With its views of the Rincon Mountains and nine large, adobe-style homes, the Villas at Houghton looks more like an upscale gated neighborhood than a community of frail and cognitively impaired seniors.

Each 6,100-square-foot home houses 10 people and two caregivers, all in private rooms with private bathrooms, a chef preparing daily meals and a menu of daily activities. There’s a hair salon, aromatherapy, fitness, pet therapy, massages and weekly parties with live entertainment that often turn into sing-alongs.

The cost for staying in what owners from for-profit Tucson-based Innovative Senior Living call a “memory care neighborhood” starts at $52,750 per year. The vast majority of residents pay cash.

The Villas at Houghton is not the most expensive facility of its kind. In Tucson, high-level, long-term care for people with Alzheimer’s disease and other forms of dementia can run more than $100,000 per year. The costs are a surprise to many families, who incorrectly assume that Medicare will cover the expense of out-of-home are.

And while some low-income, disabled seniors will qualify to have their expenses covered by the Arizona Long Term Care System (ALTCS), many facilities, including the Villas at Houghton, don’t accept it.

Don’t count on Medicare

The median annual cost for a private room in a skilled nursing facility in Tucson last year was $90,896, and for assisted living it was $45,000, says Genworth Financial Inc., a Fortune 500 company that sells long-term care insurance. In its 2015 annual Cost of Care survey, Genworth found that Americans paid approximately $16,060 more per year in 2015 for a nursing home than they paid in 2010.

Medicare, the federal government insurance program for Americans over the age of 65, does not pay for long-term care, including home care, aside from 100 days skilled services or rehabilitative care.

Families must then contend with how to pay. The options include long-term care insurance, public assistance through ALTCS (or other similar Medicaid programs for people over 65 in other states), Veterans Aid, or private pay.

“The bottom line is, everything is driven by finances, and what they can afford and what they need can be two different things,” says Amanda Gelatt, owner of A Senior Journey, which is a local senior-living placement service.

“If someone can afford it, I always trying to get then into a memory-care facility. There are a lot of positive things to be said about those places. They can tell me what they want, but the bottom line is what you can afford.”

On average, an American turning 65 today will incur $138,000 in future long-term services, which could be financed by setting aside $70,000 today, says a July research brief by Melissa Favreault of the Urban Institute and Judith Dey of the U.S. Department of Health and Human Services.

About 17 percent will spend at least $100,000 on long-term services and supports, Favreault and Dey wrote.

Making a plan

Having dementia raises costs because of the need for round-the-clock care and a locked home or facility. And the disease can last anywhere from two to 20 years.

“It is a longitudinal disorder with immense cost to of course the individual suffering, but in terms of caregiver costs, hospitalizations, skilled nursing facilities, home-health services, day-care services for adults, assisted living — if you add up all that and account for lost productivity, the cost to society is enormous,” says Dr. Hemant S. Kudrimoti, a neurologist at the Carondelet Neurological Institute.

The hardest part for Robin Svejcara, whose husband, Bob Svejcara, has Alzheimer’s disease, is thinking of what’s coming and the “frightening prospect of the cost involved.”

“A year or two ago, you look at your savings and say, ‘We’re in great shape,’ Bob says. “Next thing you know, you’ve just lost 60 percent of your money.”

The couple hired a financial adviser years ago, which has relieved some financial stress.

Having a plan can be a great relief to families — but making one can be too much for some to handle.

Even as she faces caring for an adult son with Down syndrome and a husband with both Alzheimer’s and Parkinson’s diseases, Maria Gonzales has been unable to convince her husband to plan for what’s coming.

“I’ve set up an appointment with a lawyer to start advance planning,” Maria says. “We have talked it over, but for some reason he doesn’t want to do it, like power of attorney and what kind of funeral he wants. It worries me because I want to know what he wants so I can do what’s best for him. It’s hard because he doesn’t open up about that.”

Qualifying for assistance

When it comes to paying for care, Tucson elder-law attorney Paul Bartlett says many people incorrectly assume they have too much money to qualify for ALTCS (Medicaid), the government assistance program for low-income, disabled seniors. It’s worth researching whether you or your loved one qualify, he says, since ALTCS can help pay for both in-home and out-of-home care.

Applicants for ALTCS must be medically eligible, which means they need to be cognitively impaired or unable to perform at least two activities of daily living on their own, such as bathing and eating.

Single applicants can have resources of no more than $2,000. Applicants with more than $2,000 could consider setting up a burial fund, or buying a house or car — all three are exempt.

The gross monthly income limit is $2,199 for an individual, but someone with a higher income could set up what is called a Miller Trust for the money above that limit, Bartlett says.

“It’s really hard to have too much in the way of income and not be able to get help,” he says. “The Miller Trust would enable you to qualify even if you have a higher income.”

For married couples where only one partner is applying to ALTCS, the income limit is either $2,199 for the applicant, or an average of the two spouses, whichever standard is more favorable to the applicant.

So the spouse with dementia might have a monthly income of $4,000 and still qualify if her spouse’s monthly income were $300, for example, Bartlett says.

Congress has set a five-year look-back period on gifts, so someone who gives money and other assets to children and other family members in order to be ALTCS eligible must do it five years before applying. The Pima Council on Aging holds monthly classes on how to apply for ALTCS.

A single person whose resources are too high to qualify for ALTCS could spend down those resources on long-term care or on any legitimate expense that benefits either the applicant or the spouse, and then apply.

“You can apply for ALTCS and get turned down as many times in life as you need to,” Bartlett says.

The drawback to using ALTCS for out-of-home care is you are essentially a ward of the state. Not all facilities and adult assisted-living care homes accept ALTCS, particularly if they are for-profit. And most of the newer memory-care facilities in Tucson — like the Villas at Houghton — are for-profit.

Also, the ALTCS reimbursement rate is low, so those using the program at an adult-care facility may have to have a roommate.

Long-term insurance

For people whose incomes are too high to qualify for ALTCS, there’s long-term insurance or self-pay.

The number of long-term insurance companies nationwide has declined, but the ones that remain are well-regulated and worth considering, says John Stephens, a partner with TCI Wealth Advisors in Tucson.

Typically with long-term insurance, the buyer defines a monthly amount they’d like to get for a set number of years. For example, a couple could each choose a $2,000 benefit for five years. So they’d have access to a maximum $125,000, Stephens says. Buyers may have to supplement with their own money.

Stephens says the optimal time to purchase long-term care insurance is when buyers are in their mid-50s to early 60s.

“If you wait longer you might have a medical condition come up and you would fail the underwriting,” he says.

Annual premiums vary. Stephens does not sell long-term insurance, but recently helped a client, a 57-year-old woman in good health, get long-term-care insurance for $1,700 per year.

The policy guarantees that woman $5,000 per month for five years if she needs it. The policy she purchased does not have a cost-of-living adjustment, which means her annual premiums are significantly lower, and because the insurance company doesn’t need to worry about increasing costs, the cost is less likely to increase down the road.

But anyone buying long-term insurance should expect premiums to go up every five years. Long-term insurance premiums are not fixed like term life, so some clients have been shocked by large premium hikes, and as a result discontinued coverage, Stephens said.

Long-term-care insurance has drawbacks, and only a minority of older Americans have it. Only 15 to 20 percent of the people at the Villas at Houghton are covered through long-term care insurance, says Robert S. Larson, president and owner of Innovative Senior Living Operations Inc.

“Most people pay through their savings, pensions, selling their house,” Larson says.

If you do buy long-term care, read the policy carefully. Gelatt, of A Senior Journey, recently had a client whose policy does not cover assisted living, only home care. The rate for home care was $80 per day — far less than he needed for 24/7 monitoring of his wife. So he opted to pay cash for assisted living.

Hidden costs

Many families want to keep their loved ones at home, but if patients need round-the-clock care, the cost of in-home care actually exceeds that of a room in most memory-care centers.

Assisted-living and skilled-

nursing-facility prices are typically all-inclusive, but there can be added costs with that, too. Personal-care items typically must be purchased, for example.

For families with the resources, Anne Morrison of TMC Senior Services recommends sending your own caregiver to the facility. Since people with dementia are for the most part defenseless to bad care, the more reinforcement the better, she says.

Once a loved one is in assisted living, his or her need for caregiving does not stop, says Mary Petrosky, whose 95-year-old mother went into an adult-care home a year ago.

Petrosky, a 68-year-old retired U.S. Navy nurse, cared for her mother at home for 10 years — a 24/7 job. But after Mary Ann Petrosky fell six times in three weeks, her daughter knew she had to do something. With help from a locater service she found through the Pima Council on Aging, she got a bed in a secure assisted-living home for her mother, who has advanced Alzheimer’s disease.

Petrosky visits three or four times per week and makes sure her mother has enough clothes and covers on her bed, and that she’s eating well. She acts as an advocate for her mother’s care.

Though she’s had to dip into savings to pay for care, Petrosky says the true cost has been emotional.

“I never thought she’d need to move out,” Petrosky says. “And she didn’t want to go to assisted living. But she didn’t raise a fuss. She knew she was in a different place and she was confused. ...To this day, to tell my mom what to do is hard.

“It’s an awful disease.”