Providence area sees prices jump
Assisted-living costs in the United States rose by 15 percent in the past year, a new survey shows, and prices in the Boston and Providence markets have risen even faster, with Boston’s average base rates now the highest in the nation, at $4,629 per month.
Your Business Has Gone Global. Has Your Insurance?
A decade ago, “doing business internationally” was mostly a large-company concern. Today, a manufacturer in…
Learn More
The survey, conducted for the MetLife Mature Market Institute by LifePlans Inc., covered a random sampling of facilities in 87 U.S. markets, including 11 of the 69 in Rhode Island. It found the average monthly base price was $2,905, or $34,860 annually.
A MetLife survey last year had pegged the average price at $2,524. The average monthly base rate in Rhode Island was $2,935 this year, up 32 percent from last year’s $2,224. In Boston, the average price was 35 percent higher than last year.
“The cost of care in an assisted-living facility is rising rapidly, and in many areas, is outpacing inflation,” said Sandra Timmermann, director of the MetLife Mature Market Institute, which sponsors the surveys to help consumers with long-term planning.
Given the fast-rising costs, Timmermann added, assisted living “may be out of reach for many people,” and fees often charged separately, such as for meals delivered to the living quarters and for dementia care, can boost the cost even more.
But how reliable is the MetLife survey in determining the cost of assisted living in New England, and in reflecting price trends? The survey itself warns that the figures are “not generalizable,” and Timmermann acknowledged that the sample for each market is small – 10 facilities or 15 percent of the market, whichever is more.
Yet a close look at the individual facilities polled, Timmermann said, suggests that the big annual change is not just a statistical fluke.
In Providence, six of the facilities polled were also in last year’s sample, she said, and of those, one raised its fee from $1,995 to $2,550, another from $2,000 to $2,500, and another from $1,800 to $2,279. Two others’ rates, in the $3,000 range, stayed stable or went down slightly.
Among newly included Providence market facilities, Timmermann added, the rates ranged from $2,550 to $4,423 per month – “really quite high.”
The survey found similar changes in Boston, where five facilities were in last year’s sample, Timmermann said. In one particularly dramatic case, the base rate shot up from $2,200 to $3,450, and new additions to the list ranged in price from $3,850 to $6,300 per month.
Assisted living is defined as a housing option for older adults that promotes independence but also provides support with daily living, medication or other needs. Facilities can range in size from a small house to a large apartment complex, though most have between 25 and 125 units.
According to the Assisted Living Federation of America, more than 1 million Americans live in 20,000 assisted-living residences nationwide. The typical resident is a woman in her 80s who is either widowed or single. Most residents pay privately or through a long-term care insurance policy; some states, including Rhode Island, provide limited Medicaid subsidies.
For the MetLife survey, facilities were called in August and asked for the monthly base rates for a one-bedroom apartment or the closest equivalent, Timmermann said. Where different rates were quoted for different levels of care, the figures were averaged.
The Providence facilities quoted prices from $2,020 to $4,423 per month. The Boston facilities ranged from $3,405 to $6,300. Nationwide, only two markets had facilities priced under $1,000.
Asked why prices are rising so fast, Timmermann said she can’t fully explain it, but based on conversations with people in the industry, she believes it’s a combination of real estate costs, rising wages and a growing demand for assisted living.
In addition, she said, “some of the higher-end assisted-living chains are acquiring smaller chains, and I think this is looking to investors as a good investment as well.” As those chains grow stronger, she said, “they know that the market is there, so they’re charging what the market would bear,” especially in prime metropolitan areas.
The acquisition trend has showed up in Rhode Island: Early this year, Village Retirement Communities, one of the region’s largest assisted-living companies, with facilities in Rhode Island, Massachusetts and Connecticut, sold nine of its 10 sites to Benchmark Assisted Living, of Wellesley Hills, Mass., in one of the largest deals in the industry in five years.
Looking at how families can maintain access to assisted living despite the rising costs, Timmermann pointed to an obvious solution offered by her institute’s parent: long-term care insurance, which can be purchased to provide various levels of coverage.
Rising costs are “one of the reasons why people choose to buy long-term care insurance,” she said, “because they can use the money at home as long as possible, and then they can also choose assisted living.”
The full survey is available at www.maturemarketinstitute.com.
