The matchup promises to be a heated brawl between rising political stars.

This article was published on Monday, November 27, 2023 in KFF Health News.

By Daniel Chang and Angela Hart

Republican presidential candidate Ron DeSantis and Democratic Gov. Gavin Newsom — political rivals from opposite coasts and proxies for red and blue America — are set to square off for a first-of-its-kind debate Nov. 30 in Georgia.

Newsom, a liberal firebrand in his second term as governor of California, isn't running for president in 2024. But he goaded DeSantis, in his second term as governor of Florida, to go mano a mano. "I'll bring my hair gel. You bring your hairspray," he taunted on social media.

The matchup promises to be a heated brawl between rising political stars who lead two of the nation's most populous and diverse states. And it will mark the first time the politicians meet in person even as they have very publicly traded barbs and insults, in recent weeks attacking each other in fundraising videos and campaign ads.

Front and center will be homelessness and healthcare, top priorities for voters — and issues that have largely defined the governors' policies and leadership styles. From abortion to covid-19 vaccines, Newsom and DeSantis could not be further apart.

Earlier this year, DeSantis blasted California for being too generous with public benefit programs, such as Medicaid, which the Golden State has expanded to all eligible residents regardless of immigration status. That sweeping policy takes effect in January and goes well beyond the optional expansion of Medicaid that the Affordable Care Act offered states. In Florida, one of 10 states that have refused to expand Medicaid under Obamacare, DeSantis wears the state's 11% rate of uninsured residents as a badge of honor.

"We're not going to be like California and have massive numbers of people on government programs without work requirements," DeSantis said at a presidential primary debate in Southern California earlier this year.

DeSantis has led his state to restrict abortion and gender-affirming care and to ban covid-related mask and vaccine mandates.

Newsom, a slick and brash surrogate for Democratic President Joe Biden, has slammed DeSantis for putting Floridians in danger and stripping them of their rights.

"Join us in California, where we still believe in freedom," Newsom said in a political ad earlier this year.

Newsom has earned the moniker of "healthcare governor" by catapulting the issue to the top of his policy priorities. He made California an abortion sanctuary and is dramatically expanding healthcare benefits. He had promised to bring single-payer healthcare to the nation's most populous state while campaigning for his first term, but that idea hit stiff political opposition early in his tenure. And now Newsom boasts about bringing the state's uninsured rate to an all-time low of 6.5% by expanding coverage in other ways.

These issues are expected to take center stage during the nationally televised 90-minute debate on Fox News, which could have major reverberations for the presidential contest next year and could even help shape the 2028 field of White House contenders.

In advance of the showdown, KFF Health News analyzed 10 of the governors' top healthcare positions and how their policies have improved — or hindered — the health of the residents they represent.

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California healthcare Foundation. 

Daniel Chang: dchang@kff.org, @dchangmiami

Angela Hart: ahart@kff.org, @ahartreports

For decades, the industry severely underestimated how many policyholders would use their coverage.

This article was published on Wednesday, November 22, 2023 in KFF Health News.

By Jordan Rau and JoNel Aleccia

For 35 years, Angela Jemmott and her five brothers paid premiums on a long-term care insurance policy for their 91-year-old mother. But the policy does not cover home health aides whose assistance allows her to stay in her Sacramento, California, bungalow, near the friends and neighbors she loves. Her family pays $4,000 a month for that.

"We want her to stay in her house," Jemmott said. "That's what's probably keeping her alive, because she's in her element, not in a strange place." 

The private insurance market has proved wildly inadequate in providing financial security for most of the millions of older Americans who might need home health aides, assisted living, or other types of assistance with daily living. 

For decades, the industry severely underestimated how many policyholders would use their coverage, how long they would live, and how much their care would cost. 

And as Jemmott belatedly discovered, the older generation of plans — those from the 1980s — often covered only nursing homes. 

Only 3% to 4% of Americans 50 and older pay for a long-term care policy, according to LIMRA, an insurance marketing and research association. That stands in stark contrast to federal estimates that 70% of people 65 and older will need critical services before they die. 

Repeated government efforts to create a functioning market for long-term care insurance — or to provide public alternatives — have never taken hold. Today, most insurers have stopped selling stand-alone long-term care policies: The ones that still exist are too expensive for most people. And they have become less affordable each year, with insurers raising premiums higher and higher. Many policyholders face painful choices to pay more, pare benefits, or drop coverage altogether. 

"It's a giant bait-and-switch," said Laura Lunceford, 69, of Sandy, Utah, whose annual premium with her husband leaped to more than $5,700 in 2019 from less than $3,800. Her stomach knots up a couple of months before the next premium is due, as she fears another spike. "They had a business model that just wasn't sustainable from the get-go," she said. "Why they didn't know that is beyond me, but now we're getting punished for their lack of foresight."

The glaring gaps in access to coverage persist despite steady increases in overall payouts. Last year, insurers paid more than $13 billion to cover 345,000 long-term care claims, according to industry figures. Many policyholders and their relatives reported that their plans helped them avert financial catastrophes when they faced long-term care costs that would have otherwise eviscerated their savings. 

But others have been startled to learn that policies they paid into over decades will not fully cover the escalating present-day costs of home health aides, assisted living facilities, or nursing homes. And in other cases, people entitled to benefits confront lengthy response times to coverage requests or outright denials, according to records kept by the National Association of Insurance Commissioners, the organization of state regulators. 

Jesse Slome, executive director of the American Association for Long-Term Care Insurance, an industry trade group, said long-term care was the most challenging type of insurance to manage. "You need multiple crystal balls," Slome said. "And you have to look 20 years into the future and be right."

The Pandemic Paused a Long-Term Decline 

The industry's wobbly finances haven't steadied despite a brief profitable surge during the coronavirus pandemic. Earnings rose because thousands of people who were drawing benefits, many in nursing homes or assisted living facilities, died from covid-19, and other policyholders died before using their insurance. Others stopped tapping their benefits because they fled facilities and went to live with their families, who provided unpaid care. 

Overall, earnings went from $2.3 billion in losses in 2019 to two years of profits totaling $1.1 billion, before receding into the red in 2022 by losing $304 million, according to Fitch Ratings.

Still, none of that was enough to reverse the industry's long-term decline. Doug Baker, a director in Fitch's U.S. life insurance group, said long-term care insurance "is one of the riskiest in our universe" because of the lingering financial burden from underestimating the number of people who would tap their policies. 

More insurers now offer hybrid plans that combine life insurance with long-term care. Those policies are less generous than the ones offered a decade ago — and using the long-term care benefit drains some or all of the money policyholders hoped to leave to their heirs. 

"I don't think people will offer unlimited again," said Tom McInerney, the chief executive of Genworth Financial, which suspended selling plans through brokers in 2019. "One way or another, taxpayers are going to have to pay more for long-term care needs of the baby boomers." 

Many experts believe it's untenable to expect that a private insurance market can protect most people from the growing burden of long-term care costs. 

"The whole situation is poorly suited to that kind of insurance offering," said Robert Saldin, a political science professor at the University of Montana who studies the industry. 

Falling Profits and Skyrocketing Premiums

Starting in the 1970s, long-term care insurance was touted as a way to keep older people from eroding their retirement savings or resorting to Medicaid, the state-federal program for the poor and disabled. Early plans were limited to nursing home care but later expanded to cover in-home care and assisted living centers. Sales of the policies doubled from 1990 to 2002.

As demand grew, however, there were signs the industry had vastly miscalculated the cost of its products. Insurers set early policy prices competitively low, based on actuarial models that turned out to be markedly inaccurate. Forecasters' estimates of policyholders' longevity were wrong. U.S. life expectancy increased to nearly 77 years in 2000 from about 68 years in 1950, federal records show. And as people lived longer, their need for care increased. 

Industry officials also failed to account for the behavior of savvy consumers determined to keep their long-term care coverage. Insurers counted on policy lapse rates — people giving up their policies or defaulting on payments — of about 4% annually. The actual lapse rate was closer to 1%. 

As the miscalculations sent profits plummeting, insurers raised premiums or exited the market. By 2020, sales of traditional policies had dropped to 49,000 and the number of carriers offering plans had fallen to fewer than a dozen from more than 100. 

Premiums for some consumers doubled in just a year or two. Three class-action lawsuits accused Genworth of failing to disclose to policyholders that it had planned multiyear rate increases, leaving them without information they needed to decide whether to keep their policies. Genworth settled the lawsuits with offers to allow customers to adjust their policies, and in some cases it paid cash damage to those who accepted reduced benefits. The company did not admit wrongdoing.

The increases continue. AM Best, a rating agency, said in a report last November that Genworth "will continue to need annual rate increases for at least several more years to reach economic break-even." 

Prices for new policies have jumped, too. A decade ago, a couple aged 55 could expect to pay about $3,725 a year for a policy that included $162,000 in total benefits and 3% annual inflation protection, according to the American Association for Long-Term Care Insurance. Today, a policy that is virtually the same would cost $5,025, 35% more, even as rising health costs and inflation have eroded the value of the benefits. 

And that's only for the people who can qualify. To limit their losses, insurers have narrowed the eligible pool of clients. In 2021, about 30% of applicants ages 60 to 64 were denied long-term care insurance. For applicants 70 to 74, the rejection rate was 47%. Even among people in their 50s, more than 1 in 5 were turned down. Chronic health conditions, a history of stroke or diabetes, or psychiatric illness may all be grounds for disqualification. 

At the same time, insurers began scrutinizing claims more closely. "They tightened their belts," said Alan Kassan, a senior partner with the California law firm Kantor & Kantor, which represents clients challenging denials. "Then they tightened their claim administration and started denying claims more and more." 

In 2022, the proportion of traditional long-term care claim denials varied, from 4.5% in Rhode Island to 9.6% in Alaska, according to the National Association of Insurance Commissioners. 

Despite efforts to limit liability, financial problems forced several high-profile insurance providers to drastically revise policy terms and premiums or go into insolvency, affecting the investments of thousands of clients. 

They included Alice Kempski, a retired nurse who, after her husband died, bought a policy from the insurance company Penn Treaty and American Network in 2004 on the advice of a financial adviser, paying premiums of $180 a month for 16 years. By 2017, she was hobbled by osteoporosis and was struggling to manage her multiple medications, according to her daughter, Ann Kempski. She sold the family home in Wilmington, Delaware, in 2017 and, now needing help bathing, moved to an assisted living center there. But when the family tried to file a claim, they discovered that Penn Treaty was insolvent and the policy had been taken over by the Pennsylvania state insurance guaranty fund. 

The fund had frozen Kempski's benefits and increased her premiums to about $280 a month, her daughter said. Her doctor told Penn that she had "mild dementia" and osteoporosis and should be in an assisted living facility. But the insurer said that there was not enough evidence that she needed help with two daily living activities or had severe cognitive impairment, conditions that would trigger coverage, according to correspondence between Kempski and the company. 

Kempski was paying roughly $5,400 a month out-of-pocket to the assisted living center. She moved in with her daughter when the pandemic hit, but she continued to pay full rent to the facility to save her spot until she returned in 2021. In March of that year, when her daughter was preparing to refile a claim for long-term care insurance and her premiums had reached $320 a month, Kempski had a massive stroke. She died the next month. The insurer never paid for any of her care. 

Coverage in a Facility but Not at Home

The policy held by Angela Jemmott's mother, Jewell Thomas, went unused for a different reason: Like many older policies, it covered only skilled nursing care in a facility. Her children had purchased the policy after Thomas' husband died at 56. 

But decades later, once Thomas developed dementia in her 80s, her children realized how desperately their mother wanted to stay home. Jemmott said they tried to add a rider to the policy to cover home care but were told that their mother's age (older than 75) barred add-ons. Now the siblings jointly pay about $4,000 a month for two home health aides, while still paying the insurance premium of more than $2,500 a year. "We feel like if we stop paying it, another unforeseen need will arise and cause us to wish we kept it," Jemmott said. 

Not all policyholders are displeased. 

Bert Minushkin, of Royal Palm Beach, Florida, paid monthly premiums for 27 years, beginning in 1993 when the policy was offered as a benefit by Westinghouse Electric Corp., where he worked as a nuclear engineer. Over time, he paid about $120,000 toward the policy, said his daughter Lisa Heffley, 61, of Louisville, Kentucky. 

Diagnosed with dementia, Minushkin began declining swiftly in 2019. His wife spent $220,000 on assisted living facilities and private aides for him over three years, with about $90,000 of the cost offset by his policy, Heffley said. He died in February 2022 at age 91. 

"He didn't break even, but thank God he had it," she said. 

Turning to Crowdfunding

Many experts say what's needed is a government-subsidized or public program that requires people to carry long-term care insurance, as the Netherlands and Singapore have. But federal efforts to create such a system, including the CLASS Act, which was repealed in 2013, and the WISH Act, introduced in 2021, have failed to gain traction in Congress. At the state level, Washington this summer started a first-in-the-nation program that will provide long-term care benefits for residents who pay into a fund, but it is voluntary, and the maximum benefit of $36,500 will not cover a year in most assisted living facilities.

Lack of a safety net leaves some people unprotected, like Jeffrey Tanck, a real estate broker in Washington, D.C. In 2021, his mother, Sue Tanck, at 75, suffered a serious fall, leaving her with broken arms and a traumatic brain injury. She had been the primary caretaker for his father, Roger, then 77, who had rapidly worsening dementia. 

Without warning, Jeffrey Tanck had to assume charge of his father's care, moving him into an assisted living center in Ocala, Florida, that now charges $4,600 a month, and had to get his mother into a skilled nursing facility paid for by Medicaid. With no money to cover his father's costs until he sold their house, Tanck resorted to a plea on the crowdfunding site GoFundMe. 

Wanting to shield himself from a similar financial crisis somewhere down the road, Tanck, who is 51, applied for long-term care insurance, only to be denied. The reason? He takes antidepressants, which help him cope with the anxiety and stress of caring for his parents. 

"What are people supposed to do?" Tanck asked. "I'm going to need something." 

Jordan Rau: jrau@kff.org, @jordanrau

JoNel Aleccia: @JoNel_Aleccia

The hospital charged $9,520.02 for the blood tests and pathology services. The insurer paid $4,310.38, leaving the patient with a lab bill of $2,390.12.

This article was published on Tuesday, November 21, 2023 in KFF Health News.

By Rachana Pradhan 

Reesha Ahmed was on cloud nine.

It was January and Ahmed was at an OB-GYN's office near her home in Venus, Texas, for her first prenatal checkup. After an ultrasound, getting anti-nausea medication, and discussing her pregnancy care plan, she said, a nurse made a convenient suggestion: Head to the lab just down the hall for a standard panel of tests.

The lab was inside Texas Health Hospital Mansfield, which opened in December 2020 in a Dallas-Fort Worth suburb. Ahmed, just eight weeks pregnant, said the doctor told her everything about the visit was routine. "Nothing really stood out," Ahmed said. "And, of course, there's just a lot of excitement, and so I really didn't think twice about anything."

Her blood tests checked for multiple sexually transmitted infections, her blood type, and various hormones. Within days, Ahmed began bleeding and her excitement turned to fear. A repeat ultrasound in early February showed no fetus.

"My heart kind of fell apart at that moment because I knew exactly what that meant," she said. She would have a miscarriage.

Then the bills came.

The Patient: Reesha Ahmed, 32, has an Anthem Blue Cross and Blue Shield policy through her employer.

Medical Services: An analysis of Pap smear results and several blood tests in tandem with Ahmed's initial prenatal visit, including complete blood count, blood type, and testing for STIs such as hepatitis B, syphilis, and HIV.

Service Provider: Ahmed got her tests at Texas Health Mansfield, a tax-exempt hospital jointly operated by Texas Health Resources, a faith-based nonprofit health system, and AdventHealth, another religious nonprofit.

Total Bill: The hospital charged $9,520.02 for the blood tests and pathology services. The insurer negotiated that down to $6,700.50 and then paid $4,310.38, leaving Ahmed with a lab bill of $2,390.12.

What Gives: Ahmed's situation reveals how hospital-based labs often charge high prices for tests. Even when providers are in network, a patient can be on the hook for thousands of dollars for common blood tests that are far cheaper in other settings. Research shows hospitals typically charge much more than physicians' offices or independent commercial labs for the same tests.

The situation was particularly difficult for Ahmed because she had lost the pregnancy.

"To come to terms with it mentally, emotionally, physically — dealing with the ramifications of the miscarriage — and then having to muster up the fighting strength to then start calling your insurance, and the billing department, the provider's office, trying to fight back a bill that you don't feel like you were correctly sent? It's just, it's a lot," she said.

In Texas, the same lab tests were at least six times as expensive in a hospital as in a doctor's office, according to research from the Health Care Cost Institute, a nonprofit that examines health spending.

The markup can be even higher depending on the test. HCCI data, based on 2019 prices, shows the median price for a complete blood count in Texas was $6.34 at an independent lab and $58.22 at a hospital. Texas Health charged Ahmed $206.69 for that test alone.

"It is convenient to get your lab done right in the same building," said Jessica Chang, a senior researcher at HCCI, but "many patients are not thinking about how highly marked up these lab tests are." Chang said she suspects many hospitals tack on their overhead costs when they bill insurance.

Anthem also charged Ahmed for at least four tests that most insurance plans would consider preventive care and therefore covered at no cost to patients under the Affordable Care Act's requirements for covering preventive care, which includes aspects of prenatal care. Her EOBs, or "explanation of benefits" notices, show she paid out-of-pocket for a test identifying her Rh factor — which detects a protein on the surface of red blood cells — as well as for tests for hepatitis B, hepatitis C, and syphilis.

Asked to review Ahmed's tests, Anthem spokesperson Emily Snooks wrote in an email to KFF Health News that the claims "were submitted as diagnostic — not preventive — and were paid according to the benefits in the member's health plan."

There "definitely shouldn't be" out-of-pocket costs for those screenings, said Sabrina Corlette, co-director of Georgetown University's Center on Health Insurance Reforms.

The Centers for Disease Control and Prevention recommends screening pregnant patients for several infectious diseases that pose major risks during pregnancy. Ina Park, a professor of family community medicine at the University of California-San Francisco and an expert on STIs, said the tests Ahmed received didn't raise red flags from a clinical perspective. "It's really more what the actual lab charged based on what the tests actually cost," Park said. "This is a really exorbitant price."

For example, Ahmed paid $71.86 in coinsurance for a hepatitis B test for which the hospital charged $418.55. The hospital charged $295.52 to screen for syphilis; her out-of-pocket cost was $50.74.

"You just wonder, is the insurance company really negotiating with this provider as aggressively as they should to keep the reimbursement to a reasonable amount?" Corlette said.

The Resolution: Ahmed refused to pay the bills and Texas Health sent the debt to collections. When she tried to get answers about the costs, she said she was bounced between the doctor's office and the hospital billing department. Ahmed submitted a complaint to the Texas attorney general's office, which passed it to the Texas Health and Human Services Commission. She never heard back.

According to Ahmed, a hospital representative suggested her bloodwork might have been coded incorrectly and agreed the charges "were really unusually high," Ahmed said, but she was told there was nothing the hospital could do to change it. The hospital did not comment on the reason behind the high charge. And in a March 7 email, an AdventHealth employee told Ahmed the doctor's office had "no control" over the hospital's billing.

Ahmed filed an appeal with Anthem, but it was denied. The insurance company stated the claims were processed correctly under her benefits, which cover 80% of what the insurer agrees to pay for in-network lab services after she meets her deductible. Ahmed has a $1,400 deductible and a $4,600 out-of-pocket maximum for in-network providers.

"We depend on health care providers to submit accurate billing information regarding what medical care was needed and delivered," Snooks said. Asked about reimbursements to the Texas Health lab, she added, "The claim was reimbursed based on the laboratory's contract with the health plan."

After a KFF Health News reporter contacted Texas Health on Oct. 9, the hospital called Ahmed on Oct. 10 and said it would zero out her bills and remove the charges from collections. Ahmed was relieved, "like a giant burden's just been lifted off my shoulders."

"It's just been fighting this for 10 months now, and it's finally gone," she said.

Texas Health Resources and AdventHealth declined to respond to detailed questions about Ahmed's charges and the tests she was directed to obtain.

"We are sorry Ms. Ahmed did not get clarity on her care with us. Our top priority is to provide our patients with safe, effective and medically appropriate care," Laura Shea, a spokesperson for the hospital, said in an emailed statement.

The Takeaway: Ahmed's problem demonstrates the pitfalls of using a hospital lab for routine testing.

For standard bloodwork "it's really hard to argue that there's a quality difference" between independent labs and hospitals that would warrant higher prices, Chang said. That holds true for other services, too, like imaging. "There's nothing special about the machines that hospitals use for a CT or MRI scan. It's the same machine."

Broadly, state and federal lawmakers are paying attention to this issue. Congress is considering legislation that would equalize payments for certain services regardless of whether they are provided in a hospital outpatient department or a doctor's office, although not lab services. Hospitals have tried to fend off such a policy, known as "site-neutral payments."

For example, the Lower Costs, More Transparency Act would require the same prices under Medicare for physician-administered drugs regardless of whether they're given in a doctor's office or an off-campus hospital outpatient department. That bill also would require labs to make public the prices they charge Medicare for tests. Another bill, the Bipartisan Primary Care and Health Workforce Act, would ban hospitals from charging commercial health plans some facility fees — which they use to cover operating or administrative expenses.

According to the National Conference of State Legislatures, Colorado, Connecticut, Ohio, New York, and Texas have limited providers' ability to charge privately insured patients facility fees for certain services. Colorado, Connecticut, Maryland, and New York require health facilities to disclose facility fees to patients before providing care; Florida instituted similar requirements for free-standing emergency departments.

Patients should keep copies of itemized bills and insurance statements. While not the only evidence, those documents can help patients avoid out-of-pocket costs for recommended preventive screenings.

For now, patients can proactively avoid such extreme bills: When your doctor says you need blood tests, ask that the requisition be sent to a commercial lab like Labcorp or Quest Diagnostics that is in your network and have the tests done there. If they can't do it electronically, ask for a paper requisition.

"Don't always just go to the lab that your doctor recommends to you," Corlette said.

Stephanie O'Neill reported the audio story.

Bill of the Month is a crowdsourced investigation by KFF Health News and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it!

Rachana Pradhan: rpradhan@kff.org, @rachanadpradhan

Highly profitable facilities often charge $5,000 a month or more and then layer on fees at every step.

This article was published on Monday, November 20, 2023 in KFF Health News.

By Jordan Rau

Assisted living centers have become an appealing retirement option for hundreds of thousands of boomers who can no longer live independently, promising a cheerful alternative to the institutional feel of a nursing home.

But their cost is so crushingly high that most Americans can't afford them.

These highly profitable facilities often charge $5,000 a month or more and then layer on fees at every step. Residents' bills and price lists from a dozen facilities offer a glimpse of the charges: $12 for a blood pressure check; $50 per injection (more for insulin); $93 a month to order medications from a pharmacy not used by the facility; $315 a month for daily help with an inhaler.

The facilities charge extra to help residents get to the shower, bathroom, or dining room; to deliver meals to their rooms; to have staff check-ins for daily "reassurance" or simply to remind residents when it's time to eat or take their medication. Some even charge for routine billing of a resident's insurance for care.

"They say, 'Your mother forgot one time to take her medications, and so now you've got to add this on, and we're billing you for it,'" said Lori Smetanka, executive director of the National Consumer Voice for Quality Long-Term Care, a nonprofit.

About 850,000 older Americans reside in assisted living facilities, which have become one of the most lucrative branches of the long-term care industry that caters to people 65 and older. Investors, regional companies, and international real estate trusts have jumped in: Half of operators in the business of assisted living earn returns of 20% or more than it costs to run the sites, an industry survey shows. That is far higher than the money made in most other health sectors.

Rents are often rivaled or exceeded by charges for services, which are either packaged in a bundle or levied à la carte. Overall prices have been rising faster than inflation, and rent increases since the start of last year have been higher than at any previous time since at least 2007, according to the National Investment Center for Seniors Housing & Care, which provides data and other information to companies.

There are now 31,000 assisted living facilities nationwide — twice the number of skilled nursing homes. Four of every five facilities are run as for-profits. Members of racial or ethnic minority groups account for only a tenth of residents, even though they make up a quarter of the population of people 65 or older in the United States.

A public opinion survey conducted by KFF found that 83% of adults said it would be impossible or very difficult to pay $60,000 a year for an assisted living facility. Almost half of those surveyed who either lived in a long-term care residence or had a loved one who did encountered unexpected add-on fees for things they assumed were included in the price.

Assisted living is part of a broader affordability crisis in long-term care for the swelling population of older Americans. Over the past decade, the market for long-term care insurance has virtually collapsed, covering just a tiny portion of older people. Home health workers who can help people stay safely in their homes are generally poorly paid and hard to find.

And even older people who can afford an assisted living facility often find their life savings rapidly drained.

Unlike most residents of nursing homes, where care is generally paid for by Medicaid, the federal-state program for the poor and disabled, assisted living residents or their families usually must shoulder the full costs. Most centers require those who can no longer pay to move out.

The industry says its pricing structures pay for increased staffing that helps the more infirm residents and avoids saddling others with costs of services they don't need.

Prices escalate greatly when a resident develops dementia or other serious illnesses. At one facility in California, the monthly cost of care packages for people with dementia or other cognitive issues increased from $1,325 for those needing the least amount of help to $4,625 as residents' needs grew.

"It's profiteering at its worst," said Mark Bonitz, who explored multiple places in Minnesota for his mother, Elizabeth. "They have a fixed amount of rooms," he said. "The way you make the most money is you get so many add-ons." Last year, he moved his mother to a nonprofit center, where she lived until her death in July at age 96.

LaShuan Bethea, executive director of the National Center for Assisted Living, a trade association of owners and operators, said the industry would require financial support from the government and private lenders to bring prices down.

"Assisted living providers are ready and willing to provide more affordable options, especially for a growing elderly population," Bethea said. "But we need the support of policymakers and other industries." She said offering affordable assisted living "requires an entirely different business model."

Others defend the extras as a way to appeal to the waves of boomers who are retiring. "People want choice," said Beth Burnham Mace, a special adviser for the National Investment Center for Seniors Housing & Care. "If you price it more à la carte, you're paying for what you actually desire and need."

Yet residents don't always get the heightened attention they paid for. Class-action lawsuits have accused several assisted living chains of failing to raise staffing levels to accommodate residents' needs or of failing to fulfill billed services.

"We still receive many complaints about staffing shortages and services not being provided as promised," said Aisha Elmquist, until recently the deputy ombudsman for long-term care in Minnesota, a state-funded advocate. "Some residents have reported to us they called 911 for things like getting in and out of bed."

'Can You Find Me a Money Tree?'

Florence Reiners, 94, adores living at the Waters of Excelsior, an upscale assisted living facility in the Minneapolis suburb of Excelsior. The 115-unit building has a theater, a library, a hair salon, and a spacious dining room.

"The windows, the brightness, and the people overall are very cheerful and very friendly," Reiners, a retired nursing assistant, said. Most important, she was just a floor away from her husband, Donald, 95, a retired water department worker who served in the military after World War II and has severe dementia.

She resisted her children's pleas to move him to a less expensive facility available to veterans.

Reiners is healthy enough to be on a floor for people who can live independently, so her rent is $3,330 plus $275 for a pendant alarm. When she needs help, she's billed an exact amount, like a $26.67 charge for the 31 minutes an aide spent helping her to the bathroom one night.

Her husband's specialty care at the facility cost much more: $6,150 a month on top of $3,825 in rent.

Month by month, their savings, mainly from the sale of their home, and monthly retirement income of $6,600 from Social Security and his municipal pension, dwindled. In three years, their assets and savings dropped to about $300,000 from around $550,000.

Her children warned her that she would run out of money if her health worsened. "She about cried because she doesn't want to leave her community," Anne Palm, one of her daughters, said.

In June, they moved Donald Reiners to the VA home across the city. His care there costs $3,900 a month, 60% less than at the Waters. But his wife is not allowed to live at the veterans' facility.

After nearly 60 years together, she was devastated. When an admissions worker asked her if she had any questions, she answered, "Can you find me a money tree so I don't have to move him?"

Heidi Elliott, vice president for operations at the Waters, said employees carefully review potential residents' financial assets with them, and explain how costs can increase over time.

"Oftentimes, our senior living consultants will ask, 'After you've reviewed this, Mr. Smith, how many years do you think Mom is going to be able to, to afford this?'" she said. "And sometimes we lose prospects because they've realized, 'You know what? Nope, we don't have it.'"

Potential Buyers From the Bahamas

For residents, the median annual price of assisted living has increased 31% faster than inflation, nearly doubling from 2004 to 2021, to $54,000, according to surveys by the insurance firm Genworth. Monthly fees at memory care centers, which specialize in people with dementia and other cognitive issues, can exceed $10,000 in areas where real estate is expensive or the residents' needs are high.

Diane Lepsig, president of CarePatrol of Bellevue-Eastside, in the Seattle suburbs, which helps place people, said that she has warned those seeking advice that they should expect to pay at least $7,000 a month. "A million dollars in assets really doesn't last that long," she said.

Prices rose even faster during the pandemic as wages and supply costs grew. Brookdale Senior Living, one of the nation's largest assisted living owners and operators, reported to stockholders rate increases that were higher than usual for this year. In its assisted living and memory care division, Brookdale's revenue per occupied unit rose 9.4% in 2023 from 2022, primarily because of rent increases, financial disclosures show.

In a statement, Brookdale said it worked with prospective residents and their families to explain the pricing and care options available: "These discussions begin in the initial stages of moving in but also continue throughout the span that one lives at a community, especially as their needs change."

Many assisted living facilities are owned by real estate investment trusts. Their shareholders expect the high returns that are typically gained from housing investments rather than the more marginal profits of the heavily regulated health care sector. Even during the pandemic, earnings remained robust, financial filings show.

Ventas, a publicly traded real estate investment trust, reported earning revenues in the third quarter of this year that were 24% above operating costs from its investments in 576 senior housing properties, which include those run by Atria Senior Living and Sunrise Senior Living.

Ventas said the prices for its services were affordable. "In markets where we operate, on average it costs residents a comparable amount to live in our communities as it does to stay in their own homes and replicate services," said Molly McEvily, a spokesperson.

In the same period, Welltower, another large real estate investment trust, reported a 24% operating margin from its 883 senior housing properties, which include ones operated by Sunrise‌, Atria, Oakmont Management Group, and Belmont Village.‌ Welltower did not respond‌‌ to requests for comment.

The median operating margin for assisted living facilities in 2021 was 23% if they offered memory care and 20% if they didn't, according to David Schless, chief executive of the American Seniors Housing Association, a trade group that surveys the industry each year.

Bethea said those returns could be invested back into facilities' services, technology, and building updates. "This is partly why assisted living also enjoys high customer satisfaction rates," she said.

Brandon Barnes, an administrator at a family business that owns three small residences in Esko, Minnesota, said he and other small operators had been approached by brokers for companies, including one based in the Bahamas. "I don't even know how you'd run them from that far away," he said.

Rating the Cost of a Shower, on a Point Scale

To consistently get such impressive returns, some assisted living facilities have devised sophisticated pricing methods. Each service is assigned points based on an estimate of how much it costs in extra labor, to the minute. When residents arrive, they are evaluated to see what services they need, and the facility adds up the points. The number of points determines which tier of services you require; facilities often have four or five levels of care, each with its own price.

Charles Barker, an 81-year-old retired psychiatrist with Alzheimer's, moved into Oakmont of Pacific Beach, a memory care facility in San Diego, in November 2020. In the initial estimate, he was assigned 135 points: 5 for mealtime reminders; 12 for shaving and grooming reminders; 18 for help with clothes selection twice a day; 36 to manage medications; and 30 for the attention, prompting, and redirection he would need because of his dementia, according to a copy of his assessment provided by his daughter, Celenie Singley.

Barker's points fell into the second-lowest of five service levels, with a charge of $2,340 on top of his $7,895 monthly rent.

Singley became distraught over safety issues that she said did not seem as important to Oakmont as its point system. She complained in a May 2021 letter to Courtney Siegel, the company's chief executive, that she repeatedly found the doors to the facility, located on a busy street, unlocked — a lapse at memory care centers, where secured exits keep people with dementia from wandering away. "Even when it's expensive, you really don't know what you're getting," she said in an interview.

Singley, 50, moved her father to another memory care unit. Oakmont did not respond to requests for comment.

Other residents and their families brought a class-action lawsuit against Oakmont in 2017 that said the company, an assisted living and memory care provider based in Irvine, California, had not provided enough staffing to meet the needs of residents it identified through its own assessments.

Jane Burton-Whitaker, a plaintiff who moved into Oakmont of Mariner Point in Alameda, California, in 2016, paid $5,795 monthly rent and $270 a month for assistance with her urinary catheter, but sometimes the staff would empty the bag just once a day when it required multiple changes, the lawsuit said.

She paid an additional $153 a month for checks of her "fragile" skin "up to three times a day, but most days staff did not provide any skin checks," according to the lawsuit. (Skin breakdown is a hazard for older people that can lead to bedsores and infections.) Sometimes it took the staff 45 minutes to respond to her call button, so she left the facility in 2017 out of concern she would not get attention should she have a medical emergency, the lawsuit said.

Oakmont paid $9 million in 2020 to settle the class-action suit and agreed to provide enough staffing, without admitting fault.

Similar cases have been brought against other assisted living companies. In 2021, Aegis Living, a company based in Bellevue, Washington, agreed to a $16 million settlement in a case claiming that its point system — which charged 64 cents per point per day — was "based solely on budget considerations and desired profit margins." Aegis did not admit fault in the settlement or respond to requests for comment.

When the Money Is Gone

Jon Guckenberg's rent for a single room in an assisted living cottage in rural Minnesota was $4,140 a month before adding in a raft of other charges.

The facility, New Perspective Cloquet, charged him $500 to reserve a spot and a $2,000 "entrance fee" before he set foot inside two years ago. Each month, he also paid $1,080 for a care plan that helped him cope with bipolar disorder and kidney problems, $750 for meals, and another $750 to make sure he took his daily medications. Cable service in his room was an extra $50 a month.

A year after moving in, Guckenberg, 83, a retired pizza parlor owner, had run through his life's savings and was put on a state health plan for the poor.

Doug Anderson, a senior vice president at New Perspective, said in a statement that "the cost and complexity of providing care and housing to seniors has increased exponentially due to the pandemic and record-high inflation."

In one way, Guckenberg has been luckier than most people who run out of money to pay for their care. His residential center accepts Medicaid to cover the health services he receives.

Most states have similar programs, though a resident must be frail enough to qualify for a nursing home before Medicaid will cover the health care costs in an assisted living facility. But enrollment is restricted. In 37 states, people are on waiting lists for months or years.

"We recognize the current system of having residents spend down their assets and then qualify for Medicaid in order to stay in their assisted living home is broken," said Bethea, with the trade association. "Residents shouldn't have to impoverish themselves in order to continue receiving assisted living care."

Only 18% of residential care facilities agree to take Medicaid payments, which tend to be lower than what they charge self-paying clients, according to a federal survey of facilities. And even places that accept Medicaid often limit coverage to a minority of their beds.

For those with some retirement income, Medicaid isn't free. Nancy Pilger, Guckenberg's guardian, said that he was able to keep only about $200 of his $2,831 monthly retirement income, with the rest going to paying rent and a portion of his costs covered by the government.

In September, Guckenberg moved to a nearby assisted living building run by a nonprofit. Pilger said the price was the same. But for other residents who have not yet exhausted their assets, Guckenberg's new home charges $12 a tray for meal delivery to the room; $50 a month to bill a person's long-term care insurance plan; and $55 for a set of bed rails.

Even after Guckenberg had left New Perspective, however, the company had one more charge for him: a $200 late payment fee for money it said he still owed.

Jordan Rau: jrau@kff.org, @jordanrau