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A Retirement Worst-Case Scenario: Eviction

What you can learn from a financial meltdown at a Brooklyn assisted-living facility

By Elizabeth O'Brien and MarketWatch

 

But now the residence is set to close—the victim, operators say, of rising costs. In March, the facility’s 120-some residents were given 90 days’ notice that they’d need to find another place to live, sending families into a panic.

(MORE: How Safe Is Your Parent's Retirement Home?)
 

“It’s a very traumatic situation,” said Donald J. Curry, partner at Fitzpatrick, Cella, Harper & Scinto, a law firm that, along with The Legal Aid Society and MFY Legal Services, is representing some elderly residents in a lawsuit related to the closure.

 

t’s rare for one of the nation’s 31,000 assisted living facilities to close outright, experts say. But the situation in Brooklyn highlights the sometimes-unstable nature of assisted living, which experts say isn’t always apparent to families navigating the country’s fragmented long-term care system. Indeed, even when a facility is in good financial shape, it can often decide to essentially evict an elderly occupant—leaving families scrambling for a Plan B.

 

Assisted living facilities are a step between independent living and nursing homes. Designed for people who may need some help with activities of daily living, such as bathing or cooking, but who don’t need the round-the-clock medical care that a nursing home provides, these facilities generally have a more homelike, less institutional feel than nursing homes. The privacy and level of independence they promise can be very appealing to residents and their families.

(MORE: A Starter Guide for Assisted Living)

 

Some assisted living facilities are connected to nursing homes, but many are stand-alone. About one million Americans live in assisted living facilities, according to estimates by industry groups. (The facilities are known under different nomenclature in some states—Washington state, for example, uses “boarding homes,” while New York state has “enhanced” housing as a subset of assisted living.)

 

Big Differences in Financing, Regulation

 

The difference between assisted living facilities and nursing homes goes well beyond appearance. Most nursing homes accept government payments in the form of Medicaid—which pays the bulk of this country’s long-term care costs—and in more limited circumstances, Medicare. Consequently, nursing homes fall under federal oversight.

 

Assisted living facilities, for the most part, rely on residents’ private payments. Regulations are at the state level and are “very loose,” said Richard Mollot, executive director of the Long Term Care Community Coalition, a New York City-based nonprofit advocacy group. Most states require assisted living facilities to be licensed, but licensure alone isn’t indicative of quality care, experts say.

(MORE: The Basics on Assisted Living)

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State regulations often set broad parameters about what types of residents assisted living facilities can safely accommodate, but there’s plenty of discretion at the facility level, said Howard S. Krooks, an elder-law attorney with offices in Rye Brook, N.Y. and Boca Raton, Fla., and president of the National Academy of Elder Law Attorneys.

While people who require 24/7 medical care generally cannot be admitted to assisted living, there’s a large gray area between the fully independent and the bedridden. “They reserve in their contracts a lot of discretion on whether you’re allowed to stay,” Krooks said.

 

For these and other reasons, families’ due diligence should extend well beyond the marketing tour when they shop for assisted living. Ask management, for example, if there’s a registered nurse on the premises. Not all states have that requirement. Mollot said that some assisted living facilities overrely on emergency services and dial 911 frequently, since they don’t have trained staff to handle medical problems that aren’t true emergencies.

 

Not only is this approach stressful for frail residents, but it’s also costly. Medicare pays for hospitalizations, but patients bear significant out-of-pocket costs up to the point where they reach their deductible.

 

It’s also important to ask under which conditions residents can be asked to leave. Depending on how the facility operates, those who develop serious dementia, or significant trouble moving around, could be told to find another home. Of course, it could ultimately be in a resident’s best interest to move to a facility with more intensive support, and it could also make some elderly patients eligible for help form Medicaid. But families need to understand that the need might arise, and have a backup plan to implement if it does, experts say.

 

Elizabeth O'Brien is a retirement healthcare reporter for MarketWatch. Contact her at Elizabeth.O'[email protected]

Elizabeth O'Brien Elizabeth O'Brien is a retirement healthcare reporter for MarketWatch. Contact her at Elizabeth.O'[email protected] Read More
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