Assisted living centers are first and foremost businesses. They provide an essential service for many elderly, but if they aren’t able to make money, they won’t be able to continue to operate. That said, there are different ways residents may pay for their occupancy in a facility, and it’s important for facility owners to be familiar with them.
Paying Out of Pocket
For many of your residents, the best payment option is to pay out of pocket. Some may be pooling family resources to fund Mom or Dad’s stay in your facility. Others may have funds from annuities, a reverse mortgage, or renting out their old house. These residents may have more funds at their disposal to pay for your services, or they may not. It’s possible that their income fluctuates, depending on its source. To build a trusting relationship, make sure you are open and upfront about your pricing. It may change based on the level of care needed, and residents and their families deserve to know about that in advance.
Government Aid Programs
You’ve probably heard some of your residents talking about being on a fixed income. Those residents may be using government programs such as Social Security income, Medicare, or Medicaid to pay for their residency. You may be less excited to take in residents who use Medicare or Medicaid to pay for their stay since you are likely to earn less of a profit from them. Keep in mind that these two healthcare programs don’t work the same when it comes to paying for long-term facility care. While an average of 10,000 people per day become eligible for Medicare, it’s important to note that this form of aid typically doesn’t cover long-term facility care. Medicaid, on the other hand, can.
Long-Term Care Insurance
Some residents may be using long-term care insurance to pay for their room and board. Some of these policies are designed so that payments go directly to your facility. Other policies instruct the benefits to be paid out to the beneficiary who will then make the payment to you. Make sure you clearly understand who the payment will be coming from and which resident it pays for.
Your residents come from a variety of backgrounds and have different resources available to them that they can use to pay for their residency. Some may be paying out of pocket, while others make use of government aid programs. Still others may fund their stay by using long-term care insurance benefits. As a facility owner, it’s in everyone’s best interest that you become familiar with these options and how they can impact your business’s income.
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