This summer, the stately, red brick Loretto Home, a 57-bed residential care facility that had been operating in Rutland since 1904, announced it was closing.
It had survived the 1918 flu outbreak, two world wars, the Great Depression and the 2008 recession. But administrators say the worker shortage brought on by the COVID pandemic was the final straw.
“It was a very difficult decision,” says Mary Beth Pinard, executive director of Vermont Catholic Charities, which operated the facility. “Because this is our residents’ home, and we had a very dedicated staff in that facility. We looked at it lots of different ways financially before making the decision to close.”
Pinard says part of their mission is to care for the underserved. She says approximately 80% of the people they care for are covered by Medicaid, the state-federal health care system for people who can't otherwise afford care.
“But the Medicaid reimbursement rate has been stagnant for years, and it hasn't covered the cost of our care,” Pinard says. “It just wasn’t sustainable.”
The Loretto Home is by no means alone.
Since 2018, 35 licensed residential care facilities in the state that cared for older Vermonters have closed according to the Vermont Department of Disabilities Aging and Independent Living and Vermont Public's own analysis.
The Gary Residence in Montpelier closed its 17-bed residential care facility this year because of flood damage. The Gazebo Apartments in South Burlington closed 40 units for renovations. Staff at both facilities said they plan to reopen. But those and other more permanent closures have resulted in the loss of more than 600 beds.
These closures come as the baby boomer generation, those born between World War II and 1964 — which until recently was the largest population group in the U.S. — ages. And this generation's need for care is growing rapidly in the U.S. and Vermont.
According to the U.S. Department of Health and Human Services, seven out of 10 Americans 65 and older will need long-term care at some point in their lives. One in five people will need it for more than five years.
But few are prepared for the jaw-droppingly high cost of that care.
If you want to move into the Margaret Pratt assisted living community in Bradford, for example, expect to pay between $5,165 and $10,995 per month. If you need memory care, their price jumps to between $8,095 and $11,295 per month.
Linden Health Center, an assisted living facility within the Wake Robin Life Plan Retirement Community in Shelburne, has a buy-in program where residents pay an entrance fee of between $210,000 and $700,000 in addition to monthly costs which range from $3,800 to $8,000 per month.
Long-term care costs represent “the single largest financial risk” facing older adults and their families. That’s according to a 2020 report by the National Council on Aging and UMass Boston researchers.
Eight new residential care facilities for older Vermonters have opened across the state since 2018. They've added more than 330 beds and all are sorely needed. But of the eight, only three currently accept Medicaid: Margaret Pratt Assisted Living which is licensed for 48 beds, Valley View at Cottage Street, an 11-bed memory care facility in Bradford and the Gary Residence, an 18-bed memory care facility that just opened in Montpelier.
The other five residential care facilities are private pay, meaning residents pay for their care out of pocket or with costly long-term care insurance policies.
Vermont Public's analysis showed just under 80% of residential care facilities in the state that care for older adults accept Medicaid, but most had a cap on how many Medicaid-funded residents they would care for.
Some also require residents to pay out of pocket for a minimum of 12, 24 or 36 months before they are able to qualify for assistance.
As the cost for residential care continues to rise and the number of Medicaid beds available declines, advocates say it leaves fewer options for low- and middle-income Vermonters who need care.
"It's a crisis," says Rosemary Greene, who's the executive director of the Southwestern Vermont Council on Aging. "Everyone ages. We all have parents, everybody has aunts and uncles who are aging ... There are very limited resources for an aging person if something should happen, and we've got to figure this out. And we need to figure it out soon, because people are living longer. And when we start taking a look at our 85-year-olds, our 90-year-olds, 100-year-olds, we need options for them."
Cyndie Clark, for example, has been living in the same tidy house in Rutland that she moved into in 1971.
“I started teaching in 1968. I took a few years off to have my family, but all together, I spent 38 years in education, 25 of them in the classroom,” the now 77-year-old says.
Clark has been divorced for more than 40 years, and she has two grown children who live out of state.
“At first, they were pretty hesitant to talk about me getting older, but they've come around a little more now,” she says. “They know that I want to stay here as long as I can.”
Clark says she’s talked to a financial advisor about transferring her assets to her children when the time comes.
As to what happens when she can’t live on her own anymore: “I probably should be more concerned than I am. No one likes looking down the barrel,” she says with a laugh. “I mostly fantasize, you know, I picture myself in some nice little two-or-three-room place with the breeze blowing through the curtains at the windows and ... no plan on how to get there.”
Medicaid or private pay?
Married couples tend to think their spouse will take care of them as they age. After one dies, the surviving spouse often thinks their children will do the caregiving. Kids often think Medicare will take care of everything. It won't.
While Medicare is the federally-funded health insurance program for Americans 65 and older, it does not cover most long-term care. Medicare will pay for a home aide or a stay in a nursing home for a limited time during a recovery from a surgery, a fall or for short-term rehabilitation.
But the majority of long-term care, including nursing home care, that older adults rely on for months or years is paid for by Medicaid. And every residential care home administrator that Vermont Public spoke to says, historically, Medicaid’s daily reimbursement rates have not kept up with rising costs. A recent report spelled that out to state legislators.
Vermont lawmakers tried to address the shortfall and boosted the daily Medicaid reimbursement rate by 79% beginning July 1, 2023.
“We went from $47.25 a day to $84.66 a day,” says Kim Fitzgerald, CEO of Cathedral Square, a nonprofit that owns, manages and develops affordable housing for older and disabled people in Chittenden, Franklin, and Grand Isle counties. “That’s the great news, and it’s incredible that that got put into the budget and it got passed."
Besides raising the daily Assistive Community Care Services rate, (ACCS) lawmakers also also increased the Enhanced Residential Care (ERC) rate by 4%.
Facility administrators we spoke to applaud those increases and say they were desperately needed.
Most also say they were too little, too late.
“Don’t get me wrong, this year’s increase was a good thing,” says Helen Labun, executive director of the Vermont Health Care Association, the largest advocacy group in the state for Vermont’s residential nursing, assisted living and residential care homes.
“But it’s a very volatile marketplace right now in terms of the cost of services,” Labun says. “If you're looking at long-term care residential providers, like who I represent, once someone is in your residence, they're in your residence, that's an ongoing commitment. So if you don’t know that the rates will continue to keep pace, you’ll always be at financial risk.”
Long-term care is also heavily regulated, and Labun says as licensing rules get more complicated and costly to comply with, it’s becoming increasingly difficult — especially for small providers — to keep up.
In fact, the state is holding public hearings in January on proposed revisions to Vermont's residential care home and assisted living licensing regulations. Advocates say these changes will further impact providers.
All of this may be why five of the eight new long-term care facilities for older people that have opened in Vermont in the last six years operate on a private pay basis, bypassing Medicaid, at least for now.
The private pay rates at facilities across Vermont vary significantly depending on the living quarters, amenities and the level of care needed — but the annual bills are eye-popping and prices are not always listed.
According to Vermont Public's research, paying for a year of residential care out of pocket can cost anywhere from $34,800 (for enhanced independent living with the lowest level of services at Chestnut Place in Berlin) to $126,000 (for the highest rate and service level at The Village at White River Junction). Most facilities have a base rate which goes up depending on the care and services needed.
And those are just this year's numbers.
"Had you called and asked me for my price list last year at this time, it would have been about 14% lower," says Bob Scerbo, sales and marketing director of Brookdale Senior Living in Bennington. He says their facility offers 77 independent and assisted living apartments and 24 memory care beds.
"Next year at this time, our prices will probably be seven to 9% higher," he says.
A no-win 'donut hole'
Those costs leave many middle-income Vermonters in a no-win 'donut hole'. They don't have enough savings to pay for care out of pocket. But they have too much to qualify for Medicaid, which in Vermont, requires an individual to be almost destitute, with less than $2,000 in assets and a monthly income less than $2,742.
According to AARP, 38% of Vermonters 65 and older rely on Social Security for at least half their retirement income. For 17% of Vermonters in that age group, it makes up nearly all their income.
The average Social Security benefit for a retired worker in Vermont is $1,872. That's after an 8.7% cost-of-living boost this year. An additional 3.2% increase is planned for 2024. Despite that, Social Security benefits for most Vermonters 65 and older next year will still be less than $2,000 per month.
And most people have not saved enough for retirement.
According to 2022 Federal Reserve data, almost half of American households had no savings in retirement accounts. Meanwhile 26% had saved more than $100,000, and just 9% had more than $500,000.
Advocates for older Vermonters say people also need to consider what they’ll do if their financial picture changes.
Kim Fitzgerald, CEO of Cathedral Square, says she’s seen this happen a number of times.
“But one in particular, where a mom retired with a half million dollars to her name," Fitzgerald says. "And in this day and age, we all thought that was, you know, good. And unfortunately she came down with dementia, and she moved into one of these communities where it was $12,000 a month in her case. And they came and said to her, 'You only have $10,000 or $11,000 left in your bank account … and you will not be able to afford next month's payment. You're going to have to find other housing.'”
Angela Smith-Dieng, of Vermont’s Department of Disabilities, Aging and Independent Living, says unfortunately, this can happen. There is a formal discharge process required by the state in those circumstances.
“In some cases, a discharge can happen if the care needs exceed what the facility is licensed or able to provide,” she says. “In other instances, it can be that the individual can no longer pay, and the facility does not accept Medicaid.”
Smith-Dieng adds: “It’s why it’s really important for people to be aware of a facility’s discharge policy when you sign an initial contract. Because they differ from place to place.”
“If people have money, they have more options,” says Sharon Decato, a registered nurse and case manager with Rutland Regional Medical Center. “If they don’t, finding affordable residential care is really hard."
Decato’s job is to help people find the care and services they need.
"Just about every day someone will come into my office and say, ‘You know, mom's living alone,' maybe dad just passed away or something," she says. "The family is seeing that things are declining, memory might be a little off, physically can't-do-what-she-used-to-be-able-to-do-type thing. They're concerned and want to know, what are the options?”
Decato says often the first step is to try to provide care and services for people in their home, which is where most people want to remain. Would Meals on Wheels help? Does mom or dad need someone to do light housework or help with showering? Or do they have more serious health issues that require a visiting nurse?
She says finding those supports can also be challenging, because home health and personal aides are costly and in short supply, just as they are in residential care facilities. The situation is putting increasing pressure on unpaid family caregivers who may have to leave their jobs, move or work part-time to care for a loved one.
Decato says there comes a point when living at home just doesn’t work anymore. And with facilities across the state closing, that means more families will have to travel to see a loved one.
“Having so many facilities closing their doors — three in Rutland County alone in the last year or so — has made finding that next level of care a lot harder,” Decato says.
She and other experts say if you have an aging relative you’re worried about, start the conversation about long-term care sooner rather than later. Ask them about their financial situation, learn about the facilities in your area and do your homework.
Make sure you know what your loved one needs. That may mean spending a few days observing so you have a realistic picture. Is dad having trouble cooking? Is he more confused or unsteady on his feet? Is mom forgetting to take her medications or becoming too isolated?
Staffing shortages abundant
When it comes to residential care facilities closing, everyone interviewed for this story agreed that staffing shortages were at the heart of this problem.
“We’re really in a crisis in the state of Vermont with our nursing shortage,” says Mary Beth Pinard, with Vermont Catholic Charities. “We’ve had to bring in traveling nurses or agency nurses for the past several years, and there’s a high cost associated with that which has impacted all of our facilities.”
It’s the same challenge that hospitals have been facing in recent years.
“Overnight staff and overnight on weekends is especially hard to find,” says Kim Fitzgerald with Cathedral Square. “When you're paying [temporary] agency staff three times what you'd pay your own staff, it financially doesn't work.”
There’s also the well-documented mental and emotional toll the pandemic has taken on health care workers and personal aids.
“People are so tired in health care,” says Jennifer Doyle, who has owned the Riverbend Care Home in Chelsea for nearly 19 years. The facility is licensed to care for up to 22 residents.
“It's a constant struggle to juggle rising food costs, heating fuel, property and liability insurance and other expenses," Doyle says. Even with the newly increased Medicaid reimbursement rate, she says she’s still not able to provide health benefits to her staff.
“Health insurance for 20 employees would cost me $20,000 a month, and that’s just not something I can afford to pay right now, which makes it really challenging to employ people,” Doyle says. "I mean, would you go work at Walmart or would you go work at Riverbend Care Home? Socially you'd probably really rather take care of people. But the fact is you need Walmart or Burger King to give you your health insurance."
Doyle's philosophy is to take care of everyone, which means a significant part of Riverbend's income comes from Medicaid.
“When you make a choice to accept Medicaid residents into your home, you're making a choice to take less funding,” she says.
Where to go from here
For some Vermont families, the lack of affordable residential care may force an old-fashioned solution where — like it or not — multiple generations live together. Some older Vermonters with extra space may opt to rent out a room or use an organization like HomeShare Vermont, which helps people share a home for mutual benefit. The current housing shortage may make options like those more appealing and necessary.
In some parts of the state, older Vermonters themselves are taking action. In Brattleboro, for example, a retired hospital CEO, a retired doctor and a retired dentist who served on the board of a local assisted living facility created Windham Aging, a collaboration of organizations working to bolster support and health systems for older Vermonters in their community.
The Queen City formed the Burlington Aging Council to draft policy and address gaps, needs, and opportunities that impact older adults in the city.
And state officials have a new roadmap called Age Strong Vermont that highlights the need for a wider range of housing options and more affordable residential care facilities for older Vermonters.
“I think we have a lot of work to do,” says Angela Smith-Dieng of the Department of Disabilities Aging and Independent Living. “I recognize that it's really difficult for people right now. And that the system is not meeting all of the needs of people, whether we're talking about long-term care facilities, or we're talking about people's needs at home. It's a really challenging time, given the workforce shortage and the housing shortage.”
But Smith-Dieng says she’s hopeful that with the many strategies and recommendations laid out by the state's roadmap, with continued local activism, and the support of lawmakers who approved the sizable increase to the Medicaid reimbursement rate, that the situation will stabilize.
Jerett Turnbaugh hopes so. He and his wife just purchased the Loch Lomond Care Home in North Concord.
"We're small, just 16 residents, and I'm here every weekend." Turnbaugh says. "This job is very hands on, but it's so rewarding. I mean these people are like my grandparents. They need us."
Residential care terminology, explained
Senior apartments: These are typically restricted to people 55 and older and may include age-friendly features such as grab bars and limited stairs. Some may be subsidized, enabling residents to qualify for reduced rent. Some also have case managers who can help residents access services like Meals on Wheels or visiting nurses. Most residents live independently.
Residential care home (RCH): These facilities serve three or more residents who are unrelated to the owner and may feel more home-like and communal. They can have private or shared bedrooms. Residents may also share a bathroom, kitchen and other living space. In Vermont, residential care homes are licensed as either Level III or Level IV. Both levels must provide room and board, assistance with personal care, general supervision and/or medication management. Level III homes must also provide nursing supervision.
Assisted living residence (ALR): Residents typically have their own apartment or suite with access to round-the-clock clinical care, three meals a day in a dining room and medication management. Residents who need it can also get help with bathing and dressing.
Level III Care: Sometimes referred to as "enhanced assisted living," this is typically the highest level of care available in an assisted living/residential care facility. This type of care includes extensive hands-on assistance with multiple activities throughout the day, such as toileting, bathing and communicating. Residents who need this level of care often have multiple physical disabilities, and may have mild to moderate memory loss.
Memory care: Some assisted living facilities and residential care homes also have secured areas that provide specialized care for residents with dementia or Alzheimer’s disease.
Nursing homes: Also called "skilled nursing facilities," they provide a wide range of health and personal care services and focus more on medical care than most assisted living facilities or residential care homes. Services in these Level I and Level II facilities typically include nursing care, 24-hour supervision, three meals a day, and assistance with everyday activities. Rehabilitation services, such as physical, occupational, and speech therapy, are also available.
Assistive Community Care Services (ACCS): These are bundled services like: case management, personal care, nursing, assistive therapies and medicine management that are funded through Medicaid for eligible Vermonters who live in licensed participating Level III residential care homes or assisted living residences.
Enhanced Residential Care (ERC): Enhanced Residential Care includes a package of services for Choices for Care (Medicaid) participants who live in licensed and participating residential care or assisted living facilities. Services include: case management, at least two hours per day of personal care, nursing assessment and oversight, medication management, social activities, 24/7 on-site supervision, laundry and house cleaning.
Choices for Care: This is Vermont’s Medicaid program that provides long-term care services and supports to eligible older people where they want to receive it ie: in their own home, in someone else’s home, or in a licensed residential care facility or nursing home. Not all long-term care facilities in the state accept the program.
Have questions, comments or tips? Send us a message or reach out to reporter Nina Keck: