Last month, the MetLife Mature Market Institute released their 2008 survey of nursing home and assisted living costs. As to be expected, rates increased since last year’s publication. The national average rate for an assisted living facility increased by 2.1% since 2007, bringing the monthly fees from $2,961 to $3,031 and the annual cost from $35,628 to $36,372.

A new feature of the 2008 report is the grouping of assisted living communities based on the number of services included in the base rate, which can vary greatly by community and thereby dramatically effect the overall cost of long-term care.

Most assisted living facilities are regulated at the state level; therefore, when crossing state lines, no two assisted living facilities operate equally. Even the basic definition of assisted living, a care setting that currently more than 900,000 Americans call home, varies greatly from state to state, which also contributes to the variances in costs. However, most assisted living communities advertise “a home-like setting” with assistance provided as needed, as opposed the 24-7 care provided in nursing homes.

Exactly how many standard services are included in the base rate also varies, and, as they age in place, many assisted living consumers will need several supplemental services. These additional services are often charged “a la carte” and can dramatically alter the grand total on the monthly bill.

There is yet another dimension to the already complicated base rate breakdown: charges for assistance with Activities of Daily Living (ADLs) and Instrumental Activities of Daily Living (IADLs). ADLs (bathing, dressing, toileting) and IADLs (medication management) can also drastically alter a consumer’s monthly charge, and each community has their own formula for how they calculate these charges.

Finally, if your loved one needs the specialized services offered in an Alzheimer’s wing (provided by 52% of the assisted living facilities surveyed in the report), be prepared to pay. The average base rate for Alzheimer’s and dementia care is $4,267 monthly and $51,204 annually, according to the report’s findings.

Assisted living is an actively evolving market. Baby boomers are aging, state regulations are changing, communities are adapting to provide more specialized services — and we all know that the current economy is unstable, to say the least. All of these factors will impact the bottom line and therefore impact the consumer’s ability to afford this category of care both now and in the future.

Cost analysis aside, choosing the right long-term care setting for a loved one is not an easy task. Just as a prospective home buyer must weigh all the options, pros and cons (hidden costs, taxes, maintenance, etc.), prospective assisted living consumers must do the same. Ask yourself: What is most important to you? For some, aesthetics may be more important than the staff-to-resident ratio. For others who may have more complex care needs, the staff-to-resident ratio will likely be a higher priority than whether there are manicured lawns and walking paths.

Regardless of how you assess your priorities in choosing an assisted living facility to call home, you must choose wisely. Though the data fluctuates by state, the report clearly indicates that life in assisted living communities, regardless of where they are located and how many ancillary services they provide, is expensive.

Be a smart shopper: Weigh all the potential future care needs (the base rate plus the cost of a la carte services), tour many facilities, spend time talking to the staff, eat a meal in the dining room, visit the facility on a weekend or in the evening (most facilities are well-staffed during the day, but a good quality indicator is how well-staffed they are during off-peak hours), do the research, read all the fine print, and ask lots of questions. Your final decision will significantly impact your finances and your family member, and this decision must not be rushed or taken lightly.

Find out more about assisted living options.

- Michelle Seitzer