What is an assisted-living facility, and how do I choose one?

What is an assisted-living facility? The wide number of options available makes defining the term difficult. Generally, however, assisted-living facilities primarily serve senior citizens who need more help than those who live in independent living communities.

These facilities typically offer rental rooms or apartments, housekeeping services, meals, social activities, and transportation. Their primary focus is social, not medical, but some do provide limited medical care. Other terms used to describe assisted-living arrangements are board and care homes, rest homes, and community residences. Continuing care retirement communities (CCRCs), also called life care communities, fit loosely into this category as well, although they provide what other assisted-living facilities do not: long-term nursing care and guaranteed lifetime services.

How do you choose an assisted-living facility? Definitely plan on touring the facility beforehand. Some facilities are large, caring for over a thousand people. Others are small, caring for fewer than five people. Consider whether the facility meets your needs:

• Do you have enough privacy?

• How much personal care is provided? What happens if you get sick?

• What types of medical services can or cannot be conducted on site? For example, an IV or catheter may not be permitted on site requiring you to temporarily or permanently relocate to another facility.

• Can you be asked to leave the facility if your physical or mental health deteriorates? What is the financial impact of this outcome?

• Is the facility licensed or unlicensed?

• Who is in charge of health and safety and what are the credentials and experience of the caregivers?

Read the contract carefully–this may save you time and money later if any conflict over services or care arises. As for the cost, a wide range of care is available at a wide range of prices. Some facilities may have many different options ranging from a small initial deposit and higher monthly expenses to a significant initial purchase with lower monthly expenses. The options involving a large initial deposit may allow for some of the deposit to be returned to your heirs after your death. Also, a portion of the monthly payment may be considered medical expenses which may have an impact on your tax return.

If you have long-term care insurance, check your policy. These contracts normally pay a specified dollar amount per day (typically $40 to $150) for certain skilled, intermediate, or custodial care in assisted-living facilities, for some specified period of time (usually two to five years). Medicare probably will not cover your expenses at these facilities, unless those expenses are health-care related and the facility is licensed to provide medical care.

Be sure to check with your wealth advisor, elder care advisor, and accountant to sort through the maze of financial decisions before making a final decision on a facility.

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