,” Hwang says. Many operators are “for-profit companies, and they need to make a profit. Like any business, each one has a different pricing strategy.”
Personal care services, such as those offered in an assisted living facility, are usually a labor-based cost, rather than materials or equipment driven, so the hourly wage of the caregiver, plus any profit margin, are typically used to calculate care costs.
For the consumer, “I think it’s really important to know exactly what you’re getting, and do an apples-to-apples comparison” when choosing the right assisted living community, Hwang says.
For example, if you’re considering an assisted living community that costs $4,000 per month, but it offers add-on services a la carte, you might end up spending more like $6,000 per month for what you need. How does that then compare to the $6,100-per-month facility up the street that’s using an all-inclusive model?
Andrawes adds that “there may be upfront fees associated with some communities known as the ‘community fee,’ which is typically a one-time charge. You should also expect a monthly payment for room and board, a level of care or a la carte services, medication management and other ancillary services.”
Bottom line: Make sure it’s clear upfront what to expect in terms of fees and costs. Hwang says you should “anticipate what services you’ll need over the next 12 to 24 months” to help develop a budget.
Lowering the Cost
If you’re looking to lower the cost of assisted living, Casey Allen, head of product and co-founder of SeniorLytics, a Vancouver, Washington–based SaaS analytics platform for senior living, recommends looking for a facility that “offers assistance with activities for daily living but doesn’t provide nursing care or specialized medical services.”
And remember, each facility and its offerings are different, so he says it’s “important to research local assisted living facilities to compare rates and services. If you find that a particular facility is charging too much for its services, you may be able to negotiate a lower rate.”
Fuller-Crawford also suggests taking a family-centered approach to caring for a senior in their own home before making the move to assisted living. “The average lifespan is increasing every year with the help of technology and research. To help lower the costs, family members can share the care among themselves, instead of outsourcing, hiring help or placing loved ones in assisted living.” This approach may work better for larger families, and not everyone will be able to do it, but it can save a lot of money over hiring help.
In addition, in-home assistance or nursing may also be less expensive in some cases than moving to an assisted living facility, Fuller-Crawford notes. “The approximate cost for assisted living is $3,500 to $4,500 a month. Home health is paid hourly and ranges from $25 to $27 per hour, depending on the requested services and location.”
She recommends developing “a plan where a professional caregiver comes in the home at least 20 hours a week to provide family caregivers a break.” Respite care or adult day centers can also be great options if your loved one is still independent, as these options allow them to stay active and socialize with others while living in their own home.
However, over time, the senior may need more support, which could make assisted living the more convenient option. Allen adds that assisted living facilities may offer services that aren’t available in other care settings, so think carefully and compare costs individually between facilities and types of care before making a selection.
In any event, there’s no beating doing your homework when it comes to making the right decision about senior care. “Read the reviews, look up the surveys for the past five years. Look specifically for any deficiencies they were cited for and if, how and when they were addressed. Visit the centers at all times of day, not just in the morning. Speak with family members or actual residents themselves — they will give you the whole truth,” Fuller-Crawford says.
Assisted Living vs. Nursing Home Care
When a senior needs more support than an assisted living facility can provide, they will likely need to move into a skilled nursing facility or nursing home.
A key point of note, Hwang says, is that assisted living and nursing homes are not the same thing, and that’s not always completely understood. “Assisted living is really focused on activities of daily living, primarily non-medical related,” he notes. For medical needs, you should be looking to a nursing home.
If and when you do need that additional level of care, you should know in advance the policies of the assisted living center and how and when you can leave, says Amie Clark, co-founder and senior editor of TheSeniorList, a Clackamas, Oregon–based website that connects seniors and caregivers with resources, products and services. “Before signing a contract, make sure you ask about any additional deposits/fees or move-in/move-out costs. Also, make sure you understand your obligations in the event of needing to move out.”
Some communities require that residents give notice before moving, and how much time varies from community to community. “In the event of a hospitalization or rehab stay, what are your options for payment while no one is residing in the apartment?” she asks. Understanding these important issues can help you determine how much your care will cost, especially as your health needs evolve.
No matter which assisted living facility you end up selecting, Clark says it’s wise to look for one that has “graduated care services, as care needs do change over time.” The more services and options are available, the longer you can expect to live comfortably there before having to make the next move.
Benefits of Assisted Living
While it’s certainly important to understand the monetary costs associated with assisted living, it’s also important to remember that there are some hard-to-quantify gains that can come from moving to assisted living, Hwang says. “It’s also about belonging to a community of your peers and being able to have some camaraderie.”
Assisted living communities provide important social contact that helps alleviate loneliness, which is “one of the biggest challenges for seniors,” Hwang adds.
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Assisted Living: Understanding Levels of Care and Costs originally appeared on usnews.com
Update 02/24/23: This story was previously published at an earlier date and has been updated with new information.