The Ripple Effect of the Economy on LTC

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nursing home

A recent Kaiser Health News article illuminated the Catch 22 seniors are in – wanting to sell their home to be able to afford assisted living and of course not being able to because the market is in the tank.

According to Kaiser, experts say thousands of seniors remain unable to move into senior housing because they can’t sell their homes quickly enough or for the price they need.

And that adds to caregiver pressure to either fund that care or take mom or dad into their homes. Not ideal situations in either case. Just ask my sister. Mom just moved in with her after a series of hospital and rehabilitation stints. Mom had no real estate to sell but has money in the bank, which she does not want to part with to pay an assisted living. That too is generational because the WW2 seniors feel some obligation to leave money to their kids. Despite our assurances that we don’t want or need it. (Maybe speaking personally here.)

People are therefore also entering assisted living at an older age and needing more acute services. And frankly many assisted living residents might be better off in a nursing home.

Kaiser reports that nationally, the occupancy rate for CCRCs fell from 94.4 percent in the first quarter of 2007 to 89.5 percent in the first quarter of this year, according to the National Investment Center for the Seniors Housing & Care Industry (NIC), a senior housing trade group. Meanwhile, occupancy rates for assisted-living facilities fell from 90.6 percent to 88.4 percent, and for independent-living facilities from 92.7 percent to 87.7 percent.

Interesting Solutions

So some enterprising providers are feeling compelled to enter the real estate business in a manner of speaking. Some facilities are buying people’s houses, freezing prices and offering move-in discounts.

Others are encouraging some seniors to share their living units.

Other CCRCs are letting people move if they promise that they’ll pay the entrance fees once their houses sell.

Since 2008, Brookdale Senior Living has signed contracts with seniors promising to buy their houses at a pre-determined price, based on an independent appraisal, within eight months, if they can’t sell them. Brookdale has entered into about 400 of these deals, but has had to buy fewer than 100 homes, most of which have been resold.

Another contributing factor and consequence is that seniors have a hard time grasping the depleted market value of their homes. And when they do and finally sell, they often buy into living arrangements that may not be best suited to their medical and other needs. In Florida alone it is estimated there are 400,000 seniors with dementia living on their own at home, with few or no services.

Nursing Home Impact

The housing slump also is affecting seniors who own a home and need to move into a nursing home. That’s because states require single seniors to exhaust nearly all their assets, including their home equity, to qualify for Medicaid. Federal Medicaid rules allow states to exempt the home from consideration in the financial eligibility test if the family is making a good-faith effort to sell, but not all states do. Depending on which state they live in, these seniors may not qualify for Medicaid if they can’t sell the home.

So you have read some of the interesting solutions. What are you doing to offset the slumping recovery and attract new residents?

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Source: Kaiser Health News

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