Paying for Senior Care: How Care Type Impacts Pricing

Cedarhurst Senior Living Paying for Senior Care: How Care Type Impacts Pricing

There are plenty of decisions to be made leading up to retirement, and determining how they affect a fixed-income budget is an important part of the decision-making process. When it comes to senior living, for example, most older adults and their family members are worried that they simply cannot afford it. 

The good news? Senior living is much more affordable than you might believe.


However, as with all major lifestyle decisions, it is wise to research senior living options and compare potential costs to your loved one’s current and future care needs. Not all senior living communities are priced the same, and not all communities offer the same type of care, services, and amenities. 

Determining what type of lifestyle your loved one is seeking can help you both discover how your options affect the budget bottom line. Empowering yourself to understand how care costs differ from community type to community type can help you better plan for the future while meeting your loved one’s financial goals.


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The Weight of Money Worries

If your loved one is anxious about their finances, they aren’t alone. The majority of older adults worry about outliving their money, even those with a well-padded nest egg. A recent report from AARP states that nearly half of all Americans worry they will not have enough money to sustain them during their retirement years.

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However, some troubling trends have also come to light over the past few years that can increase financial worries for seniors and their loved ones. For example, Forbes reports that senior debt is on the rise. Households led by people over the age of 65 that carry debt increased from 38 percent in 1989 to 61 percent in 2016. The amount owed on these debts also nearly tripled, from $7,500 to $31,000.

What does all this mean for you and your loved one? Being cautious and goal-oriented is a wise approach. However, the more you know about senior living costs, the more confident you will feel about making a decision. If your loved one is struggling with committing to searching for a senior living community because of their financial worries, empower them by talking candidly about senior living pricing.

How Care Impacts Senior Living Prices

It’s important to note that not all senior living costs the same. Just as all communities are unique, their fees are also different as well. Different factors impact senior living pricing, including: 

  • Location of the community
  • Size of the apartment
  • Type of care needed
  • Amenities offered on-site

Location of the Community

Monthly fees are affected by the location of the community, similar to real estate costs. You might find that some communities in rural areas are generally less expensive than those in a more expensive suburb or city. Also, certain neighborhoods or cities might naturally be more expensive due to real estate trends. These price increases often translate to senior living costs as well.

Size of the Apartment

Monthly fees are also affected by the type of apartment your loved one chooses. Just as larger homes often have a larger price tag, larger apartment floor plans can increase the monthly fee. Fortunately, exceptional senior living communities take into consideration the budgets of those they serve, often offering a variety of floor plans that can include studio and smaller one-bedroom choices to help keep down the monthly costs.

Type of Care Needed

Senior care needs can also increase the monthly fee at a community. This is especially true in assisted living, memory care, and skilled nursing communities. When you research senior living communities, inquire if they have a fee schedule for increased services or care. Then, speak candidly to your loved one’s physician to project what type of care your loved one needs now and could need in the future. This can help you with future financial planning.

On-Site Amenities

Finally, similar to all real estate purchases, senior living fees vary based on luxury amenities and services offered. However, money spent to live in a community that features easy access to transportation, housekeeping visits, and wellness resources on-site is a wise investment in your loved one’s well-being.

What’s Covered in Senior Living Monthly Fees

Generally speaking, senior living communities either ask for a large entrance fee payment or offer a simple month-to-month billing schedule. 

Entrance Fee Model

For example, life plan communities often require an “entrance fee,” which is a large sum that is often equivalent to real estate pricing in the area. Depending on the community and the contract, the entrance fee may decline or amortize over time, or there might be a guarantee of a certain percentage that is given back to your estate. In addition to the entrance fee, life plan communities also bill a monthly fee to cover services and amenities.

Rental Model

Many independent living, assisted living, memory care, and skilled nursing options do not have an entrance fee system. Instead, residents pay a monthly fee. For monthly payments, seniors can expect the fee to cover nearly every part of their home and lifestyle.

Monthly fees cover much more than a spacious, modern apartment. One monthly fee also usually covers: 

  • A comprehensive and delicious dining plan that includes chef-styled meals up to three times daily
  • A vibrant and diverse event calendar full of carefully planned trips and opportunities
  • Utilities and Wi-Fi
  • Housekeeping and laundry services
  • Access to transportation

If you aren’t quite sure what exactly the monthly fee covers at the senior living communities you are researching, ask. Team members are there to provide honest answers as you walk through your decision-making process. 

It can be helpful to take a moment to write down all the monthly bills that your loved one currently pays, and compare that lump sum to a monthly fee at a senior living community. Chances are, you will be surprised at how closely they align and how many more services your loved one will receive at a senior living community.

How to Offset the Costs of Senior Care

If you are looking to offset senior living costs for your loved one, there are a few opportunities you can explore. 


Start by reviewing any long-term care insurance policies that your loved one may have. Depending on the type of care they need and the type of policy they may hold, you could find some discounts there.

Veteran Benefits

If your loved one is a military veteran or the spouse of a veteran, there are Aid and Attendance benefits and a Housebound allowance that can offset assisted living costs for those who are eligible. You can talk to the senior living community or your loved one’s VA caseworker if you have more questions about this benefit.

Medicaid and Financial Planning

Finally, although Medicare does not cover assisted living costs, Medicaid can sometimes defer monthly costs to eligible seniors who choose eligible communities. Speaking with your loved one’s financial planner can also be quite helpful as you assess your loved one’s budget for current and future care.

Take the Next Steps to Afford Senior Care

If you or your loved one are nervous to even begin exploring senior living because you are worried about the costs of senior care, don’t let that anxiety stop you. While reviewing the financial responsibilities tied with senior living communities is an important part of the decision-making process, you can also feel a lot of relief when you realize that senior living might be more in line with your loved one’s budget than you originally believed. 

Learn more about assisted living communities and their pricing schedule by downloading our free resource, The Insider’s Guide to Understanding Assisted Living Pricing. The more information you have, the more empowered you will feel as you advocate for your loved one’s care and financial goals.

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