Many seniors can’t afford assisted living

Many of the nation’s elderly and their families are discovering that longevity has its price. Seniors needing help with daily life can expect to spend an average of $2,708 a month for assisted living and about $6,570 monthly for a nursing home in Spokane County, according to a study by the MetLife Mature Market Institute.

While statistics for Kootenai County weren’t available, calls to two dozen facilities found base rates that ranged from $1,500 to $3,500 for a room or apartment in a place that offers assistance with meals, grooming, medication, laundry and housekeeping. Rates climb higher when other services, such as medication dispensing and help with showers, are added to the mix.

At rates greater than many annual incomes, retirees can spend through their life savings in the blink of an eye.

Industry experts say that high long-term care costs, record longevity and inadequate planning are contributing to increased demand for Medicaid, the government-funded health insurance program for low-income people. In turn, assisted living and skilled nursing home associations say the program is underfunding care.

The shortfall between what Medicaid pays and what lodging and care costs is making it tough for low-income seniors to find assisted living services. It’s also driving increases in private pay rates, causing seniors to spend through their money faster and, in turn, to need government help.

“It’s no secret in all of health care. If we go to the doctor, we pay more because of the Medicaid shortfall,” said David Kyllo, executive director of the National Center for Assisted Living.

Of approximately 60 assisted living centers in Kootenai and Spokane counties contacted by The Spokesman-Review, a majority limit the number of rooms available to people on Medicaid.

Some relief may be on the way for Washington’s assisted living centers and skilled nursing industry.

State lawmakers have proposed rate increases from state and federal funds totaling $61 million for nursing homes and about

$17 million for boarding homes for the 2007 to 2009 budget. The budget item passed through the appropriations committee on Thursday morning.

Gary Weeks, executive director of Washington Health Care Association a trade group representing assisted-living providers, applauded the effort, saying the increases amount to $3 to $4 a day in 2008 and $1 to $2 a day in 2009.

“That’s a good start but that doesn’t fully cover the $23 that we lose on average a day on Medicaid,” Weeks said. “Eventually you can’t keep raising the private pay so the alternative is you stop taking Medicaid.”

Idaho doesn’t have any rate increases on the table. To offset any losses for caring for residents on Medicaid, North Idaho assisted living facilities offer semi-private rooms for people on public assistance.

“It makes it more affordable for the facility to serve that population,” Kyllo said.

Alice Thibault and her two business partners, Gary and Jennifer Trefz, at Living Springs Inc., a 14-bed assisted living home in Post Falls, walk a fine line between serving low-income elderly and going into a financial hole. Unlike a handful of larger centers that no longer accept Medicaid, 40 percent of her residents are on public assistance.

She believes assisted living providers have an obligation to make provisions for people who’ve contributed to the community but can’t afford to foot the entire bill for care. Otherwise, the elderly can go without help or end up in a nursing home, she said.

“The money that’s in your pocket shouldn’t determine whether you have the privilege of living in an assisted living (center) or ending up in a skilled nursing facility or something that is more institutional,” said Thibault.

A few places decline to accept Medicaid, including Waterford on South Hill, Harbor Crest at Cedar Canyon Estates and Fairwinds Northpointe Retirement Community.

Most of the assisted living homes in Spokane and Kootenai counties say they accept a limited number of people on public assistance. However, a growing number, including Orchard Crest Retirement Community and Guardian Angel Homes, limit Medicaid acceptance to some of the residentswho pay privately for years and run out of money.

While most seniors needing Medicaid legitimately spend through their money, Kyllo is critical of attorneys who work with seniors to help them divest assets to their heirs and access public assistance sooner.

Property management versus providing care

Mike Hargrave of the National Investment Center for the Seniors Housing and Care Industry, an Annapolis, Md.,-based research company, said there aren’t exact figures on total revenue for assisted living, but NIC estimated that the industry generated $17.9 billion two years ago.

Assisted living went through a building boom in the late 1990s “that came to a screeching halt” when some facilities couldn’t fill beds and rooms.

“During that time the industry has been licking its wounds and slowly recovering,” Hargrave said. As rates and occupancy rise, more companies are building.

Still, getting financing to build facilities is challenging for some businesses, he said. The industry is changing as leaders such as Sunrise Senior Living and other chains sell facilities and lease them back — focusing on care instead of property management. Sunrise Senior Living operates in 38 states and has 397 facilities with the capacity to serve 32,244 residents.

“There’s a big (debate) right now. Is this a real estate business or is this a care business?” Hargrave said.

For Thibault the focus has always been on care but the ability to expand is a matter of economics. Two years ago, the owners of Living Springs bought five acres in hopes of building a bigger facility offering dementia care services. However, Thibault said, they put the project on hold when construction costs rose and Medicaid reimbursements lagged, making it impossible to build the center without increasing private pay rates by hundreds of dollars a month.

“You’re looking at millions of dollars to build a fair-size community,” she explained. “In any business, if you’re not making your bottom line than your rates have to go up.”

In a labor-driven industry, providers say that staffing costs are high. Thibault pays workers about $10 an hour — nearly double Idaho’s minimum wage — in hopes of attracting and keeping a quality workforce. She also creates family-friendly schedules for working moms and offers paid time off. As a result, Living Springs has retained most of its staff for the entire time the three partners have owned the facility, nearly four years. She’d like to offer medical benefits, but can only afford to provide limited vision and dental.

Thibault doesn’t fault the government, but acknowledges there must be better ways to provide for the elderly and the people who care for them.

“I wish that for the sake of the future caregiver situation that we could find a better solution,” she said.

The future of care

Caregivers will become increasingly important as the Baby Boomer population ages.

A 2006 study by MetLife estimated that more than a million Americans live in assisted living homes across the nation. An estimated 1.6 million live in nursing homes. By 2030 the population aged 65 and older will more than double to about 71.5 million, the report said.

Nationwide statistics show most people will have trouble funding their own long-term care. Kyllo said the average assisted living resident nationwide is 85 years old, moved in at age 83 and makes under $16,000 annually. Most have total net assets, including homes, of less than $250,000 and pay $30,000 a year and more for care.

“People don’t plan to be 80, 85, 90 or 100, but that’s what’s happening,” said Kyllo, who suggests that people look into purchasing long-term care insurance.

Nick Beamer, executive director of Aging and Long Term Care of Eastern Washington, an agency that builds systems for providing in-home care for seniors and people with disabilities, said the number of nursing home residents has decreased by about half in the past 15 years.

That’s because the state started using Medicaid waivers to encourage alternatives to the more expensive nursing home care. In the past 15 years, the state started using Medicaid dollars for adult family homes, assisted living facilities and in-home care.

In addition to about 50 assisted living centers in Spokane County, there are about 200 adult family homes offering care in small settings. Like some of the top assisted living centers, some adult family homes specialize in providing higher levels of care.

Through ALTCEW, the elderly are able to receive supplemental resources, such as Meals on Wheels and in-home personal care, which helps them remain in their homes. Because in-home care is less expensive, the state worked with local agencies to bolster those programs, some which are based on income eligibility.

“Basically what we’ve done is really expand the in-home care options,” Beamer said. Options can include installing wheelchair ramps and lift-chairs to make homes more accessible, getting meals delivered, scheduling nurse visits or hiring home care workers or companions to take care of individuals.

Still, in an era of budget cuts and skyrocketing costs, funding long-term care will continue to pose challenges for both legislators and individuals, Beamer said.

“How many of us have $200,000? I don’t know, but we don’t think it’s a lot of people.”