What is the real cost of assisted living?

I was running around Raleigh and Cary last week, visiting Assisted Living options that would best meet my client’s needs and budget constraints over time.

The more I write up my findings for clients, the more aware I am of critical questions for any family looking for residential care to ask up front so they can understand both the cost of options apples-to-apples when they first move in, but also the potential costs over the course of their stay as their needs increase. While the average length of time a person who lives over the age of 65 stays in Assisted Living is two and a half years, some stay for less than that while others stay for much longer.

What does this mean cost-wise? Sure, in simple terms, one might assume, if it costs $54,720/year, that would mean if mom is there for two years versus five years, that would be $109,440 versus $273,600, right? What many don’t take into consideration when they sign on the dotted line is that most month-to-month Assisted Living rental communities also charge a cost for the resident’s care level on top of the quoted base cost. There are a handful of Assisted Living communities that provide an “all-inclusive” rate, which means what you see is what you get. If it costs $54,720/year this year, that is basically what it will cost (with a 3-5% cost-of-living increase) next year.

One blessing is that because these are month-to-month options, a family can move their loved one out without too much of a penalty. North Carolina law states a family is only legally required to give 14 days notice. The family would lose the upfront “community fee,” often equivalent to one month's rent, but that might be small beans compared to what they are paying annually. Of course, moving into Assisted Living in the first place is traumatic enough and no one wants to have to manage a second move.

What I’m trying to convey with this article is before you make that first move, ask to see the anticipated additional costs above the base rate. Before your loved one is accepted to an Assisted Living, the community’s nurse will do an evaluation to assess how much care time the new resident will require and consequently, be charged for on entrance. With the exception of a handful of “all-inclusive rate” communities, most Assisted Livings have care levels ranging from 0 to 5 (each successive level costing more), and then some tack on additional charges for medication and incontinence management.

Having visited over 70 retirement communities in the Triangle region, I was able to quickly hone in on six that might meet the needs of this particular family in terms of healthcare, distance to local family, financial resources and client preferences. In the six that I visited, the annual cost for a small private room ranged from $53,820 up to $81,600 at the lowest level of care. In other words, there was a $27,780 difference between the highest priced and the lowest priced. At the highest level of care, these same six options ranged from $54,720/year up to $111,480, providing a difference in annual expenditures between the highest and lowest of $56,760.

For some people, money is no object, but for the bulk of us, we can’t afford to throw $56,760/year out the window without giving it a second thought. The lowest cost place, at $54,720/year, was also a place that provided an “all-inclusive rate.”

One of the places I visited, a chain with over 1,000 Assisted Living and Memory Care communities across the United States, would not give me a base rate or the add-on costs without examining the potential resident. I politely told them that I could not responsibly include them in any report for a client, as I didn’t want a client to waste their time having a health exam after filling out an application if we had no idea where they would fall cost-wise annually. (This place has a reputation for advertising one rate, but quickly bumping up resident care levels so that annual costs soon reach $120,000.)

Ultimately, this client settled on an option which fell in the middle cost-wise, but was well-equipped to meet their specific health needs, was relatively close to family and suited their preferences and interests. And the family can rest at ease, feeling they made an informed decision, and knowing their loved one will be able to stay in the same community and sustain costs over time, even if they far outlive the lifetime expectancy averages.