An agent recently asked us if we knew the difference between an Assisted Living Facility and a Nursing Home.
Initially we thought he was just testing us to see if we actually did know what we’re talking about, but then we realized it is a much deeper question that many agents need to be able to answer for their clients.
We concluded that the difference needs to be understood on three levels:
- the actual definition,
- the costs of care and
- the progression of disability that impacts the proper care setting
Definitions of LTC Facilities
We’ll start with the actual definitions of various facility settings, as defined by the California Department of Insurance:
Continuing Care Retirement Community or Life Care Community
A master planned, age restricted development that offers a variety of living arrangements and levels of services. The object of a Continuing Care Retirement Community (CCRC) is to allow residents to “age in place” by providing independent living, congregate living, assisted living, and skilled nursing care at a single location. Residents may move from one level to another as their needs change. Some CCRC’s are fully licensed, while others are only licensed as a RCFE to provide ambulatory and personal care. The skilled nursing component must be licensed by the State Department of Health to offer skilled nursing services.
When looking into this type of lifestyle, you must clarify the type of contract and care that is included in your agreement. There are very few “Life Care” communities due to the fact that these communities provide unlimited care for the rest of your life, even if you run out of funds. Continuing Care Retirement Communities offer a specified number of days per year of additional care only and may require the resident to relocate out of the community (i.e. to a separate nursing facility).
The contract for care in such communities is intended to remain in effect for more than one year, usually for the rest of one’s lifetime. These contracts represent the long term commitment to provide continuing care to the community resident. These contracts cover housing, services, and nursing care – usually in one location – coordinated or directly managed by a single administrator who is accountable to the community’s board of directors. Hospital care, medical service, and physician visits are rarely included, though the community may schedule appointments and provide transportation. Continuing care contracts often, although not always, require an entrance fee, accommodation fee, or endowment, plus monthly fees that cover, in advance, some or all services and care as a form of insurance for one’s later years.
Other communities allow one to pay for services as needed. At a minimum, the contract guarantees access to nursing care services if you should ever need this type of care; at a maximum, it covers the full cost of nursing care (usually in a life care contract).
Congregate Housing/Independent Living Community
Provides a residential environment with more shared common space and service supports than fully independent living facilities. While residents still live independently in their own apartments, congregate housing includes centralized dining services and such support services as transportation, social and recreational programs, and housekeeping.
These communities offer similar services as Assisted Living/Personal Care communities, but can be licensed by the State Department of Social Services, Community Care Licensing Division as Residential Care Facility for the Elderly (RCFE) or non-licensed offering limited services.
Assisted Living/Personal Care/Residential Care Facility (ALF/RCFEs)
This differs from congregate/independent living communities in that 24-hour supervision and assistance are provided for residents with minor medical problems or who need assistance with such things as bathing, grooming, dressing and meals. Most of these communities offer private, semi-private, or efficiency apartments with or without kitchenettes. They typically provide common living areas (Card/games/room, library, TV lounge, social activities and central dining room), housekeeping, linens (towels and sheets), from one to three meals, and transportation. Since these communities are licensed by State Department of Social Services, Community Care Licensing Division as Residential Facility for the Elderly (RCFE), they can also supervise and distribute medications to residents.
Assisted Living/Personal Care has several different customized terms that are used in the marketplace such as: Catered Living, Catered Care, helping hands and Independent Plus to name a few. When looking into this form of living arrangement, one must find out what services are included in this base fee, verses those that offer additional service based on the level of care needed. Assisted Living/Personal Care is either included with the monthly care fee or residents are charged according to the level of services used. The fees charged can be based on an hourly rate for different types of services, “a la carte”, or charged according to the level of care provided.
Any facility that is marketing itself as an Assisted Living, Personal Care Retirement Home, or Residential Care Facility, must be licensed by the State Department of Social Services in order to provide the levels of care and service.
In California, there are two (2) types of classifications for Residential Care Facilities:
1) Residential Care Facility for the Elderly (RCFE) means a housing arraignment chosen voluntarily by the residents, or the resident’s guardian, conservator or other responsible person; where 75 percent of the residents are at least sixty-two years of age, or if younger, have needs compatible with other residents as specified in section 87582; and where varying levels of care and supervision are provided, as agreed to at time of admission or as determined necessary as subsequent times of reappraisal.
2) Residential Care Facility for the Chronically Ill (RCF-CI) means a housing arrangement with a maximum capacity of 25 residents that provides a range of services to residents who have chronic, life-threatening illnesses.
In California, there tends to be some confusion between the term “Assisted Living” and/or “Residential Care” and according to California Association of Health Care Facilities (CAHF) the distinction can be as simple as:
- Assisted Living – Multi-unit facilities that provide assistance with medications and daily activities such as bathing and dressing.
- Residential Care – Usually single family homes licensed to provide assistance with medications, bathing and dressing.
Board and Care
This term originated through the Department of Social Services for Residential Care Facility for the Elderly (RCFE), and applies primarily to small converted single-family homes. Housing must be licensed and can provide “hands on” assistance, and is for individuals who are unable to live alone but do not warrant skilled nursing care. Board and Care Homes provide a more home-like atmosphere for residents to “age in place”.
They provide assistance with personal hygiene, grooming and bedside care during periods of minor or temporary illness. They may also provide some recreational and social activities.
Again, due to the ever changing landscape of facilities and services as well as terms and terminology, many facilities definitions overlap such as Board and Care. In California, they are classified as RCFEs and licensed as such. However, long-term care insurance policies may refer to them as Board & Care facilities depending on Insurance carrier and its contract.
Intermediate Care Facility (ICF)
This type of facility accepts individuals who are relatively independent but who may need assistance with bathing, dressing, getting out of bed, etc. ICF’s provide some nursing care but do not offer continual nursing services supervision. ICF’s are not licensed to accept incontinent or non-ambulatory patients because they provide a lower level of skilled nursing services then are required by such patients. ICF’s are usually lower in cost than skilled nursing facilities. Due to the narrow range of services they provide, there are very few ICF’s in California.
Skilled Nursing Facilities (SNF)
Skilled Nursing Facilities (SNF) are also referred to as nursing homes, and convalescent hospitals. SNF’s provide 24 hour nursing services under the supervision of a registered nurse or if under 59 beds a licensed vocational nurse. Basic skilled intermediate and custodial care, i.e. “activities of daily living” (bathing, dressing, eating, toileting) are usual care services.
A growing number of SNF’s are specializing in special care needs and offer sub-acute services previously reserved for acute hospitals. Services provided in addition to basic skilled services may include one or more of the following: specialized rehabilitation programs, respiratory therapy services, ventilator care, tracheotomy care, IV services for hydration/pain management, hospice services, respite care services, Alzheimer’s and dementia units. Residents with specialized needs are best served when placed in centers with programs designed to meet their needs.
Alzheimer’s: SNF’s specialization in this area fit all the basic SNF criteria with emphasis and provisions in the special care aspects of security for wandering. Specialized activity programs and facilities geared to meet higher activity/agitation levels of the Alzheimer resident.
Costs of Care
Next, let’s look at the costs of care:
|Annual Costs (2015)||
|Assisted Living Facility||
|Semi-Private Nursing Home Room||
|Private Nursing Home Room||
Genworth had a great costs of care comparison by location where you can see the costs by county here: https://www.genworth.com/corporate/about-genworth/industry-expertise/cost-of-care.html.
Progression of Disability
Last, let’s look at our Continuum of Care, which attempts to illustrate what may affect when someone needs care in various settings: