If you think haggling over the contract for a new car is stressful, imagine signing a contract that determines how much you'll pay for your loved one to receive specific caregiving services. You'll definitely want to go into the contract phase of entering assisted living with a clear idea of what you want and what you can expect.
Many assisted living residences are for-profit businesses, and even nonprofits need to delegate their resources carefully. What this means to you or your loved one is that every service requested on top of the basic package included in the base monthly housing payment will have a cost attached. Some facilities may include laundry and meals in the base rate, and others may not.
Contracts tend to fall into three categories:
- Extensive. This type of contract agreement includes a fixed monthly rate for unlimited lifetime assisted care. Since the payments will be higher up front, it's a more expensive option right out of the gate. As time passes and care needs increase (as they often will, due to declining health), that fixed monthly rate will become a better and better deal.
- Modified. This contract also has a fixed rate, but it's only good for a set length of time. This means you'll pay less per month than you would with an extensive contract, but that when you or your loved one outlives the contract, a new (and more expensive) contract will need to be established.
- Fee-for-service. This third type of contract works exactly like it sounds: The resident pays by the day and for each individual service. There is no protection or provision that accounts for rising health care costs or needs -- when the resident needs more, the resident will have to dig deeper into his or her pocket. However, because future costs aren't figured into the contract, this is the most affordable contract in the short term. Also, assisted living isn't as expensive as a full-care nursing home that provides 24-hour nursing and observation. A person who just needs to be in a safe environment and needs only a little help could pay as little as $60 a day [source: Medicare]. That comes to about $12,000 a year, compared to around $50,000 a year on average for nursing home care [source: AARP].