Ryan: All right. So welcome, everyone. I'm Ryan Molloy, managing editor of the Senior list. Today. I'm speaking with our cofounder, Amie Clark. About all things related to paying for assisted living. Welcome, Amy.
Amie: Hi, thanks, Ryan.
Ryan: Alright, so let's dive in. So pretty basic, but to get started, what exactly is assisted living?
Amie: So assisted living is one of the levels of senior housing that exists throughout the US assisted living is typically in an apartment-style type of living for people who are independent in many ways, but also may need some support services whether that's help with grooming, bathing, or medication management. There's a variety of services that can be provided and assisted living while supporting people to be as independent as possible. Generally, people in assisted living, you know, enjoy communal options such as communal dining activities outside of the building outings, that kind of thing.
Ryan: Great, and so I know this is something that my grandparents are currently thinking about. Um, real question. How much does the system living cost?
Amie: Yeah, and it's real. It's a really loaded question because it can range so much based on location even in the same location. You know, two facilities side by side can vary greatly, just depending on the size of the building the amenities that are offered. So in general, and I had to look this up depending on where you are in the US, the cost can range anywhere from thirty-five hundred dollars to seven thousand dollars a month. So the median cost of assisted living in 2020 was $4300 dollars a month.
Ryan: - And so sort of piggybacking off of that, you touched on how the different levels of amenities can affect the cost.
Ryan: Um, what about couples. How much does the living cost for couples generally?
Amie: Also a very loaded question. Facilities may charge for couples very differently across the board, so it can be hard to compare apples to apples. The first thing to consider and not just couples, but individuals as well, is that there's always going to be the base cost, which is also known as the room and board, so there's always going to be this number for the apartment that may include some things like laundry and housekeeping. So, we'll just call that the base friends. So that's the cost of the apartment. So for couples, if you know, generally, they're looking at a larger one-bedroom or a two-burner bedroom apartment, you know that just the base cost alone, for that size of apartment can range from $4000 to $6000 a month.
So, on top of that, just like an individual person, each person of the couple is going to have their own care plan. So each of them is going to be charged individually for the services that they require. Now, of course, if someone is completely independent, which happens. You know, one spouse needs help or a lot of help, and then the other spouse is completely independent, so depending on the care needs of those two, all those costs will be wrapped up into one. So for a couple, you know. realistically, let's just say one person is quite independent and the other person needs, you know, quite a bit of help. You know, for a couple, it could range anywhere from $5000 to $10000 a month. Again, that's a huge range of money, I know. but it really just depends on all of those different factors,
Ryan: Okay, great, yeah. So it seems like it just kind of varies a lot mostly by location and the type of care given.
Amie: Yeah, I always recommend to people and of course, this may also be impacted by how much time you have, and you know what else is going on in that moment. If it's crisis-driven or if this is more of a pre-planning step looking at different facilities. But really, you know, look at as many different facilities as possible in order to get a good idea of the range of those costs that are available.
Ryan: Okay, great, so let's go. Maybe this is a little bit less loaded, so just more broadly speaking. According to Genworth's cost of care survey assisted living costs have increased over 70% since 2004. Could you maybe give us some insight about what has caused such a big hike in the price?
Amie: Yeah, that's such a huge leap. We always tell people expect anywhere from 3% to 6% each year. Your cost to increase, however, that doesn't add up for the 70% that we've seen since 2004, but there are a number of factors that have led to that increase. One of them is, you know, attributed to the huge caregiver crisis that you know. Health care, in general, is experiencing, but especially in long-term care, there just aren't enough people working in the field. So that leads to higher competition for quality staff. It leads to higher wages that are being demanded by caregivers themselves so that in turn will lead to rising costs.
The other factor that I've seen personally just you know, over the 20 years or longer, and that I've been working in long term here. You know, people, the residents themselves are coming into these communities needing more help than they used to the acuity that we're seeing in assisted living, specifically is much higher than it used to be. We're seeing a lot more, you know, Alzheimer's and dementia-related diagnoses on top of, you know, other chronic conditions. So you have to have staff that is more specialized that are more knowledgeable as to how to deal with people that have you know behavior issues and all of the things that are going along with higher acuity.
People are staying at home longer. They're staying at home as long as they can, and I think that's just leading this trend of people just not entering this level of care until, you know, much later in their you know their aging journey than they used to. And specifically, in 2020, I think we saw summarizing costs because facilities had to pay for PPE for, you know, residents and staff. That's the huge expense, plus there were some changes in the guidelines, you know, CDC guidelines as well as some other federal guidelines that change for facilities across the US. So all of that combined, I think, is part of why we've seen such a drastic increase in costs.
Ryan: Yeah, COVID is definitely not helping things there.
Amie: Not at all for sure.
Ryan: Okay, so on the note of paying for assisted living, does medicare cover assisted living any capacity Medicare does not cover assisted living?
Amie: The only thing that Medicare would pay for in assisted living is an outside skilled service like physical therapy or occupational therapy, but it's for, you know, it's a short period of time. It's just for those specific skilled services through a home health agency,
Ryan: Okay, and what about Medicaid. Will that cover system living?
Amie: Yeah, so Medicaid. Yes, as long as someone qualifies for Medicaid, and I'm sure we'll link to the video in the description, but we've done past videos about Medicaid and who qualifies for that, and and what things it does cover. But just in a very general, yes or no answer, yes, medicaid will cover assisted living.
Ryan: Fabulous, and just going down the line of all these different funds.
Ryan: What about VA benefits? Do they pay for assisted living?
Amie: Yes, so the VA does not pay directly for assisted living, but there are probably the most widely known of VA program is Aid and Attendance. It's a pension for veterans and their spouses, and Aid and Attendance will pay for services that the veteran or their spouse may need, so that can include services in the home. You know, assisted living modifications to the home. You know, a variety of long term care services for, so for example, my own grandmother, who was a a widow of a veteran, her - she received it was a little over a $1000 a month from the Aid and Attendance program to help pay for her assisted living costs, Ryan: catch on and then next would assisted living be tax-deductible.
Amie: So this is a great question, and I actually had to do some research on my own because I wasn't sure, but yes, assisted living as a medical expense can be tax-deductible. So just depending on your income and the expense itself, and I'm going to close this just because I don't want to get it wrong. The summer, all of the cost of assisted living may be tax-deductible as a medical expense - medical expenses including some long term care expenses, are deductible if the expenses are more than 7.5% of your adjusted gross income. So my advice to anybody who is wondering this for themselves would be to consult with the CPA specifically about their situation and that have been incurred through assisted living.
Ryan: And it sounds like, though, based on if it's 7.5% of your adjusted gross income and a lot of people would qualify to detect that.
Amie: -And there were also some when I was looking at the IRS website, there were also some - there were some things that said, depending on how the assistant living classifies your medical expenses, that custodial care wasn't necessarily covered, but medical expenses were. So some of it may have to do a little bit with the logistics of the assisted living and how they classify certain things. So it sounds like it potentially could be complicated or potentially not be complicated, just depending on someone's circumstances.
Ryan: About how those expenses are classified. Alright, and so it sounds like you have much experience with this. How do most people pay for assisted living?.
Amie: So most people you know again as a general statement pay for assisted living privately out of their own pocket. Of course, people who have planned ahead and purchase something like long term care insurance. There, you know, according to whatever their policy is that long-term care insurance would be paying for assisted living. But I think in terms of most people, most people are going to start out paying privately out of pocket now. Of course, for many people that is not going to be a good long-term solution. They may not have the financials to support paying out of pocket long-term, so then Medicaid is an example of a program that would kick in once somebody no longer has the finances to pay privately out of pocket.
Ryan: Got you. Yeah, I know that's one of my grandparents' biggest fears going to assisted living, running out of money, and then just getting like booted into a nursing home, as they would say.
Amie: Yeah, so and Iíll touch on that type of scenario. I think with the next thing that we'll discuss, but there are some ways to avoid that for sure. But it is a major concern, and it, you know, unfortunately, it's not something that a lot of people really think about until they really are starting to get towards the you know, eventual reality that they're going to need some sort of long-term care.
Ryan: Definitely, it seems like planning ahead is really essential in all of these instances. And so what are some of the tips you have for affording assisted living?
Amie: Yeah, and you've led me right into the answer planning ahead. I would have - I would have to advise anyone, especially people, you know, even in their 40s 50s. The statistic is 70% to 75% of people will need some form of long-term care in their lifetime, you know, so that might just service at home, but that you know could be all the way up into a nursing home level of care.
So given that most people, most of us will need some form of long-term care. Itís so important for people to pre-plan and to think about this and to think about those costs in their retirement. You know when people are trying to figure out how much they'll need to retire long-term care and medical expenses is one of the biggest costs that people will probably have to shell out. So that's my first, you know, like blanket statement about that. Yeah, if it - person like your grandparents are concerned about running out of money. My first piece of advice would be to make sure that the community that they're moving into or that they're looking at has a Medicaid contract so that when they do run out of money and qualify for Medicaid, they can stay there.
Ryan: So not all assisted living facilities do take Medicaid?
Amie: Yeah, they have the choice whether to accept Medicaid residents or to keep people who have gone through their money in the facility under a Medicaid contract. So there are some - there are some pretty strict rules surrounding Medicaid. If a community has a Medicaid contract in place, they cannot make someone leave if they run out of money, you know, as long as they qualify for Medicaid, so they cannot kick somebody out based on financial status. So as long as your grandparents move into a place with the Medicaid contract, they should be fine given everything else is the same that they haven't, you know, grown out of the actual services that are offer that their care doesn't exceed. You know what can be provided but they cannot be booted for a change in their financial status so to answer that question.
Ryan: Alright. Good to know.
Amiee: Another tip I would say for people who are looking to save a little bit of money, so to speak is that, of course, a smaller apartment is going to cost less than a larger one. So Iíve seen plenty of scenarios where people start out in a one-bedroom, and then as time goes on realized, they just don't necessarily need the space, or they'd rather cut the expense of that one-bedroom to a studio apartment. So I would recommend for people that are currently, you know in assisted living, looking to save on some of their costs, you know, talk with the marketing team. Those are the people that usually have, you know, a good idea of what apartments are available or apartments that are coming up, you know, to see if they can direct transition into a smaller apartment.
Another interesting concept that I personally have not seen much of, but I know it's out there is people who apartment share and assisted living, so if you can find someone that you're compatible with it, sharing even a two-bedroom apartment would greatly reduce that. You know, high cost of room and board and assisted living. I would make sure I would tell people to make sure they understand the fees that are charged and assisted living, especially upon moving. There's you know, the move-in fees can range from something very minor to some really high fees which are sometimes negotiable.
Think about it like a car dealership in the sense that people salespeople have a quota that they have to mean, and every month towards the end of the month there's a good chance that you'll see some deals, whether it's a reduction in the move in fees or complete elimination of moving fees or even a reduction in the room and board. You know the actual costs if the - if they're running a special to try to get people to move in. Yeah, so you know, I just - I like to tell people sometimes those can be negotiable. Do not hesitate to ask and let the team that you know, let them know that the people that you're working with when you're touring facilities that you know you're really interested in saving some money. And what can they do to help encourage, you know, to move in and spend a little bit less money at the facility so it sounds like there's sometimes a bit of room for haggling.
Ryan: Yeah, potentially.
Amie: Absolutely, yeah, yeah, and lastly I would say for people who already are in assisted living make sure that you are monitoring that monthly bill every single month, and if you see anything that looks off, if you see something that's being, you know, it has a higher cost, and it did last month, you know, talk immediately with the billing department about that just make sure you're staying in communication with billing with even administration and letting them know that you're concerned about the costs.
Sometimes facilities will have leeway depending on their, you know, their parent company. Depending on their vacancy rates, they may have leeway to reduce sprint for people who are concerned about money. Just in order to keep them in the building, it's less, you know, costly for them to do that than to start brand new with a whole another person and filling the room and the marketing that goes into that, and all of the things. So you know again, just don't hesitate to ask and stay in communication with the people at the facility, the administration of the facility.
Ryan: Okay, great.
Amie: So make sure you understand all those charges.
Ryan: Yeah, absolutely, that does it for questions about paying for assisted living. Thank you so much for joining me, Amie.
Amie: You're welcome. Thanks for having me and looking forward to our next video.
Ryan: Thank you, everyone, and be sure to check us out on the seniorlist.com for all things related to driving in place, have a good one yaíll.