How to evaluate care facility costs — what's included and what's extra
This article is for educational purposes only and does not constitute medical, legal, or financial advice. Every family situation is different, and you should consult with appropriate professionals about your specific circumstances.
You call a facility and ask what they charge. They tell you a number. You write it down. And then you start asking questions about what that number actually includes, and it becomes clear that the number you were given is not actually what you're going to pay. What you were given is the base rate. Everything else—the things your parent will actually need—is going to be additional.
This is not necessarily dishonest. Some facilities are genuinely trying to give you the base rate because that's what you asked for. Some facilities are using the base rate as a hook because it sounds more reasonable than the actual all-in cost. Either way, you can't make a decision based on the base rate alone. You have to understand what the actual cost is going to be.
The problem is that there's no standard definition of what a "base rate" includes. Facility A includes meals and activities in their base rate. Facility B charges extra for activities. Facility C includes medication management and assistance with personal care. Facility D charges for anything beyond the most basic supervision. You can't compare the base rates without understanding what's included.
My brother went through this when looking for a memory care facility for our mother. He got quotes from three facilities. All three told him the monthly rate. All three numbers looked reasonably comparable. Then he asked what was included. Facility One included medication management, activities, and meals. Their rate was $6,200. Facility Two included meals and basic supervision, but medication management was extra, activities were extra, and they charged extra for significant behavioral support. Their base rate was $5,400, but the add-ons brought the real cost to around $7,200. Facility Three had the lowest base rate at $4,900, but as soon as you asked about any care support beyond providing a room and meals, the price went up dramatically. He realized you can't compare numbers without understanding what's behind them.
Here's how to do this right.
Understanding What's in the Base Rate
When you call a facility, you need a list of questions to ask, and you need to ask every facility the same questions in the same order so you can actually compare the answers.
Start with the base rate. What is the monthly cost for a room at this facility? Then specify: what type of room are you quoting for,semi-private or private? Semi-private is usually cheaper, but you should understand what you're paying for.
Then ask: What is included in the base rate? Get them to be specific. Does it include meals? All meals or some meals? Does it include snacks? Does it include beverages? Does it include activities programming? Does it include basic supervision and safety checks? Does it include housekeeping? Does it include laundry? Does it include utilities? Some facilities include almost everything. Some facilities include just a bed and a meal.
Does the base rate include help with activities of daily living? This is important. Activities of daily living,called ADLs in healthcare language,are eating, bathing, dressing, toileting, and mobility. If your parent needs help with any of these, is that included in the base rate or is it extra?
Does medication management come with the base rate? Someone has to make sure your parent takes medications correctly. In some facilities that's included. In others it's an add-on service.
Does transportation come with the base rate? Can your parent get to medical appointments? Is transportation included or is it an additional charge?
Get this information in writing. Ask them to email you or mail you their rate sheet. Don't rely on what someone told you over the phone. Prices change, people make mistakes, and you need to have documentation.
Understanding the Add-Ons
Now ask about the things that are definitely not included and what they cost.
What is the charge for help with activities of daily living if it's not included in the base rate? Usually this is priced as additional hours of care, so you might pay extra if your parent needs help bathing or toileting beyond what's included. How much does an hour of assistance cost? How much for two hours?
What is the charge for specialized care services? If your parent has dementia and needs specialized behavioral support or dementia care programming, does that cost extra? Behavioral support during an episode where someone is agitated or combative might be billed separately.
What is the charge for medications that are not covered by insurance? The facility doesn't usually charge for administering medications that insurance covers, but what about medications for things like pain management or advanced symptom management? Specialty medications can be expensive.
What is the charge for incontinence supplies? If your parent is incontinent, the facility is going to use incontinence products. Are those included in the base rate or do you pay separately? This can add up quickly.
What is the charge for personal care items? Hair care, nail care, grooming. Some facilities include basic things. Some charge for anything beyond the most basic.
What is the charge for medical visits and treatments? If your parent needs to see a doctor at the facility, is there a visit charge? If your parent needs wound care or therapy, is there a charge?
What is the charge for dental work, eye care, or hearing aid services? Some facilities have specialists who come in. Some you have to arrange externally.
What is the charge if your parent needs more intensive monitoring or care? If your parent's condition changes and they need more help, is there a charge? Is there a threshold,like you pay extra if they need more than three hours of care per day?
What is the charge for a private room versus semi-private? Usually private rooms cost more.
What is the charge for a unit or floor with higher acuity care? Some facilities have different pricing for different levels of care.
What are the terms for rate increases? Almost every facility increases rates annually. By how much? What's the typical increase? How are increases applied?
Making the Comparison
After you've asked all of this, you should have a clear picture of what the base rate is and what the likely add-ons are going to be for your parent's specific situation.
If your parent is fairly independent and just needs a safe place to live with meals and supervision, the add-ons might be minimal. The base rate is probably close to what you'll actually pay. If your parent needs significant care assistance, has memory issues that require specialized support, and has multiple medical conditions, the add-ons could be substantial. The base rate might be $5,000 but the actual cost could be $7,000 or $8,000 or more.
Now you can compare facilities. You're not comparing base rates. You're comparing what you would likely actually pay for your parent's specific situation.
Create a spreadsheet if you need to. Facility name, base rate, add-ons for your parent's needs, total monthly cost, total annual cost. That gives you an apples-to-apples comparison.
You're looking for a facility that is honest about its costs and charges, not one that tries to bait you with a low base rate and then surprise you with charges. You're looking for a facility where the services your parent needs are either included or reasonably priced.
You're also looking at the bigger picture. Is this a facility that's financially stable, or is it a facility that's charging aggressively because it needs to stay afloat? Is this a facility where staff turnover is high, which might explain why the costs are lower? Is this a facility that invests in training and programming, which might explain why the costs are higher?
Cost is important, and you can't ignore it. But the cheapest option isn't always the best choice, and sometimes paying a bit more for a better-run facility is actually the better financial decision because you're not constantly dealing with problems or having to move your parent.
Questions About Financial Assistance
Even after you've calculated what a facility is going to cost, ask about financial assistance. Is there a scholarship program or financial hardship fund? Do they offer reduced rates for long-term residents? Do they ever negotiate on price? Do they accept Medicaid, and if so, is there a different rate structure for Medicaid residents?
Some facilities have programs where you can pay for several years upfront and get a discount on the monthly rate. Some have programs where you can pay a one-time entrance fee and then have a lower monthly rate. These might make sense if you have a lump sum of money available.
Ask if they work with elder law attorneys or financial planners to help families figure out how to pay for care. Some facilities do. Some don't care as long as you pay.
Get the policies in writing about what happens if you can't pay. If your parent runs out of money, what happens? Can they stay while you apply for Medicaid? Do they transfer to a less expensive unit? Do they discharge your parent? You need to know the answer to this question before you sign an agreement.
Getting Real About Affordability
After you've done all this research, you know what facilities cost. Now you have to make a decision about what you can actually afford.
If you have more options than you can afford, you're choosing between them based on quality and fit for your parent. That's a decent position to be in. If you have fewer options than you need,meaning there are no facilities in your area that you can afford,you need to look at other options: home care, family care, moving to a different area, or serious Medicaid planning if that's not already done.
The uncomfortable truth is that most facilities are designed for people who can either pay privately or who qualify for Medicaid. There's not much in the middle for people with moderate assets. If your parent has $200,000 and needs care that costs $6,000 a month, the math doesn't work for more than about three years. You need a plan for what happens after that. Some families plan to use private pay for two years, apply for Medicaid in year three, and then transition to a Medicaid-accepting facility. That plan only works if you start thinking about it in year one.
Some families decide they're going to sell their parent's home to fund care, but if the home is only worth $250,000, that's four years of care at $6,000 a month. You need to know that math going in.
Some families determine that their parent's modest assets will supplement Medicare and family contribution, and they're realistic that a facility isn't going to be as nice as they might want. They choose basic but safe and well-run over fancy but out of reach financially.
Some families realize they cannot afford facility care at all and make different choices: home care with family support, a family member moving in to share caregiving, relocating to an area with lower costs. These are all legitimate choices. What matters is making them deliberately rather than arriving at them in crisis.
Acting on Your Information
Getting clear on costs, understanding what's really included, comparing facilities honestly, and planning for financial sustainability,this is the unglamorous work of figuring out where your parent can actually get good care.
Once you have your spreadsheet with real numbers for real facilities, sit with it for a day. Let the information settle. Then have a conversation with your parent, if they're able to participate, about what they actually value and what's realistic. Do they care more about having a private room or having the best facility available? Would they prefer to spend down their savings on a nicer place, or preserve assets and accept a more basic option? These questions matter and your parent's preferences should inform your decision if at all possible.
Then talk with your siblings if there are any, and with whoever else is involved in decision-making. Make sure you're all working with the same information and the same understanding of what's realistic financially.
If the gap between what you can afford and what you think your parent needs is significant, talk to an elder law attorney or financial advisor. Sometimes there are strategies you haven't thought of, or programs your parent qualifies for that you didn't know about.
Do it before you're in crisis, and you'll have options. Wait until crisis hits, and you'll take whatever's available and hope it works out. You'll be paying premium rates for places you haven't really evaluated, you'll be making decisions in a panic, and you'll spend the next several years wondering if you made the right choice.
How To Help Your Elders is an educational resource. We do not provide medical, legal, or financial advice. The information in this article is general in nature and may not apply to your specific situation. If you are concerned about a loved one's cognitive health or safety, consult with their healthcare provider or contact your local Area Agency on Aging for guidance and support.