Costs of Senior Housing Vs. Home Care

2020-09-03 | Uncategorized | By Alexa Willis | 0 Comments

In recent years, there has been a drastic shift away from institutionalized care for aging seniors. In the last two decades of the twentieth century rest homes began disappearing rapidly. The percentage of people over 75 in nursing homes fell from 9.6% in 1985 to 6.4% in 2004, according to the AARP Public Policy Institute. 

Elder care experts say the decline reflects the growth of less-restrictive types of care, ranging from assisted living to supervised adult day care. These alternatives are usually less expensive than nursing homes and often provide a superior quality of life. 

Elders, whether they are relatively independent in their care needs or require daily assistance, now have choices that have become increasingly popular since the latter part of the 20th century. Choices include publicly subsidized elder housing for those who are largely independent but are living on a modest fixed income. 

For the more affluent senior a new and different housing option has grown rapidly since the 1980s. Known as continuing care retirement communities, or CCRCs, these elder housing options often resemble five-star hotels both inside and out. 

With few exceptions continuing care retirement communities are not an option for those living on a modest income. Most require a large “entrance fee” that can be in the range of $250,000 or more, with additional monthly fees in the range of $3000-$5000 per month. Meals are served in an elegant dining room, ordered from a menu of several items prepared by well-trained chefs. Amenities include movie theaters, swimming pools, and many more attractive features. 

As the term continuing care implies, as residents of a CCRC get older and require more assistance with daily care, they can move to other sections of the community where assisted-living units and even skilled nursing beds are available. 

A related but separate housing option has also grown rapidly throughout the United States in recent years. Usually referred to as assisted-living facilities (ALFs) and sometimes as “intermediate care facilities,” these new housing options offer attractive hotel-like surroundings without requiring a steep entrance fee. 

For a fixed monthly rental fee, and some optional fees, monthly costs range from $2500 to more than $6000 a month depending on the facility, the level of services provided, and the size of the unit rented. A certain amount of daily assistance with activities, such as bathing and dressing, meal preparation, and transportation, are provided in assisted-living facilities. 

Most Elders Still Want to Stay at Home Until They Die 
Ask a room full of 80-year-olds where they would like to spend the last years of their lives, and 80% or more will state, “I want to stay in my own home until I die.” 

Just as the last 20 years has seen the growth of a variety of new senior housing options, so also has there been a rapid growth in “community-based alternatives” to allow frail elders to stay at home. 

With a family member or a home health aide to assist with bathing and dressing and light housekeeping, a few hours of assistance each day can allow an elder to remain at home for an indefinite period of time. 

Those with severe impairments, such as the advanced stages of Alzheimer’s disease, can’t be left home alone. This is where home care becomes an expensive alternative. At an average cost approaching $25 an hour, keeping someone at home with 24-hour care is more expensive than a nursing home. A typical nursing home on the east and west coast of the U.S. runs about $300 to $350 per day, while round-the-clock care at home can run as high as $600 per day. In an Age of Scarcity, Who Will Care and Who Will Pay? 

A USA Today/ABC News Gallup Poll of baby boomers in 2007 found that 41% who have a living parent are providing care for them — financial help, personal care or both — and 8% of boomers say their parents have moved in with them.  

It´s estimated that 34 million Americans serve as unpaid caregivers for other adults, and they spend an average 21 hours a week helping out, according to another study released last year by AARP. 

Finding a suitable living situation with the level of care an elder may need has become increasingly difficult for the middle class. The USA Today poll report states: “…few (ALFs) are publicly funded… The majority of these units are only available to those who can pay for them out of their own resources. 

In the fall of 2007, the U.S. Department of Health and Human Services announced it was dedicating $5.7 million in matching grant funds for “nursing home diversion programs.” While this sounds like an expansion of services, it’s really a shift of funds away from already inadequately funded nursing homes to pay for a modest amount of home care services. 

“The upper-income white population has other options than nursing homes,” according to the Brookings Institution. “They´re moving to assisted living or their well-off, baby boomer children are taking care of them in other ways.” 

For those elders and families of modest means the question of which living situation is best suited for their personal needs is superseded by a much more challenging one: “Where will we get the money to pay for the care that is needed?”