Long-Term Care Facilities: Types and Costs: Learn about the different types of long-term care facilities, how much they cost and how they can help your loved one.
Most older adults end up needing some form of care later in life.
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Getty ImagesAccording to the Administration for Community Living, someone who’s turning 65 today has an almost 70% chance of needing long-term care during their remaining years. About 20% of those people will need that care for five years or longer.
The good news is that there are many long-term care options available to seniors, but navigating the many nuances between them can be challenging.
In this article, we’ll walk through the various options as well as how you can budget for them.
What Is Long-Term Senior Care?
Long-term senior care encompasses a spectrum of options and a progression of choices. Initially, the “facility” where an older adult receives treatments, help with medications or personal care is often their own home.
Family caregivers and home health aides, sometimes in combination, can help make senior home care possible. For adult children who aren’t certain how much assistance a parent needs, geriatric care managers – also called aging life care managers – can assess people in their home environments, says Nancy Avitabile, owner of Urban Eldercare, a geriatric care management practice in New York City.
These professionals determine and manage appropriate services and may also make suggestions on reducing potential safety hazards in the home, such as slippery floors or difficult-to-navigate stairs, adds Avitabile, who is also past president of the Aging Life Care Association.
When home care is no longer able to meet a senior’s needs, moving into an assisted living community or a nursing home might be the next step, but they’re not the only options.
Independent living, continuing care retirement communities – also known as CCRCs or life plan communities – and group homes can all be the right fit, depending on your loved one’s care needs, budget, location and preferences.
Each one of these broad types of senior living options includes a variety of individual communities that cater to different tastes and preferences. Here, we dive into how these facilities vary to help you make the best choice for your situation.
8 Types of Long-Term Care Facilities
The following continuum of long-term facilities appears in more-or-less ascending order in terms of how much care and supervision residents need. (There can be a lot of overlap between these categories, so it’s not always a straight-line progression from one to the next.)
Independent or retirement living focuses on a self-sufficient lifestyle for seniors. These residences might be part of self-contained retirement communities or high-rise apartment complexes, among other models.
Independent living communities primarily focus on serving the social needs of residents,” adds Dr. Michael Tehrani, a geriatric physician and founder and CEO of MedWell Medical in Long Beach, California.
In that sense, he explains, it’s a little “like living in a frat house when back in college,” and many of the residents live there independently “without needing much support.”
Another popular option is active adult communities, or 55-plus communities. These are designed for seniors who live independently and want to live near or with other seniors. They also offer some social outings and group events for residents. They’re lifestyle-focused and typically do not offer meals or health care.
Someone who wants to age in place in independent living, but who eventually may need greater care, could hire more hands-on type of assistance while remaining in the same community, just like they would if they were in their own home, Avitabile notes.
Assisted living facilities offer assistance with daily personal care within a supervised setting, as well as meal preparation and housekeeping services. Assisted living is known for its community-based approach, with a focus on group and individual activities and efforts by staff to prevent residents from feeling isolated.
“Assisted living also has different levels of care that someone would buy into,” Avitabile says.
Residents who need lighter care, for instance, might opt for medication management, check-in services and morning assistance in getting out of bed and showering. Assisted living also has 24/7 caregiver support on-site.
Another level of care involves respite units, a recent innovation in some assisted living facilities, Avitabile says. In these transitional units, residents can benefit from medical services, such as physical therapy and nursing care, while still experiencing the amenities and attractive setting of assisted living. These units may serve residents coming from a hospital or rehabilitation center, for example.
One of the key selling points to assisted living is the range of amenities typically on offer. In some communities, this may mean luxury accommodations along with white-glove service with a concierge, car service, medical professionals on-site, swimming pools, state-of-the-art gyms, spas, yoga studios, art studios, movie theaters and multiple dining options, Avitabile says.
CCRCs offer a tiered approach for aging adults. Typically, residents move into single-family apartments or condominiums designed for independent, healthy adults. As their needs change, residents can transition to on-site assisted living or nursing home facilities.
CCRCs are intended to be the last place a person lives, but that streamlined convenience comes with a price – entering a CCRC typically requires a significant financial investment with hefty upfront entrance fees and monthly charges.
For more affordable, homelike options, “more and more states are licensing group homes,” notes Sandy Markwood, CEO of USAging, formerly the National Association of Area Agencies on Aging, based in Washington, D.C. “Typically, they’re privately owned, so you really need to dig in to find out what services and supports they offer.”
Also known as group homes or residential care homes, these neighborhood-based dwellings are run by licensed caregivers.
“Essentially, what’s on offer is the living space,” adds Dr. Ardeshir Hashmi, section chief at Cleveland Clinic’s Center for Geriatric Medicine.
Group homes have far fewer residents than nursing homes, perhaps four to 10 at a time, with caregiver support on-site.
However, unlike nursing homes, Hashmi notes, “they’re not promising any medical or skilled nursing coverage.” Instead, he says, “you may just be there because you need care with your day-to-day activities of living: eating, bathing, dressing, toileting.”
For military veterans with chronic medical conditions that meet a nursing home level of care, the Department of Veterans Affairs (VA) oversees a Medical Foster Homes Program. These facilities are a lot like adult family homes in that they’re private homes in which a trained caregiver provides support to a small number of people.
Considered an alternative to a nursing home, these homes are a good option for veterans who need nursing home care but don’t want to be in an institutional setting and would prefer a place with fewer residents.
The VA reports that veterans are responsible for paying for the care they receive at a medical foster home out of pocket or via long-term care insurance, VA Aid and Attendance benefits or another applicable benefit program.
Nursing homes provide medical and personal care services beyond what’s available in assisted living. Nursing care, around-the-clock supervision, assistance with activities of daily living and three daily meals are standard.
Most nursing home residents have chronic physical or mental health conditions that require a more intensive level of care than what can be handled in an assisted living community, and they can receive prescribed treatment and personal care as needed.
As with any type of long-term care facility, it’s essential to do some research and ask critical questions before choosing a nursing home. You can explore U.S News’ Best Nursing Homes ratings and also find information on Medicare- and Medicaid-certified nursing homes on Medicare.gov.
For people with Alzheimer’s disease, other types of dementia or serious memory problems, memory care communities come with an extra level of care and supervision. Memory care offers a safe, structured environment with more gentle sensory stimulation that people with dementia can benefit from.
Tehrani describes memory care communities as being like assisted living, but they are secured for patients with dementia who are at risk for wandering. Someone who has gotten lost in the past or who is at high risk of wandering out of a facility and getting lost may benefit from moving to a secured memory care unit.
These units are located within many nursing homes and assisted living communities. Staff members receive special training to provide 24-hour care and daily assistance to this group of residents.
“Some individuals do extremely well in memory care,” Avitabile says. “And then for some, it doesn’t work at all. There’s always that trial period.”
In nursing homes, memory care usually goes by a different name, such as the Alzheimer’s unit. The atmosphere can differ by type of facility.
“In general, a memory care unit attempts to be kind of more normalizing – a little bit more humanistic and kind of person-centered,” Avitabile says. “It doesn’t have that institutionalized feeling.”
The terms “nursing home” and “skilled nursing facility” are often used interchangeably because the types of care involved often overlap. However, they aren’t identical.
Skilled nursing facilities, or SNFs, are more likely to have a consistent presence of nurses or physicians and offer rehabilitation services, such as occupational, physical and speech therapy. SNFs and nursing homes also fall under different sets of regulations.
An individual who truly qualifies for SNF care “needs a lot of assistance,” Avitabile says. “Typically, (they require) the assistance of two individuals to move them. Typically, they’re bedbound, and they have other skilled care needs.”
For example, she says, an SNF resident might have a disability or require chronic medical care, such as dialysis or a tracheostomy tube.
Determining Long-Term Care Levels
Determining the level of care that’s best for your loved one is an important first step in selecting the right long-term care facility. These needs aren’t static either; over time, a senior may develop mobility issues, such as difficulty transferring in and out of bed, or need help with gradually worsening chronic conditions or disabilities, such as chronic obstructive pulmonary disease.
The good news is that long-term care decisions seldom involve a sudden crisis followed by a parent’s dramatic uprooting to a supervised facility.
“It’s usually not ‘Mom’s fine,’ and then the next day she needs to go to a nursing home,” Markwood says. “It’s a continuum.”
Complex Decision-Making With Long-Term Care
Figuring out which is the right facility for your loved one can be a complicated, multifactorial process. A key area of concern is how to pay for long-term care. This can be a major limiting factor in long-term care choices. For example, for many families, assisted living facilities and CCRCs are prohibitively expensive.
What’s more, the senior care industry is constantly changing. The COVID-19 pandemic, for instance, brought major changes to long-term care and put pressure on some communities’ ability to retain enough staff.
All of these challenges mean it’s important to ask lots of questions if you’re exploring potential facilities for a loved one.
Long-Term Care Costs
Planning for the rest of your life can be challenging, but the sooner you start, the better off you’ll be later. Costs for senior care are only increasing, and a growing number of Americans need it.
“People underestimate the cost, and they underestimate the amount of time they may need services,” Markwood says.
The cost of senior care varies widely depending on the type and level of care needed as well as the location of the facilities. According to Genworth’s 2021 Cost of Care Survey (the most recent data available), the median monthly cost for an assisted living community is $4,500 – totaling $54,000 annually, up from $28,800 in 2004.
A private room in a nursing home facility is more expensive, clocking in at $9,034 per month, adding up to more than $108,400 per year. Prices can vary widely depending on where in the country the community is located and which services a senior is using. For example, the median monthly cost of homemaker services in the state of California is $6,101. But in Oklahoma, the median cost is $4,862. In a nursing home facility, a private room in California costs $12,167 per month but is about half that in Oklahoma, which has a median cost of $6,083.
Medicare
Many people incorrectly assume that Medicare, the federal health insurance program designed for adults age 65 and older, will cover the costs associated with long-term care, says Diane Omdahl, Wisconsin-based co-founder and president of 65 Incorporated and author of “Medicare for You: A Smart Person’s Guide.”
“Medicare does not cover long-term care,” she notes.
It can be a little confusing, though, because Medicare does cover some health care costs that a senior incurs while in a long-term care setting.
“Medicare pays for care that is considered skilled, not custodial care like assistance with activities of daily living,” Omdahl clarifies. “This misconception about Medicare’s coverage often leads to confusion among many seeking long-term care assistance.”
In short, Medicare provides coverage for up to 100 days of rehabilitation or convalescent care in a nursing home, but it doesn’t cover the cost of room and board fees and other services of long-term care. Medigap, long-term care insurance and employer-provided or private health insurance plans can help defray long-term care costs if plans are already in place before a major health event occurs.
Long-term care insurance
Because Medicare doesn’t cover long-term care, you’ll need to find other ways – such as long-term care insurance – to pay for those services.
Long-term care insurance is a specific kind of insurance policy that’s designed to provide funding for long-term care needs later in life. According to a report from the Congressional Research Service, as of January 1, 2020, about 7.5 million Americans had some form of long-term care insurance coverage.
Covered services can include assistance with activities of daily living and caregiver help in the insured’s private home, an assisted living facility, nursing home or other long-term care facility. These plans can be structured as stand-alone policies sold by private insurance companies directly to consumers or to employer-sponsored groups. Some Medicare Advantage plans, which are also offered by private insurers, may include some long-term care coverage for services like meal deliveries and transportation to medical appointments.
There are a slew of options and benefits you can select when buying a long-term care insurance policy, so be sure to work with an experienced broker or adviser. These experts can help guide you on the complexities of these plans to help you determine what the best option is for your anticipated situation.
If you have long-term care insurance, make sure your family is aware of this and has access to your policy information. Markwood says she’s heard of families not realizing a parent had this coverage until after the person died.
How to pay for long-term care without insurance
If you don’t have long-term care insurance, you’ll need to pay the vast majority of fees associated with long-term care out of pocket, and it can get expensive. Selling off assets and using retirement funds is one way to cover some of those costs.
Omdahl recommends exploring the range of financial alternatives that may be available to you, such as annuities and Medicare Advantage plans.
Medicaid, a joint federal and state health insurance program designed for low-income individuals, may also kick in after a senior has “spent down” their assets. That often means the senior must sell their home and use those funds first before Medicaid kicks in. There are plenty of constraints and restrictions around what Medicaid covers, however, and because the program is administered at the state level, there can be wide variation in benefits depending on where you live.
That means you’ll need to do some research to learn what to expect and get some help sifting through your options. For personalized guidance on planning for long-term care, Omdahl offers the following suggested steps:
- Learn about the available long-term care options in your community.
- Work with a trusted financial advisor to develop a tailored plan.
- Explore community resources.
- Incorporate your specific wishes into the plan.
Starting this process early can take a lot of pressure off later.
“Taking proactive steps to plan for long-term care needs and not relying solely on Medicare is essential for securing financial stability and peace of mind in the future,” Omdahl notes.
Markwood also recommends including adult children and significant others in the decision-making process when it comes to figuring out how to pay for long term care.
Bottom Line
Selecting the right long-term care option for your loved one can be a complex and sometimes challenging endeavor. There are many factors to consider, including how to pay for long-term care and the level of care needed.
“Make sure you do your homework, and visit several locations so you can have a better understanding of which facility will be a good fit,” Tehrani advises. “Ask the staff questions, and it’s not a bad idea to ask other residents what they feel about the facility as well.”
The Eldercare Locator offered by the U.S. Administration on Aging can help you start the search for facilities in your area, as can U.S. News’ Best Senior Living Communities. Markwood notes that local services can extend the interval an aging adult is able to manage at home.
“Look up your Area Agency on Aging, and find the plethora of resources that are out there in your community,” she advises.
The U.S. News Health team delivers accurate information about health, nutrition and fitness, as well as in-depth medical condition guides. All of our stories rely on multiple, independent sources and experts in the field, such as medical doctors and licensed nutritionists. To learn more about how we keep our content accurate and trustworthy, read our editorial guidelines.
Avitabile is the owner of Urban Eldercare, a geriatric care management practice in New York City, and a past president of the Aging Life Care Association. She is based in New York.
Hashmi is the endowed chair of geriatric innovation and section chief at the Cleveland Clinic’s Center for Geriatric Medicine.
Markwood is the CEO of USAging based in Washington, D.C.
Omdahl is the president and co-founder of the Medicare consulting firm 65 Incorporated and author of “Medicare for You: A Smart Person’s Guide.” She is based in Wisconsin.
Tehrani is a geriatric physician and founder and CEO of MedWell Medical in Long Beach, California.
