How to Avoid Paying Too Much for Senior Living

he cost of senior care keeps rising year by year, but many senior living costs can be significantly lessened if you do your homework ahead of time.

How to Avoid Paying Too Much for Senior Care

As baby boomers reach retirement age and start needing long-term care, both demand and costs for various kinds of senior living are expected to keep going up. The average monthly cost in 2012 for assisted living was $2,714—an increase of 5.1 percent over 2002 costs (Genworth Cost of Care Survey; Congressional Budget Office). The good news is, many unnecessary expenditures can be mitigated with proper planning and research. By taking enough time and care to find the right place for your aging loved one’s specific care needs, you can avoid overpaying for senior living.

Facts About the Cost of Senior Care

Though Medicare and Medicaid cover the largest proportion of senior care expenses, the amount Americans pay out of pocket for senior living is still staggering. In 2011, seniors and 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 2012 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.

Tips to Help You Avoid Paying Too Much for Senior Living

1. Get help from a knowledgeable advisor.

Whether it’s someone you know who has looked for senior care before, or a professional 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, CA.

2. Understand the cost of different levels of care and housing options.

“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.

3. Understand what is included in the monthly price of a facility.

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.

4. Find out whether there are additional fees, and what they are.

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.

5. Ask about pricing incentives, move-in specials, and other financial enticements.

“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.

6. Plan ahead and do your research on specific facilities.

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.”

How to Avoid Paying Too Much for Senior Living by Sarah Stevenson