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Life Health > Long-Term Care Planning

10 Things Advisors Need to Know About Assisted Living Facilities

By Allison Bell

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What You Need to Know

  • In theory, these institutions will care for people who need only a limited amount of care.
  • The facilities end up serving many residents who need something close to nursing home-level care, and families must find ways to add services
  • Regulation is fragmented, and detailed, with authoritative, independent sources of facility information hard to find.

Clients who shudder at the thought of entering a nursing home may be much more open to the idea of moving into an assisted living facility that offers one-bedroom apartments, a garden, an atrium and a piano lounge.

But the same regulatory flexibility that makes the facilities attractive and popular can lead to confusion, or worse, for residents and their families.

“These problems occur at every economic level, from $50,000-a-month or more paid to luxury assisted living to the 20% of seniors who access assisted living through public funds,” Richard Mollot, executive director of the Long Term Care Community Coalition, testified in Washington last month at a Senate Special Committee on Aging hearing on assisted living facilities.

Sen. Bob Casey, D-Pa., the chair of the committee, noted that the hearing was the first the committee had held on assisted living in about 20 years.

“It’s long past time for Congress to reexamine this model and ensure it’s meeting our nation’s needs,” Casey said.

Here are 10 things any advisor who helps clients with retirement planning or income planning needs to know about the realities of how U.S. assisted living facilities work, drawn from the written testimony submitted for the hearing and from oral testimony given at the hearing.

1. U.S. assisted living facilities have a higher population than North Dakota.

North Dakota has about 800,000 residents.

The United States has about 30,600 assisted living facilities, and those facilities have about 478,500 workers, 1.2 million licensed beds and 818,800 residents, according to Jennifer Craft Morgan, director of the Georgia State University Gerontology Institute in Waleska, Georgia.

That means about one in every 400 U.S. residents lives in an assisted living facility.

Aside from true ultra-high-net-worth clients who can easily bring skilled nursing facility-level care to their homes, most clients who are doing anything about long-term care planning are probably thinking about the possibility that they could end up spending time in an assisted living facility, or in a continuing care retirement community that includes an assisted living facility component.

2. The facilities are supposed to serve people who need a little assistance with living.

A typical facility offers round-the-clock supervision; help with cooking, housekeeping and maintenance; medication management; and some help with personal care, such as showering.

“This differs from nursing home care in that there is no promise of 24/7 access to medical services or constant supervision” in assisted living, Craft Morgan said.

3. Many facility residents need extensive support.

Partly because older people and their families often prefer hotel-like assisted living facilities to hospital-like nursing homes, and partly because assisted living facilities need to fill beds, the facilities are serving many residents who need something close to nursing home-level care.

They may give a client a quick dementia and functionality test but go easy on the grading for a pleasant individual who can afford the monthly payments.

This means that families end up finding ways to add services that assisted living facilities rarely provide, such as home health care, physical therapy, occupational therapy and hospice, Craft Morgan said.

“About 42% of assisted living residents have a dementia diagnosis,” she added.

One problem is that well-meaning clients who have lobbied to get Mom into the lovely ordinary assisted living facility apartments, rather than the smaller, darker, more closely watched memory care units, may learn than Mom has “eloped,” or wandered out of the facility without supervision.

Elopement can lead to embarrassment for Mom’s children and a quick shift to memory care at best, and, at worst, anxiety, injury or even death for Mom.

4. “Typically less expensive than nursing home care” does not necessarily mean cheap.

Casey reported in his opening remarks that assisted living facility care costs about $54,000 per year, or $4,500 per month.

Patricia Vessenmeyer, a family caregiver from Gainesville, Virginia, said that the starting figure for care for her husband was $7,900 per month but that care actually ended up costing $13,000 per month.

“It did come out of my pocket, because my husband had chosen not to do long-term care insurance,” she said.

If a client with about $10 million in assets spends about five years in a nice, somewhat expensive assisted living facility, that could easily eat up $500,000 to $1 million in cash payments, or about 5% of the client’s assets.

5. Medicaid pays some of the bills.

The old rule of thumb was that Medicaid paid for nursing home care and that private insurance or families paid for assisted living facility care.

Today, 47 states and the District of Columbia use Medicaid money to pay for assisted living facility care for at least some patients, and about 20% of facility residents use Medicaid to pay for their care, Mollot said.

One reason having some liquid cash, long-term care insurance or home equity that can be used to pay for care: An attractive long-term care complex that does serve some nursing home residents with Medicaid may offer the Medicaid beds to patients who have spent a minimum number of months in the assisted living facility arm as private-pay patients.

6. The federal government has dipped a toe in assisted living facility oversight.

The federal government, since 1981, has required each state to set up a Long Term Care Ombudsman program.

The Older Americans Act amendments that created the ombudsman programs calls for the programs to resolve concerns about “board and care” facilities as well as nursing homes.

Assisted living facility representatives in some states, including Connecticut, have argued that the ombudsman program should not handle assisted living facility concerns because the federal statute does not use a definition that includes assisted living facilities.

But Mollot testified that he believes that the program has been authorized to monitor assisted living facilities.

7. State oversight efforts vary widely.

Craft Morgan testified that 45 states inspect newly licensed assisted living facilities but that only 39 conduct follow-up inspections every year or every two years.

Just seven states require the facilities to file annual reports.

She cited a survey that found that in half of states, three or more state agencies split assisted living facility oversight.

8. Getting anything but the most basic information can be challenging.

States’ relatively light approach to regulating assisted living facilities may help them hold down costs and respond to residents’ interest in distinctive amenities quickly. Facility owners point out that the proof they strategy is working is the popularity of their facilities.

But, in part because of the regulatory flexibility and facility diversity, “in the realm of assisted living, obtaining crucial indicators is challenging, if not impossible,” Mollot said in his written testimony. “Who’s providing care? How much will living and services cost? What happens when/if I need more care and services? What happens if I run out of money? What is the quality record of this facility?”

9. The commercial information providers often have clear conflicts of interest.

Mollot noted that many well-known long-term care facility information services that look as if they might be independent actually depend on listing fees from the facilities.

“You have to rely on facilities or facility marketing materials,” he said at the hearing.

State long-term care facility locator websites ”tend to be very flimsy,” he added. “Most often what we’ll see is they just list the facility. They may list the facility administrators’ phone number and the address. Sometimes there’s a little bit of information about quality ratings.”

But the information available is not nearly enough, Mollot said.

10. Setting up standardized, independent new information sources might help.

Mollot suggested that the federal government or another party could help by creating an independent, centralized and standardized database that provides key information about assisted living facilities’ performance, such as staffing levels, along with information about the facilities’ fee schedules.

Credit: Adobe Stock

Allison Bell

Think_Allison

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