An Inside Look into What Affects the Monthly Rate for an Assisted Living Community

Apartment rent, utilities and services:  these are the general factors which dictate the monthly rent that is charged by assisted living or memory care communities to care for your loved one. Yet, are these all the factors which affect the monthly rent? If you have searched or are searching for an assisted living community for your loved one, you likely toured a number of communities within a given area and found that one community, which offers the same type of services, but costs more than a community down the road, though they both appear identical. That’s the question which the Office of Disability, Aging and Long-Term Care Policy office sought to answer and their results appeared in the informative report What Factors Affect Residential Care Facility Charges released in September 2014.

What Factors did the Researchers Find?

Using the facility and resident data collected from the 2010 National Survey of Residential Care Facilities, researchers analyzed the factors that could influence the monthly charge  residents pay. Many of the factors are what you would expect to influence the cost, such as type of apartment, staffing ratios and level of care residents required, but there were other more subtle factors also proved significant. Here are a few highlights.

Type of Community

Researchers found that as the size of the community increased, the monthly cost did too. Small facilities serving four to ten residents had an average cost of $2,596 while large facilities, which served 26-100 residents, cost families $3,028 per monthly. Though you might think that a nonprofit community would charge less than a for-profit community, no statistical difference was found with this factor. However, an independent community was found to have a lower monthly rent ($2,611) compared to a community that is part of a chain ($2,999). Location also matters; communities in urban areas cost more per month compared to rural areas.

The level of care provided by the community was also found to influence the monthly cost. If a community didn’t specifically offer Alzheimer’s or dementia care, the monthly cost was lower compared to communities where memory care was available or the only care type provided. If other healthcare facilities were located on the community campus, such as a nursing home or hospital, which is the case for continuing care retirement communities, residents could expect to pay a higher monthly charge.

How are Residents Charged for Services

Included in the base rate for most communities are apartment rent, dining, housekeeping and utilities. Some communities may also include assistance with activities of daily living in this base rate while others charge an additional fee for these services. This different type of payment structure can make it difficult for families to make accurate comparisons. However, researchers found no statistical difference in the monthly rent whether the community included the supportive services in the base rate. The factor that did influence the monthly rent was whether an entrance fee or deposit was required. On average communities that didn’t have this requirement charged on average $2,512 compared to $3,057.

Type of Apartments Available

Because communities strive to recreate the feel of a home within a community setting, a variety of floor plans are often offered so residents may select a plan that meets their needs. Yet, the results found that if an apartment has a kitchenette, whether it includes a microwave, oven or stove, the monthly cost was higher, about $290 more than an apartment that did not offer these amenities. Selecting a private room also resulted in a higher monthly cost ($3,015 to $2,342).

Employee Benefits and Care Provided

Personal care aides can make the difference in whether your loved one thrives or is miserable at a senior living community. Most families would likely want these staff be well treated and compensated appropriated for their important work by management. In this case, the level of compensation is related to a higher monthly charge that families can expect to pay. Researchers found that if a community didn’t offer benefits (vacation and sick time, health insurance or paid time off), the average monthly rate was $2,280 compared to $3,405. Facilities were also found to charge a higher monthly rate when residents received more hours of direct care.

What does this mean for families?

Though paying for care for a loved one isn’t an expense you want to scrimp on, this report does suggest unseen factors could influence what you pay each month to care for your parents. If you live in an urban area and moving your parents to a rural community isn’t an option—especially if you want them close by—then you can select a smaller apartment to reduce the monthly cost or choose a locally owned and operated community.

And while you likely want to pay as low of monthly rate as possible, you likely don’t want to compromise the care your loved one will receive. In this case, it couldn’t hurt to investigate how a community’s personal care aides are paid. If they don’t receive benefits or other compensation for their work, this can translate into higher staff turnover and higher of less qualified staff.

While having a dementia neighborhood in the community might mean a higher monthly cost and is an unneeded feature right now, you would gain the peace of mind knowing that memory care is available, avoiding the unnecessary stress and trauma of another move.

What the researchers also found is that the monthly cost increases as the level of supportive services increase. Residents who were incontinent, used a walker or had a hip fracture or injury due to a fall had higher monthly costs compared to residents without these health issues. So, in addition to making sure you or your parents can afford long-term care, you should encourage them to remain active and healthy to reduce future direct care costs.

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