Updated Wednesday, July 26th, 2023

Pre-Admission Fees: A Form of Hidden Costs

Pay special attention to all upfront fees! Some facilities call these an “administrative fee,” “community fee,” or “application fee.” These fees can range from $250 to $5,000. Facilities are permitted to charge for such pre-admission fees if they are clearly stated in the admission agreement. However, facilities cannot charge a security or damage deposit or a cleaning fee.

Ask what each upfront or pre-admission fee covers. Pre-admission fees must be refunded in full (100%) if the resident does not enter the facility and the facility did not perform an appraisal (assessment) or failed to provide a written disclosure of the pre-admission fee charges and refund conditions. Proportional refunds of pre-admission fees in excess of $500 are required: at 80% if the person does not enter the facility but a pre-admission appraisal was done; at 80% if a resident leaves the facility during the first month for any reason; 60% if a resident leaves the facility during the second month; and 40% if a resident leaves the facility during the third month. (Refer to the RCFE Fact Sheet on Refunds for more information.)

Under no circumstances will residents on SSI be charged any pre-admission fee.

Monthly Fees

The cost will depend on a variety of factors such as the type of accommodations (e.g., apartment, private room, shared room), the range of services needed, and the geographic area. The average monthly cost in California is over $3,000 with costs ranging from a low of around $900 a month for a resident on Supplemental Security Income (SSI) to over $5,000 a month for Private Pay.

The facility can charge whatever the market will bear! However, rates must be stated in the Admission Agreement for all services and for increases in services or levels of care. (Refer to RCFE Fact Sheet on Admission Agreements.)

It is common for facilities to charge higher rates for specialized dementia care or for hospice care. Again these charges must be clearly stated in the Admission Agreement.

Rate Increases

Increased charges are often triggered by an assessment of the resident’s needs conducted by the facility, often using a level of care point system. Check carefully the type and frequency of services offered for the fixed rate and how the point system works. For instance, many residents are surprised when they receive charges for more than two showers a week or for having food trays brought to the room when they are sick.

If a facility licensee decides to increase the monthly rate for the facility, or increases the rate structure for the facility, the licensee must give residents or residents’ representatives no less than 60 days prior written notice, with a description of the additional costs, except in the case of an increased rate due to a change in the resident’s care level. The notice will hopefully allow residents more time to find alternate living accommodations if they can’t afford the rate increase. Note: Does not apply to Continuing Care Retirement Communities Assisted Living Care Level.

Under no circumstances can a facility licensee charge a non-recurring lump sum assessment due to the licensee’s unexpected or unavoidable financial obligations. All increases in rates shall be to the monthly rate amortized over a 12-month period.

How to Pay

Private Pay
Most people must pay privately for Residential Care Facilities for the Elderly (RCFE). Long-term care insurance only covers a very small percentage of people.

Medi-Cal
Medi-Cal payment is limited only to the Assisted Living Waiver. However, residents might be eligible for Medi-Cal to pay for such items as health insurance premiums and deductibles, medical equipment or medications.

Assisted Living Waiver (ALW)
The Assisted Living Waiver uses Medi-Cal funds to pay for persons who require nursing home level care to be in Residential Care facilities. (Refer to ALW Fact Sheet.)

The ALW is currently operating in the counties of Alameda, Contra Costa, Fresno, Kern, Los Angeles, Orange, Riverside, Sacramento, San Bernardino, San Diego, San Francisco, San Joaquin, San Mateo, Santa Clara and Sonoma. However, some of the counties in which the ALW program is operating do not currently have any RCFEs participating in the program. For a list of participating RCFEs, see https://www.dhcs.ca.gov/services/ltc/Documents/List-of-RCFE-facilities.pdf

SSI
There is very limited public funding through Supplemental Security Income (SSI) for this level of care. Unfortunately, the SSI rate is so low that fewer and fewer facilities will accept persons on SSI. (Refer to the SSI Fact Sheet.)