WorthPointe advisor John Chapman talked with Senior Care Authority founder Frank Samson about finding the best option for senior housing and care on the latest episode of The John Chapman Show. 

In addition to stressing the importance of being educated before facing a crisis, the podcast focuses on the differences and pros and cons of five different types of care: independent living communities, assisted living, memory care, skilled nursing facilities, and in-home care. The effects of Medicaid or Medi-Cal on senior care options and approximate out-of-pockets costs are also discussed.

Listen here.

Audio Transcription

Speaker 1: (00:00)

Welcome to the John Chapman Show, where we talk about the path of a wealthy millennial uncovering the truth about building and protecting your nest egg. Join us on this journey. As we hear the stories of millennials and mentors alike to help you plan, manage, and protect your wealth. John is an employee of WorthPoint, LLC. All opinions expressed by John and podcast guests are solely their own and do not necessarily reflect the opinions of WorthPoint. This podcast should not be relied upon for investment decisions and is for informational purposes only.

Speaker 2: (00:31)

What are the long-term care options for your aging parents? Well, on today’s episode, we talk with Frank Samson, the founder of Senior Care Authority.com about the incredible need for senior care and the five different categories of it: independent living communities, assisted living, memory care, skilled nursing facilities, and in-home care. Check out some of these statistics: In 2020, there are close to 50 million U.S. citizens who are over the age 65, but in just the next 30 years, that number is expected to almost double to get close to 90 million over the age 65. Now more than 50 percent of the population is expected to need some type of long-term care. And the average duration of care is anywhere between one and a half to three years at a minimum. Be sure to listen to the end where we talk about the pros and cons of each type of care and the potential monthly costs associated with them.

Speaker 2: (01:28)

Don’t forget to subscribe to the show, or you can reach out to me directly @thejohnchapmanshowatgmail.com. With that, let’s dive into today’s episode. Frank, my understanding of Senior Care Authority is that when families are thinking about how to plan for their parents, they probably come to you with months, maybe years ahead of time trying to understand what the best options are for their parents. But when do you usually get in contact with families when they’re asking about senior care living?

Speaker 3: (01:58)

John, I wish that was the case; I really do. Actually, we try to educate people so they will come to us ahead of time, but it’s not quite often that a family or a couple or families get together on a Sunday and go, hey, let’s spend our day going to visit assisted living communities. That’s not too common. So I have to say, in probably a majority of the cases we’re dealing with crisis mode, you know, something has to be done right away, At least those that need a higher level of care.

Speaker 2: (02:25)

Yeah, you’re right. When you put it that way, it doesn’t sound too appealing to spend your Sunday afternoon looking at different types of housing facilities for mom and dad. So it probably is more of a crisis moment, realistically speaking, but I guess maybe there’s some opportunity there for this podcast. And part of why I wanted to have you on is just to be able to help educate people ahead of time, at least a little bit, and understand a framework for what the different care options are. I know for me as a financial planner, when I’m helping my clients transition from their working years to the retirement years, one of the most common things is they’re dealing with elderly parents. And so they’re starting to think about how my retirement plan fits into helping mom and dad. And, so it’s just one of those things that most people aren’t spending a lot of time learning about because they don’t need to until the heat of the moment. So I’d really like for you to help us break down the different categories of options. And that way people have a better sense when they go into it, what might be best for mom and dad. 

Speaker 3: (03:26)

Yeah, absolutely. I’ll be happy to do that. So, you know it is called long-term care, and I would say in most of these examples I give you it is care, we’re providing care. I’ll start on the low end and we’ll work our way up to maybe the higher end of care. So on the low end is what we call independent living. And I guess there’s really no care there. It’s like if somebody were to be in a more of a 55 and over type of a community. You have people who are in that situation because they just don’t want to take care of the house anymore. They’re tired of mowing the lawn and tired of taking care of things. Maybe a spouse has passed and mom or dad, kids don’t want them to be living alone.

Speaker 3: (04:19)

So they maybe go into retirement, sometimes it’s called a retirement home, but I call them more independent living. And that’s what it is. It’s independent living. It’s an apartment whereby a lot of services are being provided for you, you know, meals, activities, tours, bus tours, all sorts of things. And, um, it’s just more of a convenience factor. If care is needed, a true independent living community wouldn’t be able to provide that care. It would just be like, if you were living in your home and we’re going to get an in-home caregiver. They’re not licensed, these locations, they don’t have to be licensed. That’s not a negative, but all the other types of long-term care I’m gonna go over with you are licensed locations. 

Speaker 2: (05:14)

So on the independent living communities, though, just as a sense, how many independent living communities are there, let’s say in California, or if you have some rough numbers? And is there an average to how many residents are living onsite at these large, almost like apartment complexes or can they be small communities, maybe anywhere in between? I guess, what’s the scope of how big the independent living communities are in California?

Speaker 3: (05:40)

I can more actually answer your question as it relates to assisted living because they’re licensed and we easily contract them, you know? So there’s over 8,000 assisted living facilities in the state of California alone. Sometimes independent living could be a section of those assisted living locations. Sometimes they’re standalone communities. I don’t know. I mean, we’re in the thousands, of course. I don’t know the exact number and independent living locations could be anywhere from, you know, 50 residents to a couple hundred residents there. Because they’re not licensed, sometimes if you’re driving by and you see an apartment complex, it could just be an apartment complex or it could be an independent living community.

Speaker 2: (06:37)

That makes sense. So it’s maybe difficult to track if they don’t have licenses, but you said for assisted living facilities, those do require licenses, so it’s much easier to track. And you said they’re up to 8,000 facilities in California.

Speaker 3: (06:51)

Yeah. Yeah. And the majority of those locations, that’s kind of getting into that next step. And the term is assisted living; that’s assisted living. And even though I know you said facilities and sometimes I say facilities, but within the industry, we look at the facility as a medical facility. So a hospital is a facility and a nursing home, which we’ll talk about, is a skilled nursing facility. I look at assisted living as more of a community. Facility that is kind of geared more for the medical. So this is not medical. And you’re right. There are over 8,000 locations in California alone. However, the majority of them are literally licensed private residents, approximately six residents in each. They’re in the middle of a neighborhood. I’m sure everybody that’s listening to this podcast has probably passed one at some point, but never knew it. Like I said, most of them don’t have a sign out front. They are licensed, and usually have a ramp in front of the house.

Speaker 2: (08:02)

That’s the telltale sign, huh. You know what that makes me think? Actually, my grandmother, grandma Nana, lives in an assisted living place. I’m using the wrong term. There was a ramp out front for the wheelchairs and it was in the middle of a nice community in Southern California. I would’ve had no idea otherwise.

Speaker 3: (08:19)

So what is assisted living? Assisted living is really taking care of what we call activities of daily living — ADL — a term people aren’t familiar with. Just think of it as those types of things all of us kind of take for granted when we get up in the morning. So we get up in the morning and we do our stretch and we get out of bed. Okay. Not everybody can do that. Not everybody can get out of bed on their own. They might need some help. All right, that’s a transfer. That’s part of activities of daily life. Now we get out of bed and we go into the bathroom and have to do our natural things. And again, that’s another activity of daily living. Somebody may need assistance with that. Now you’re done and you’re going to go take a shower or bath. Now, again, that’s an activity of daily living. You know, a lot of us take it for granted, but somebody who needs help with that, somebody who may need help with the reminders to take their medication or grooming, all those types of things or activities of daily living falls into assisted living. That is also what would happen if somebody were to hire a caregiver at home, that is also what a caregiver would do, would be assistance with the exact activities of daily living.

Speaker 2: (09:48)

And to juxtapose the assumption for an independent living community is that it’s over age 55. So you are likely still functional or capable of performing those activities of daily living, like getting out of bed and going to the bathroom or bathing or hygiene, all these things; the assumption is you’re doing that on your own. And the big contrast is than at assisted living, there’s actually someone else that’s helping you with those functions.

Speaker 3: (10:15)

Exactly. Yeah. Hence the name independent. You’re independent. Now, if you’re not independent and you still need some care, but you really want to live in an independent living community, you’d have to hire your own caregiver, just like you would do in your own home. It makes sense. And so assisted living again, it didn’t start being licensed till the nineties. So it’s really a young industry. 

Speaker 2: (10:45)

Wow, that makes sense for some perspective, and explains why not everybody is as knowledgeable if it’s fairly new in licensing,

Speaker 3: (10:53)

Right. And a lot of people get confused because they use the term nursing. Okay. These are all nursing homes. These are not. So we’ll talk about nursing in just a second, but assisted living is licensed by each state and then there’s regulations that they have to follow. And, everyone is different. So some will handle people at a higher acuity level. I mean, we’ve heard of people with various types of dementia, like Alzheimer’s. Does that mean you can’t be in assisted living now? No, you can, because really, that individual does not necessarily need any medical care. They might need help with what we talked about before, activities of daily living. Okay. Right now, obviously somebody with Alzheimer’s, it’s maybe pretty far along, there are sections sometimes within the living or separate buildings that are assisted living, but they specialize in working with people with memory care issues.

Speaker 3: (12:02)

Okay. But there’s assisted living and there’s memory care; memory care is assisted living. They just specialize with people who have issues, cognitive issues that, you know, just take caregivers that are more educated and know how to deal with those situations. So again, the regulations on assisted living are done state by state. So there might be certain regulations in California that could be different than Oregon or Washington or New York. Okay. That’s a state-by-state regulatory assist. And as I say, assisted living has grown tremendously because there has become kind of a gray area. When I started in the business several years ago, it was quite clear on when someone would go to assisted living versus nursing. Today it’s gray. All right. The reason is that the various states have allowed assisted living communities to provide more care — more types of care.

Speaker 3: (13:17)

I give you a pretty easy difference between the two or when someone would have to maybe go to a nursing or a skilled nursing facility would be more someone who has tubes that are going inside of them, a feeding tube or something like that. Assisted living doesn’t deal with that. However, let’s say somebody was incontinent. You know, I’ve dealt with families who said, well, you know, my father or my mother is in adult diapers, and I’m sure she has to go to nursing. Now, you don’t have to go to nursing. You could be in assisted living. That’s all part of those activities of daily living. It’s when you need medical, true medical help, because assisted living, though many have nurses on premise, from a regulatory standpoint, they don’t have to. So their caregivers that are there 24 hours a day to assist. Assisted living is a wide, wide range and assisted living communities are on the rise, more and more locations opening up all over the country, more and more beds meeting the needs of the growing boomer population and their parents. And what’s called a nursing home, what we called a SNF, a skilled nursing facility. That’s a facility. The actually skilled nursing facilities are on the decline. And the reason they’re on the decline is because more and more people are moving toward assisted living. 

Speaker 2: (14:52)

Now is that a different license, a different category by the state regulators have asked skilled nursing?

Speaker 3: (14:58)

Again, it’s different state by state, but if you’re talking about California, the Department of Social Services licenses assisted living and the Department of Health and Human Resources licenses nursing and hospitals.

Speaker 2: (15:16)

Okay. All right. So it sounds like the skilled nursing facilities, one of the initial takeaways is that’s maybe more significant medical care or maybe just different types of medical care where you truly need an actual nurse. If they’re, especially if there’s maybe tubes who, you know, going in for feeding or something of that nature. So, yeah.

Speaker 3: (15:34)

And that’s for more of the long-term care, but let me tell you, what’s the shift that has happened through the years with skilled nursing. And when you hear about someone going into a hospital and maybe having some surgery and then they get discharged and then they go into quote, rehab. Rehab is a skilled nursing facility. 

Speaker 2: (16:01)

Oh, very interesting. 

Speaker 3: (16:03) 

Okay. So it’s just, you know, they might use the term rehab. So that’s been the shift. The shift is skilled nursing facilities kind of reinventing themselves and handling more short-term stays. And so they had hip surgery and now they’re going to go into rehab for a couple of weeks or whatever that timeframe is. And they’ll go into rehab, which is part of a skilled nursing. So many of these skilled nursing facilities, the higher percentage of the patients that are there are there for rehab.

Speaker 3: (16:33)

Now, if they’re there for long-term care, they’re going to be living there, possibly the rest of their lives. That is, you know, there are people that do that, too. And there’s usually one of two reasons why they’re there. One is, like you said, the amount of medical care that is needed is so great and it doesn’t fit them being in assisted living. And it doesn’t make sense for them to be in a hospital because of the cost. It could, maybe they should be taken care of in a skilled nursing facility and they may be living there the rest of their lives. And the other reason is if someone is on Medicaid and California, it’s called Medi-Cal, you know, here in California, we always have to be different, right? Medicaid, which basically says that someone doesn’t have the funds, they don’t have the money to pay for private care because that’s what assisted living is generally speaking.

Speaker 3: (17:35)

It is you’re paying privately for that. So in a skilled nurse thing, there are people that live there long term because of medical reasons or they’re on Medicaid, because the government says that they will help pay for people’s care, you know, pay for people’s care long-term, but they need to be in a health facility. And that’s why now there are state-by-state variances, because then somebody is thinking, well, God, could I be on Medi-Cal or Medicaid and be in assisted living? Generally speaking the answer’s no, but state-by-state, there may be some regulations that allow for that.

Speaker 2: (18:28)

That’s a really big takeaway, Frank, because if somebody is in a situation where they’re on Medicaid, Medi-Cal here in California, it sounds like even if they didn’t necessarily need rehab, but they needed help with activities of daily living, if the state is paying for it, that automatically pushes them into skilled nursing facilities. Right?

Speaker 3: (18:50)

Yeah. Understand that rehab is being paid by Medicare. So Medicare is more for short term, up to I think, 90 days, but if it’s something that’s needed on a long-term basis, that’s when Medicaid either kicks in, if they’re approved for that, or they have to pay privately, even in nursing they have to pay privately.

Speaker 2: (19:18)

We haven’t talked about the cost for these. I imagine there is a wide range, but can you help the audience understand just how to understand the different costs associated with assisted living compared to a skilled nursing facility?

Speaker 3: (19:30)

Yeah. I mean, that’s a great question. But just to kind of give you an idea, if I asked you, you know, how much for a long-term care insurance policy, I don’t know if that would be something you could answer, or you know, if I said how much is it to fly on an airplane? You know? So, I mean, it’s such a wide variance, but I’ll still give you an idea, at least in California. Independent living again, it’s a room rental. So I mean, there’s a wide range. Assisted living could be anywhere from, let’s just say $3,000 to $3,500 a month. And it could go up to, you know, a high-end memory care location, that could be $15,000+ a month.

Speaker 3: (20:25)

Okay. But I would say probably the strongest range is probably $5,000 – 6,000 per month. And again, what I’m including is everything in that range, meaning your accommodations and an average level of care, your meals, everything. So that kinda gives you,, maybe, you know, an idea. Obviously the higher the acuity level, the higher the costs. Also, I have seen that there’s a direct correlation between the cost of real estate prices — I’m talking residential homes and assisted living — meaning that if you’re going to be in more of an affluent area where there’s higher residential cost of homes, usually the assisted living in those locations is also going to be higher for the same amount of care, the same type of building. If you take that exact same building and same amount of care and move it into an area where the the residential prices are less, it’s going to be less money.

Speaker 2: (21:42)

Okay. That makes sense. 

Speaker 3: (21:44)

So there is a direct correlation, a direct correlation there. The other part of a long-term care of course, is in-home care. And a lot of people that say, well, I just want to get a caregiver at home. All right. And certainly, you know, someone that needs care, you know, someone to come in and help with those activities of daily living or help with errands or things like that. And it might need a few days, a week is a wonderful option. You know, someone that starts to get into needing someone there every single day, possibly, and maybe memory care is an issue. And maybe there has to be some even staying overnight. Now you’re getting into some pretty significant costs. And sometimes it’s actually just from a cost standpoint, it might be even better being in assisted living 24 hours a day. That costs less because you’re spreading out a lot of those costs for caregiving, etc., having a dedicated person. But again, it’s, everybody’s situation is different, but home care is, you know, another example of long-term care.

Speaker 2: (22:52)

Okay. All right. That’s really helpful. Frank, this is really nice to have a structure and a framework to think about the different categories of care and who fits into which category. It sounds like from what you said, there’s a lot more gray area and I imagine maybe even a shift from one to the other. So it’s important for those listening to know that there’s just a lot of options out there. So I guess before we wrap up Frank, I want to make sure we talk a little bit about Senior Care Authority and the organization that you’re helping to run. And if people are interested in reaching out how they can best get in touch with you or someone on your team.

Speaker 3: (23:27)

Yeah. The one strong suggestion I have for everybody out there is, don’t try to do this alone. And the reason is that it’s not like this is something you do on a regular basis. You may be confronted with a family member once in your lifetime, maybe twice. And it’s something that our advisors that are all over the country, actually all over North America are trained in, have a lot of experience, and do this for their living. So don’t try to do it on your own, whether you’re utilizing our services or anybody else’s, don’t try to do it alone. Senior Care Authority is a company that really provides advice to families to help navigate the various care choices. You know, like everything we just spoke about today.

Speaker 3: (24:31)

We take a look at all of that and we help provide options. Let’s say assisted living is the probably the best option, then we’re going to understand what the needs are and budgets and all of that. And we provide what we think would be the best options. And our advisors are around the country and they meet with the families face to face. Obviously these interviews are taking place during this COVID-19 right now, but we’re doing everything virtually, virtual tours, all of that. So we’re still providing solid advice. And especially now with what’s going on, people need to understand all the protocol at these locations. So we provide that type of care or that type of assistance to families and work with adult children, etc., Our website is senior care authority.com and our phone number, if you want to call, is 888-854-3910. 

Speaker 3: (25:35)

And then we can put you in touch with an advisor in your area. And we look forward to providing any advice. The wonderful thing about the way this is structured — it’s similar to maybe financially, if you’re looking to buy a home and you have a real estate agent and the seller of that home is paying the commission and it works the same way here. So if you’re looking to find a place for a loved one, we have negotiated a pretty standard commission that we earn from the particular location. So therefore it’s not going to be a cost to you. Now, there’s a number of other services we provide that we do charge for, but we’d lay those out for you if you need that. But an example might be maybe the family just isn’t seeing eye to eye on what the next step should be for dad.

Speaker 3: (26:32)

You need us to come in and try to be an advocate for the parent and try to work it out, get everybody on the same page. So there might be fees from that standpoint, but we lay it all out, and as it relates to what we call placement, helping you find the location, we’re earning our fees directly from those assisted living facilities. 

Speaker 2: (26:55:)

Hmm. Very interesting. That’s a really helpful background, Frank, because that naturally would be a question someone would have, but that removes a lot of the barriers for people reaching out, especially maybe even in that moment of crisis, because it sounds like if that the fee is being paid by the assisted living home, then there’s no cost to the families that you’re talking with, or reduced costs. And that’s really a great benefit. 

Speaker 3: (27:28)

And there’s also been studies done that when a family tries to do it themselves — and it’s not that they may not know of our type of service — so they do it themselves because they’re unaware that in most cases, or a majority of the cases, they don’t get it done right the first time, so they have to move mom or dad again. And that’s pretty difficult on everybody. We try to get it done right the first time. And also the study shows that sometimes 10 locations are visited before a decision is made. And when we do it, you know, we know the places, so we’re going to probably provide maybe a choice of three, maybe four options. And usually we get it right from those options. So it’s a tremendous time saver. 

Speaker 2: (28:07)

Wow, super Frank. Thank you so much for your time and your expertise on this. For those listening, I will share a link to Senior Care Authority.com in the show notes here so that you can check it out. Frank, we appreciate your time and hope you have a great rest of the day. 

Speaker 3: (28:19)

John, thank you so much for having me. I appreciate it. Thanks.

Speaker 1: (28:23)

Thanks for tuning into the John Chapman Show. Be sure to subscribe on iTunes, Stitcher, or Spotify. We encourage your questions, comments, and feedback for additional information. Check out the John Chapman Show.com or look for John on LinkedIn and Twitter. See you next week.