A Piece of Paper or a Place to Live | Financial Planner Long Island

”A Piece of Paper or a Place to Live”

All around the country, and particularly here on Long Island, the number of individuals age 65 and older are growing at a much faster rate than the rest of the population. With a strong desire to remain active, independent and close to family (especially grandchildren!) and friends in the communities they have lived in all their lives…the construction of alternate living facilities has become a fast growing industry here and throughout the country.

There are a variety of living facilities that are available based on the physical needs and support services required by individuals. In this article, I will focus on the two main types…the Assisted Living Facility (ALFs) and Continuing Care Retirement Communities (CCRCs).

Assisted Living Facilities (ALFs) are neither nursing homes nor retirement communities; they are something in between, a middle ground between independent living and nursing home care. These facilities can be free standing, part of a CCRC, or affiliated with a nursing home. They come in all shapes and sizes (serving both individuals and couples) from housing a few residents to a hundred or more residents. Help is provided to those individuals who need assistance with day to day tasks (such as dressing, bathing and medication) but otherwise are fully able to manage by themselves and don’t need the full medical services of a nursing home. Accommodations can range from a separate apartment to a simple bedroom and sitting room with a shared or private bathroom. Basic services such as housekeeping, laundry, transportation and recreational services are provided. Three meals a day may be taken in your apartment or in the communal dining room. Nursing personnel pay daily or weekly visits to check on residents regarding their medication and general well being. The key issue to most of the residents is the sense of security knowing that medical personnel are available 24 hours a day in case of an emergency and each apartment is equipped with an emergency call button or other emergency alert systems to summon help.

Assisted Living Facilities are popular with families and caregivers since is it less restrictive and less expensive than a nursing home (which more often than not has an uncomfortable sense of foreboding and stigma attached to the term and is the last place where many older adults want to go). In addition, this type of arrangement provides the individuals with as much independence as they want or need, foster a greater degree of self-esteem and confidence and all at a lower cost than a conventional nursing home.

These facilities, although less expensive than nursing home, are costly and can range from $1,800 to $6,000 per month. Rates and fee structures vary depending on where the residence is located, the size and style of the living unit, amenities and services provided, etc. Ask for a written statement of the resident agreement that will outline the services offered, prices and extra charges (for e.g. what is the rate structure…a flat daily rate based on the amount of assistance needed or one price for all). Please remember…Medicare, Medicaid and many Long-Term Care insurers do not cover these services! In addition, federal law and some state laws do not regulate these facilities. Of the 50 states, only 29 (not including New York) do regulate and license these facilities to ensure adequate care is provided to residents and that ethical business practices are followed. Since there is little regulation, the quality of the facilities, staff and services vary greatly. Be sure you visit the home, speak with the staff, and see how the residence is maintained and if the facilities meet your needs for care and independence.

To find out more information on Assisted Living Facilities you can contact ALFA in Fairfax, Virginia at (703) 691-8100 or www.alfa.org; or Senior Alternatives for Living at (800) 350-0770. AARP has a wonderful booklet, entitled Selecting Retirement Housing, with worksheets to help you determine if this is right for you…both emotionally and financially.

Continuing Care Retirement Communities (CCRCs) provide care for life and the promise of medical and nursing care when needed…this is the key element that distinguishes these facilities from other types of retirement housing…it ensures independence and access to health care for the rest of your life. As we age, our needs change. These facilities provide that care from living independently to a gradual or immediate change of having medical or personal care while staying at the same location. Couples and individuals (CCRCs provide for both individuals and married couples) must be ambulatory when they move to a CCRC but if they later become ill or disabled, certain nursing, health and personal services are provided. Nursing homes, rehabilitation facilities are usually on the premises of the CCRC, if not, they are nearby. Another key point is that if the health needs of one spouse require transfer to a health care unit, or should one spouse die, the surviving spouse can remain in the living quarters and be assured of uninterrupted care.

Living accommodations can be apartments, townhouses or detached dwellings. Services can also vary and there is generally a choice of recreational, cultural and social activities. The CCRC can be all encompassing offering libraries, beauty parlors, barbershops, banks, swimming pools and tennis courts. In addition, meals served in hotel style dining rooms, housekeeping, transportation, social activities are also included.

Alas, this sounds wonderful, but again convenience has its costs (unfortunately not covered by Medicare, Medicaid or LTC insurance). CCRC residents usually pay a one-time entrance fee (which may range from $200,000 to $600,000) in addition to monthly payments for services (which may range from $650 to $4,000 for maintenance, housekeeping, meals and other personal care services including health care). In exchange for these fees, you are assured of housing and services for the rest of your life, regardless of your health.

Typically there are three types of “contracts”: extensive (which provides housing, residential services and amenities as well as unlimited long term nursing care for little or no increase in monthly fees); modified (includes the above housing and residential services plus a specified number of days of nursing care or long term care) and “fee for service” plans (provide housing and residential services and some short-term nursing care).

Remember, a CCRC is a lifetime commitment. Please be sure you have your attorney/accountant/investment advisor review the contract documents before you sign them. The medical affiliation is also very important. Check the hospital/health system that will be supporting your CCRC. In addition, have your cash flow analysis prepared to determine if these expenses will be met by your retirement income, sales proceeds from your residence, etc. Last, but not least, find out if the CCRC is accredited by the Continuing Care Accreditation Commission, the only accrediting body for CCRCs. They can be contacted atwww.carf.org/aging, (202) 587-5009 or toll free at (866) 888-1122. You can also write to the organization at CARF-CCAC at 1730 Rhode Island Avenue, NW, Suite 209, Washington, DC 20036 E Street, N.W., Suite 500, Washington, DC 20004. In addition, there is a guidebook for consumers that can be viewed and printed from the website.

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