There are more than 100 senior living community options in the state of New York, yet only 11 offer Life care for their residents. Life care is a type of long-term care insurance offered in New York to help seniors age in place with financial protection against long term private pay costs. Wanting to be a resource to the surrounding community, Michelle Gramoglia, executive director for Woodland Pond, has advice and information to share.
“Life care guarantees a predictable cost of long-term care for life in exchange for a fixed upfront fee and a lower monthly fee,” said Michelle Gramoglia, executive director of Woodland Pond at New Paltz. “In the communities where it is offered, it is an optional component of a residential contract. Here at Woodland Pond, more than 90 percent of all residents opt for the protection of Life care. By doing so, the residents have paid an average of $60,000 per person to ensure that as they age in place and require care in either assisted living (including memory care) or skilled nursing, their cost of care will remain low and will be completely predictable for life.”
Life care is essentially a long-term care insurance policy, and in New York, communities that offer this type of contract are regulated by the New York State Department of Financial Services (NYS DFS) as if they were any other type of fully licensed insurance company. According to a report conducted by the United States Government Accountability Office, a growing population of older Americans is seeking options to ensure that their assets and income in retirement will cover the cost of their housing and health care needs. Wishing to give residents the comfort of aging in place, with predictability in costs for retirement, the Life care concept gives families and residents peace of mind that they will be taken care of as their health care needs change over time.
According to the American Seniors Housing Association, CCRCs offer an alternative lifestyle option for older adults and are especially attractive to seniors making decisions for their long-term care future. They allow seniors to convert home equity or other assets into housing and to receive daily living services and health care in a way that keeps monthly expenditures more stable. Life care contracts include unlimited enriched housing/assisted living care (if offered by the community) and unlimited skilled nursing facility services, along with independent housing and residential services and amenities. The resident's monthly fee cannot change due to a change in the level of covered health care required by the resident (except for normal operating costs and inflation adjustment). This means that the resident pays the same monthly fee in the skilled nursing facility as he or she paid in independent living. Many CCRCs/FFSCCRCs offer contracts which refund a specific percentage of the entrance fee regardless of the length of residency. (For example, 90 percent or 50 percent refundable contracts are currently offered in several communities). The refund is paid to the resident or the resident's estate if the contract is terminated or upon the resident’s death.
“When compared to traditional long-term care policies, Life care at our community saves residents a substantial amount of money,” said Gramoglia. “On average, if a female enters a senior living community at the age of 70, she will live another 17 years. For men, that average is another 13.7 years. With a normal policy, if a couple were to enter together, they would pay $10,000 per person per year. With Life care, the couple is looking at paying $120,000 combined for both people. The upfront fee is 100 percent tax deductible for most New York State residents, and the Life care option makes 20 percent of monthly service (maintenance) fees additionally tax deductible each and every year of residency.”
At Woodland Pond, for 2015, the average monthly cost of care for a Life care resident is less than $4,000 per month, while those not opting for the protection of Life care are paying between $4,860 and more than $14,500 per month. At a savings of between just under $1,000 per month and $10,000 a month, Life care pays for itself quickly. It also provides the peace of mind that the care is there, at a cost far below market rates, when a resident needs it. It guards residents from additional costs due to unexpected changes in their health and ensures that they transition to the right level of care when they may need to.
“Another benefit is that if you are married to someone and you both move in and one person’s needs change drastically before their spouse’s, you’ll both get the level of care you need while living in the same community,” said Gramoglia. “For example, if the husband is diagnosed with Alzheimer’s and needs memory care, he does not need to transfer to a different campus specializing only in memory care to have his needs met. We have couples needing varying levels of care that are currently living at Woodland Pond who can testify to the ease of living at a CCRC. We welcome members of the public who are interested in learning more about Life care to our Lunch and Learn for the opportunity to talk to experts who can address their questions.”