As our loved ones near the stage of their lives where they may need long term care, it is important to be educated on how you can ensure they will receive the care they need without putting yourself or your loved ones in financial distress.
In an article by SeniorsMatter.com, payment options and how assisted living facilities are priced are outlined. The payment plans emphasized and pricing explanation in this piece are as follows:
- Flat-Fee Arrangement – This is where an assisted living facility charges an arranged flat fee every month no matter which services your loved one needs. The advantages are that it is stable and predictable, and it is easier to budget into monthly expenses. The disadvantage, however, is that if your loved one does not need very many services, you are probably going to over pay for their care.
- Fee-for-Service – How this payment option works is that a flat fee is charged each month for meals and rent and additional charges are made based on the services your loved one received that month. This payment option allows you to only pay for what you get, but at the same time, it is extremely unpredictable and can be extremely expensive depending on how much care your loved one needs.
- Hybrid Pricing – This payment option combines the Flat-Fee Arrangement and the Fee-for-Service options. The person needing care is evaluated based on their needs and put into a tier that has a flat rate. This way, fees are more predictable and you are paying only for what you get.
- Additional costs – Extra fees can always effect how much you pay for your loved one’s care, for example, some assisted living facilities charge an entrance fee.
You should also take into consideration on how these expenses will be paid. Long Term Care Insurance is a great option to protect your assets and pay for needed care within your means. Today, assisted living facilities are covered under most long term care policies. So, no matter what pricing model a facility uses, care can most likely be paid for from said insurance policy.
However, it is not only important to educate yourself on how assisted living facilities are priced, but it is critical to educate yourself on all of the long term care options that are available for your loved one. For example, many people do not know that the majority of care received today is either in private homes or assisted living facilities, not nursing homes.
Nevertheless, since there is no option that is better than the other for every situation, educating yourself on long term care is crucial, because the option that suits you and your loved one best depends on your individual situation.