Recent headlines paint a troubling picture for seniors hoping to live out their years in assisted living.
- A new study from Prudential finds that assisted living costs are up 13 percent from two years ago, averaging $3,241 per month nationwide, or about $108 a day.
- NPR reports on a large assisted living chain that has been evicting elderly residents when they run through their life savings and turn to Medicaid to pay the bills. Overall, according to the NPR piece, the assisted living industry has little space for those without assets -- while the number of assisted living communities has mushroomed in recent years, the number of beds for Medicaid recipients has dropped, to about 10 percent of the total.
- Fox New offers a troubling image of 100 or so elderly folks camped out overnight in the hope of getting an application for hard-to-get affordable senior housing units in Houston, where more than 600 are already on waiting lists.
- Then there's the housing market. Many seniors count on selling their homes -- their major asset -- to pay the bill for assisted living, so the current weak housing market is one more thing to worry about when calculating the retirement numbers.
None of this, however, means assisted living won't be there if your parents need it. It just means you need to do some careful planning to make sure your parents don’t find themselves in the shoes of NPR subject Cordelia Robertson.
Here's where to start:
- Do the math. The time for a thorough review of your parents' financial situation is before they need to move. Do they have long-term care insurance? Are they eligible for Medicare or Medicaid, and if so, what's covered? What are their income sources and assets? Do they own a home and, if so, what is its appraised value? You and your parents may want to meet with a Certified Senior Advisor, or the family financial advisor, to better understand their financial situation and how far it will carry them if they need to move to a retirement community. Crunch the numbers on a few scenarios: moving now or in ten years; living to 80, 90, or 100.
- Ask the question. When you're researching assisted living or other retirement communities, make sure you ask about their policy on accepting Medicaid, even if you think your parents will never find themselves in the position of needing it -- and ask for a copy of the policy in writing.
- Have a back-up plan. Have a family meeting with all the siblings, and talk about what you'll do if money runs out and Medicaid falls through. Is there low-cost senior housing in your area? Is there a family member who could take on the care of your parents?
With careful financial planning, you may never need to turn to "Plan B," but you'll sleep better knowing it's in place.
Image by Flickr user jurek d. , used under the Creative Commons attribution licence.
One mos after this article was written, the American economy collapsed. Now so much has changed. Medicaid is cutting drastically what it will pay for and facilities are refusing to take new patient/residents on the lower Medicaid rates. My husband and I represent Americans who due to injury or disease, could not plan for an orderly transition to long term care/assisted living. When my 55 yr old husband had a traumatic brain injury 2 1/2 yrs ago, 1st I waited for him to come out of the coma and begin breathing on his own. Seven mos later, I brought him home. I thought we were on our way to living a modest scaled back, but do-able life together. After all, we still had each other and we had our home. Two mos ago, he was re-hospitalized with a stroke and dx'd with Dementia/Alzheimer's. I was told he is not well enough to live at home anymore, - but don't worry, 'apply for Medicaid Long Term Care'. The "rules" are changing even as his application is being processed. His facility is changing it's "business plan" to more profitable patients - acutely ill with respirators etc. They are no longer accepting new residents on Medicaid for it's Intermediate care wing. I have been told that Medicaid has stopped paying for Intermediate Long Term Care. So when his Medicare coverage runs out in 3 weeks, we have a problem. He has also been rejected by 2 alternate facilities I've visited this week. Up until this week, I was hopeful. Under the Medicaid LTC program, a couple can qualify under higher income levels. The spouse can keep the marital home and the ill spouses income. Up until this week, I thought my only problem was getting approved for the program. Now I find that even if approved, the facilities are quietly switching away from Medicaid re-embursement. What good is a Medicaid spousal protection program, if the home has to be sold anyway to pay for the care? And, at $3 - $5 thousand $ a mo, proceeds from our home will run out in a couple years.