Assisted living is affordable.
The short answer is yes.
Some of the anxiety about the afford-ability of assisted living can be dispelled by understanding current costs and profiles of residents living in this setting. The recently released 2006 Overview of Assisted Living* reports that the average age at the time a resident moves into assisted living is 83 years old. Given this fact, baby boomers turning 60 this year still have more than 20 years to plan and save for their own long-term care needs. A commonly asked question is "How much money will I need to live in assisted living?" There is no single answer, but some of the available data may help consumers plan. Today, the median monthly rates for freestanding assisted living communities range from $1,875 for a semiprivate room to $2,350 for a private room.
Many people are surprised to learn that the average length of stay in assisted living is just a little more than two years (27 months). While many consumers fear running out of money, the Overview data identified that only 5% of assisted living residents move to a nursing home because they have depleted their assets. Current income and assets data revealed that 25% of assisted living residents have annual incomes of less than $10,000. The median financial net worth of an assisted living resident, including home equity, is $250,000, and the lower quartile is $142,500 or less.
Similar to any major life event, consumers need to think about and plan for their long-term care. Personal savings is one option, but there are others, such as purchasing long-term care insurance and tapping the equity in one's home. Benefits available through the Department of Veterans Affairs and Medicare's hospice benefit can help some consumers pay for the cost of care.
All that said, however, many people are disappointed to learn that Medicare and Medicaid generally do not pay for assisted living. The bottom line is that consumers and providers must work together to make sure that the public is educated and informed about the cost and financing of long-term care so that people can plan accordingly.
While consumers need to take some personal responsibility for planning to meet their own long-term care needs, policy makers and elected officials share in the responsibility to make sure assisted living remains affordable. In recent years, we have seen a positive trend at the state and federal levels to shift away from an institutional bias and support more affordable home- and community-based long-term care services. In 2005, the Assisted Living Federation of America (ALFA) addressed this important topic by submitting a resolution to address the afford-ability of long-term care to the White House Conference on Aging. ALFA's proposal had three components: (1) Medicaid must be maintained as a safety net for low-income consumers, (2) Medicaid must be reformed to eliminate the institutional bias and allow true consumer choice, and (3) consumers must be educated about the cost of long-term care and personal responsibility in planning and saving must be encouraged.
These themes, supported throughout the 2005 White House Conference on Aging, were implemented in the Deficit Reduction Act of 2005 (DRA), which was signed into law in February 2006. The DRA supports Medicaid as a true safety net and implements changes to reduce artificial impoverishment. The DRA also funds creative home- and community-based demonstrations, such as the Department of Health and Human Services' Money Follows the Person program, to allow consumers to move from institutional care to home- and community-based settings. Finally, the DRA encourages personal responsibility by lifting the moratorium on the number of states that may operate long-term care insurance partnership programs.
Another component in the affordability equation is regulatory requirements. Thoughtful regulations are important for the assisted living industry. Overregulation can increase costs without improving quality of life. When new regulations are proposed, it is important for legislators to weigh each one to determine if there is true consumer benefit or just additional cost to the consumer and provider.
Consumers, providers, policy makers, and elected officials working together can ensure that we all have the opportunity to afford the long-term care setting of our choice. With that certainty in place, an excellent choice will be provided.
Maribeth Bersani is Senior Vice-President for Public Policy for ALFA. For further information, phone (703) 894-1805 or visit www.alfa.org. To send your comments to the author and editors, e-mail firstname.lastname@example.org.
* 2006 Overview of Assisted Living is a collaborative research project from ALFA, AAHSA, ASHA, NCAL, and NIC. Copies are available for sale at the ALFA store online at www.alfa.org.
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|Title Annotation:||ASSISTED LIVING review|
|Date:||Oct 1, 2006|
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