RAL stands for Residential Assisted Living Physical or mental deficiencies, as well as aging, will affect us all in some way. This means that we will probably need some kind of assistance with our housing needs. These needs are often ignored until they cannot be. This subject is part of life and not sexy enough for Instagram or Tik Tok. Brace yourself; this is reality.
Residential Assisted Living is a broad term that can include various types of facilities. This article will describe:
- What types of facilities exist
- How do residents and families pay for these services?
- What is the opportunity to invest in one of these facilities?
This topic is also called an RCFE (Residential Care Facility for the Elderly)
The US government hasn’t created a comprehensive solution for these needs. You can argue that the country has done a very poor job of providing housing needs. Especially for senior citizens and people with mental or physical limitations. Individual families are responsible for creating solutions for those in need. There is an increasing need for these properties and services. The large “baby boomer” generation continues to age.
The opportunity exists for the private sector to fill these needs as well. Facility owners partner with agencies to create properties for these types of operations.
We cannot rely on the government to provide for our changing housing needs. We must look at the diminishing returns of our physical bodies. You will have to care for a parent as they become frail or a child as physical or mental limitations increase. There will be a good chance that you will need to enlist the services of professionals. They can manage the needs of your loved ones. The mental and financial burden on a family can outpace their capacity.
The main areas to consider when considering the needs of assisted living.
- Level of independence desired & the level of available professional services
- Cost of the services
People want to feel that they are in control of their lives. The amount of independence desired is the first important point in this discussion. If possible, many would like to “age in place.” My grandmother’s main wish was to stay in her home, her place of comfort and solace. She designed the house and raised her family in this home; it was the anchor of her life’s memories.
Aging in place is a wonderful idea. It can also be the most workable, provided the level of professional care is manageable. If family members have the time and emotional capacity to give care, there can be a high level of independence. Honoring a loved one is a very empathetic and beautiful thing to do for a person.
Providing care for family members is often the only choice for families without resources. The burden falls on the family support system. Forced empathy, if you will. You have heard the stories of the family caring for the person until they couldn’t anymore. They honor a person’s wish to age in place until they can no longer provide the level of care that was necessary. The person then goes to a state-sponsored facility or hospice for a short time before dying.
The fact is that our limitations will start to add up. A person’s home could become dangerous as our physical and mental limitations add up. A family’s capacity to care for loved ones has a limit too.
Board and Care Homes
Board and Care Homes are the next level above aging in place. These facilities usually have a small number of residents, 20 or less. Staff is present around the clock, but medical care is not on site. Residents share rooms or remain separate. These operations provide meals personal care to residents.
These facilities have a larger number of residents, 25+. There are also different levels of care.
- 24-hour monitoring
- Private & semi-private rooms
- Medicines administered
Also called skilled nursing facilities. These focus on medical care and can include
- Nursing care
- Therapy (physical, occupational, and speech)
Most people live in nursing homes full time. They have ongoing physical or mental conditions that need constant care.
Continuing Care Retirement Communities (CCRCs) are also called life care communities. They are a hybrid scenario with a variety of living choices.
- “Age in place”
- Independent living options “on and off-campus.”
- Healthcare services
- Higher level of care options, including nursing homes.
- Continuing Care Retirement Communities – Continuing care retirement communities
Summation of the different types of facilities
- Feels like home. There can be a high level of comfort compared to a large facility or hospital.
- Privacy. The rooms are private or semi-private.
- No yard work or maintenance. Owners of the facilities are responsible for maintaining the building and the surroundings.
- Relative affordability. Compared to larger facilities, costs are less at smaller facilities. This also depends on the level of service.
- Meals. Most facilities provide nutritious meals.
- Socialization. Residents often associate and become familiar with one another.
- Activities. Residents are give options to engage with things to do like exercise and hobbies.
- Lack of medical care. These facilities are not designed to provide skilled medical care. These services include injections, wound care, blood pressure, or temperature monitoring. If they offer these services, they are not usually 24/7.
- Cost. These amenities are usually not covered by insurance. The expense will go to the resident or the family.
- Lack of freedom. There will be requirements to fit into the schedules of the business.
- Risk of neglect. The level of care will vary. We only hear about the bad parts on the news, but there does seem to be this risk.
Now, how do we pay for this?
Cost is going to be the real issue. A person’s capacity to pay for these facilities will be THE driver for the quality of care. The ugly truth is that it comes out of pocket. As needs increase, people will need to pay for meals, transportation, and housing. If the money is not available, they will need to sell assets to pay for their assisted living expenses.
When does a person receive help from the government?
Medicare -Medicare is a Federal Government health insurance program that pays medical costs. This is for people aged 65 and older and all people with late-stage kidney failure. Medicare pays for medical costs for those with Social Security Disability Income (discussed later) for 24 months.
It does not cover:
- ongoing personal care at home
- Assisted living *unless you live in a state that offers a Home and Community-based Services (HCBS) Waiver that assists those with mental illnesses, intellectual disabilities, and physical disabilities. This waiver assists with skill development, respite, transportation, and other services to help support the individual and their caregiver.*
- long-term care
Here are brief descriptions of what Medicare will pay for:
- Medicare Part A: Hospital costs after you pay a certain amount
- Medicare Part B: Part of the costs for doctor’s services, outpatient care, and other medical services that Part A does not cover
- Medicare Part D: Some medication costs
Some people may qualify for Medicaid, a combined Federal and State program for low-income people and families.
Program of All-Inclusive Care for the Elderly (PACE)
Some States have PACE, a Program of All-Inclusive Care for the Elderly. This is a Medicare program that provides care and services to people. They are people who otherwise would need care in a nursing home
State Health Insurance Assistance Program (SHIP)
SHIP, the State Health Insurance Assistance Program. This is a national program offered in each State. The program provides help to people and their families on Medicare
Department of Veterans Affairs
The US. The Department of Veterans Affairs (VA) may provide long-term care for some veterans.
Security Administration Programs Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)
These programs provide financial assistance to people with disabilities. SSDI is for people younger than age 65 who are disabled. This is according to the Social Security Administration’s definition
National Council on Aging (NCOA)
The National Council on Aging, a private group, has a free service called BenefitsCheckUp®. This service can help you find Federal and State benefit programs that may help your family.
Long-Term Care Insurance Long-term care insurance covers many types of long-term care. This care includes palliative and hospice care. The exact coverage depends on the type of policy you buy and what services are covered.
Reverse Mortgages for Seniors
A reverse mortgage is a special type of home loan. This lets a homeowner convert part of the ownership value in their home into cash.
You may enter into an annuity contract with an insurance company. This is to help pay for long-term care services. An insurance company exchanges a single payment for a series of regular payments. The agreement is for a specified period.
What is the opportunity to invest in an assisted living facility?
Some real estate investors buy residential homes. They usually have at least 4 bedrooms. Investors rent them to agencies that provide assisted living services. Agencies that deal in these services are sometimes called Home and Community-Based Services (HCBS).
These agencies offered medical services to people here. 2 nurses often live in the home and work 12-hour shifts each.
The benefit to the investors is many sources of income within one house. These are sometimes called “group homes.” There is usually very little turnover, and the rent is paid monthly.
This article has touched on many aspects of what is known as Residential Assisted Living. I hope that you have found this to be informative and valuable. The opportunity to learn about this topic before the actual necessity materializes will give you an advantage. of considering your options and the costs associated with the various options.