Can I Afford the Assisted Care I Need?

The question of cost is basic when we begin to search for a place to spend our declining years. Our resources are limited, and we don’t know how long they need to last. While visiting a certain very beautiful community, I met a lively, well-dressed woman who was chatting with a friend in the common room. She told me she was 98 years old and had lived there for nineteen years. Honestly if I had heard this when I was seventy-five I would have found it scary. The cost of getting old can be fearful.

Besides, even if our funds are unlimited, we have principles related to how we are willing to spend money. We have families, younger generations behind us. And we live with tender consciences in a needy world.

All I can tell you about this conundrum is what to watch for as you try to make a wise decision.

First, be aware that there are many retirement communities, owned and managed as businesses. Profit is their purpose. They may offer a lot that we want; they must if they are to get our business. And we may have good reasons for choosing one of these. A business offering care of the elderly is fair and reasonable, just like a restaurant or an airline.

At the same time we should be aware of how they make their money. After all they are getting it out of our purses. Do they pay their employees a fair salary? If not you will surely see them struggling to keep staff. Are they able to keep their promises to residents? Ask people who live there. And are there major areas of life without known price tags? I have become suspicious of large sums that pay for everything: food, cleaning, electricity, internet, entertainment, all provided, though I don’t know what any of it actually costs. As residents, we might live with this a while before we notice that when we go out for dinner just to be with friends or family, we still pay for the dinner we didn’t eat in the retirement home. We would like occasionally to buy something we really like from a store and eat it in our room, but we see this as extravagance, because we have already paid for dinner in the dining room. Finally, we realize that we don’t know what we pay for meals. We also notice that no one keeps score, that we ate or we didn’t, but if we bring a guest, we must pay for their meal.

We might be even more dissatisfied with this when we realize that there are communities that offer various meal plans, so that residents can have more control.

At the same time we should be aware that there are also not-for-profit communities. Sometimes these are institutions that began as homes for certain groups of people. For instance some Christian denominations manage homes that give preference to their own retired ministers. The daily activities in such institutions will likely reflect the culture and values of the sponsors, including fair prices, and their monthly fees will be lower, actually subsidized by the denomination.

Even within this kind of system there are varieties of financial models. Some require money up front, giving the impression that they are very expensive. My experience says, don’t be intimidated; do the math over periods of years. The advance funds may come back to you in the form of smaller monthly expenses and financial security in the future.

Part of the reality is that as we age we need more and more help. We begin to lose our balance. We get confused and forgetful. And as our needs increase so does our monthly bill in an average for-profit assisted care facility. A gentleman I talked with recently, as we waited to see a podiatrist, told me that he pays $1000 a month to have someone sit nearby while he takes his showers.  “They don’t actually help me.” he said. “They are just there because one time I fell. They come for ten or fifteen minutes twice a week.”  I wondered immediately what the person who sits there is paid hourly and concluded that this is an important service that his retirement home offers and at the same time a very lucrative business.

So, if you are going into an independent living situation and like the price, be sure to find out the cost of the assistance you may need in the future. This is crucial. As we fail, we will need more and more assistance in homes we have already lived in perhaps for years. Our families will be stuck with the bill.

There are communities that require a large sum of money in the beginning but offer a lifetime of care without increasing the monthly fees as services are added. The “buy-in” may work like an advance payment, assuring whatever care is needed for a lifetime.  This may, in fact, eliminate the need for long-term care insurance which is notoriously risky, because the insurers have built-in all sorts of escape hatches for themselves. I know a significant number of people who have paid for many years and now, when they need it, are unable to collect. I don’t mean to scare anybody out of owning insurance, but pay close attention, recognize the loopholes, the uncertainties. Read the fine print of your policy and when you choose a home, make sure your insurer will pay for the kind of service you get there. I know people who had to move again, because they learned too late that their insurer didn’t like their choice.

Before I go, let me remind you. We are fortunate people, because we live in a society that provides for the needs of the elderly, not just medical care and safe places to live, but fun activities and cultural opportunities and beautiful surroundings. Be grateful. It is good for your health.