The Confusing Costs of Continuing Care

Trying to figure out the costs of long-term care? Here is a great article that may help with some of your questions. For help with elder care and geriatric care management in South Florida, visit www.caremanage.com.

The Confusing Costs of Continuing Care

When 85-year-old Al Green was ready to make his last move, he settled on a residential community that offered tiered care – independent, assisted, and nursing – near his alma mater, Penn State. But it wasn’t as easy as picking a place and packing a moving van. First Green faced many decisions: Did he want unlimited health care at a relatively fixed monthly cost? Should his up-front fees be refunded to his heirs upon death? Each decision had a price–and it wasn’t trivial, he says: “Some people pay double what others do.”

Some 800,000 people — and counting — have already confronted the confusing costs associated with “continuing care facilities,” which have grown rapidly over the last 20 years to almost 2,000. Before the recession slowed construction, the industry had added another 200 facilities this decade, according to preliminary data from Ziegler Inc., an investment bank that underwrites such facilities. And as baby boomers — and their parents — age, even more will have to confront the confusing costs of continuing care.

But more facilities means more unique, byzantine fee structures, critics say. For retirees who are managing a finite nest egg, the distinctions are critical: A 10-year stay at one facility might cost well over $1 million; at another, a resident might pay just $300,000. And even within a single facility, the primary costs — the entry and monthly charges — can be structured in many different ways, making it hard to compare the value of one to another, says Steve Maag, the director for assisted living at the Association of Home & Services for the Aging. “If you’ve seen one CCRC [continuing care residential community], you’ve seen one CCRC,” says Maag.

The menu of fees is long, and what’s included varies widely by facility. The biggest charge is usually a move-in fee that’s roughly equivalent to the price of buying a house in the same area, but often with all the money required up-front. If you want your heirs to get any of that money back when you die, you’ll usually pay more to move-in–often much more. Then there’s a monthly fee, which might cover basic health care but add high daily fees for the use of comprehensive care services. The monthly charge at one facility might also include a generous meal plan, for example, while another residence charging about the same could offer a stripped-down plan with the option to upgrade at a higher cost. What’s more, each level of care – independent, assisted, nursing – may have its own set of amenities and services at different prices.

Read more: How to Calculate Costs of a Continuing Care Residence – SmartMoney.com

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