Assisted Living’s Hidden Fees

Marie Sinclair thought it was a perk of her residency at an assisted-living center in Fairfax, Va., when she was offered a van ride to her doctor’s appointment. Then she got her monthly bill, which showed a special transportation charge of $65.

“I just couldn’t believe it when I saw the bill,” said Sinclair, 78. “I thought they were being nice by giving me a ride to the doctor. Nobody told me they charge extra for something like this.”

Sinclair now asks friends or one of her bridge partners for a ride when she needs to go to the grocery store or doctor. She can’t afford many extra charges on top of the hefty $3,680 per month she pays for her apartment and three meals daily. “I love free things,” she says, “but there sure aren’t many of them in here.”

Like many older Americans, Sinclair has learned one of the hard lessons of the world of assisted living. Much like a fancy restaurant that charges separately for the main course and every side dish, the assisted-living industry is marked by a-la-carte services.

It’s important for older people and their families to understand the potential financial pitfalls when mulling a move to an assisted-living facility. The process of relocating Mom or Dad from a well-loved home to unfamiliar surroundings is fraught with emotion, and family members can be at their most vulnerable.

Assisted living is a catch-all term for housing units established for people who aren’t able to maintain themselves in their home or apartment. But these individuals are relatively healthy and don’t need special, round-the-clock skilled medical care offered in a nursing home. This increasingly popular form of housing goes by dozens of names: extended care, adult-care residency and board-and-care. In California, they are officially known as “residential care facilities for the elderly,” and are regulated by the California Department of Social Services. Some high-end facilities have glossy brochures showing elegant lobbies, fancy furniture and often a photo of a sincere-looking admissions director. Forget all that unless you have an unlimited budget. Concentrate on the details of the contract, paying special attention to any “extra” needs that the resident might require. The first rule is, if it’s not offered in the contract, you probably won’t get it. Don’t count on vague statements by facility managers who promise to take care of all your mother’s needs if her health begins to deteriorate. You need to know every specific service they can provide--and how much each task will cost.

Too often, consumers don’t know what they are signing. A 1999 report by the General Accounting Office, the investigative arm of Congress, said, “marketing material, contracts, and other written material provided by the facilities are often incomplete and are sometimes vague or misleading [and] only 25% of facilities routinely provide their document to prospective residents before they decide to apply for admission.” Contract terms vary widely, and there are lots of potential pitfalls. Security deposits and cleaning deposits are not permitted under California state regulations, but some facilities have been known to request them.

Pre-admission charges, or screening fees, for new residents are legal, but they are also a tip-off that consumers should be aware and skeptical. Most facilities don’t charge such fees, which can range from hundreds to thousands of dollars. In fact, one study of California facilities found that only 29% had such fees. They provide nothing other than an additional source of revenue for the facility.

California has 6,200 facilities with a total of 147,000 residents. The basic fees at a typical facility in California range from $1,500 to $2,250 a month, according to a report by California Advocates for Nursing Reform, a consumer group. Less expensive facilities charge about $800 a month, and they are largely for people on Supplemental Security Income, a federal program for the poor elderly. Fancier assisted-living facilities may charge $4,000 a month or more for basic room and board.

For all facilities, regardless of size and amenities, prospective consumers should ask lots of questions to minimize unexpected fees. The Consumer Consortium on Assisted Living developed a guidebook with Metropolitan Life Insurance that suggested some questions families should ask:

* Does housekeeping include only light dusting, and is there any extra charge for cleaning bathrooms, floors and windows? Is there a separate fee for doing personal laundry?

* Do units have separate telephones and how is billing handled?

* Are monthly residence and fees still charged if a person is away in the hospital, or on an extended visit with relatives?

The issue is especially important for the growing number of residents who need more care than an occasional knock on their apartment door or reminders to take their medications.

Anita Parks, of Richmond, Calif., moved her mother, Deloris Parks, into a facility in Oakland at a base cost of $1,390 a month. Deloris, who suffers from arthritis and emphysema, uses an oxygen tank and needs assistance bathing and getting dressed. Those services cost an additional $250 a month under a complex system the facility uses to rate the degree of assistance provided by its staff. Within a few months, the extra charges jumped to $500 a month, when the rating system was changed without advance notification, according to Anita. Later, she was told her mother needed a higher level of assistance that would cost more than $800 a month. She now needed help getting in and out of bed each day, and that would drive up her rating.

Anita was flabbergasted. “My mother said one of the aides helped her in and out of bed for a few days when she wasn’t feeling well,” she recalled. “My mother thought he just volunteered to help her.”

Anita couldn’t afford the higher fees and moved her mother to a more affordable small group home in Cameron Park that didn’t have as many extra fees. The new location is a 210-mile round-trip from her home in Richmond, which means she can visit her mother only every week or 10 days. Anita Parks complained to California lawmakers and testified recently at a legislative hearing. There is legislation pending to require facilities to give 60-day notice--the current rule is 30-day notice--before any increase in basic rates.

Like the Parkses, most residents of assisted-living centers and their families pay out of pocket. Medicare doesn’t cover any of the costs, and relatively few people have purchased long-term care insurance to cover the exigencies of old age. Confusion among consumers because of the extra and unexpected charges has been a major problem, acknowledges the California Assisted Living Facilities Assn., an industry group that has developed a consumer disclosure statement.

For more information, contact the California Assisted Living Facilities Assn. ([916] 448-1900 or www.calfa.org). Another source is the California Advocates for Nursing Home Reform ([800] 474-1116 or www.canhr.org).

For helping in finding an assisted-living facility, contact the Consumer Consortium on Assisted Living ([703] 533-8121 or www.ccal.org). The California Department of Social Services keeps inspection records on individual facilities (Los Angeles County, [310] 568-1807; Orange County, [714] 703-2840).

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Dollars & Sense appears the fourth Monday of the month. Bob Rosenblatt can be contacted by e-mail at bobblatt@aol.com.