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Serena Senior Care started out as a domestic service in 2007 – it would send nurses and other assistance to the homes of the elderly in Baja California.
Many of its clients were Americans who had decided to retire in Mexico, where they could afford a beach-front home. Various estimates and surveys over the past several years put the number of American retirees in Mexico anywhere between 300,000 and 1 million.
Soon, said Serena’s Chairman Flavio Olivieri, Serena’s clients and their families started asking for something more – a facility where they could stay and receive the care they needed once they weren’t fit enough to stay in their own homes.
“They began to ask us for a permanent place,” Olivieri said in Spanish.
In 2008, Serena opened its first assisted-living facility, which houses people with disabilities or other illnesses who can’t or don’t want to live independently, in northern Rosarito.
Roughly 75 percent of the clientele in that facility are American, estimates Serena executive director Miguel Angel Torres, and the facility is at the forefront of what could become a growing trend in Southern California senior care.
San Diego’s high housing costs don’t just impact our ability to rent our own apartments or purchase our own homes. They also raise the costs of assisted-living facilities, nursing homes and other care facilities. Baja is already a source of affordable housing for the San Diego region. Its lower health care, labor and real estate costs and proximity to the U.S. makes catering to California’s seniors a no-brainer business investment to many.
A comparison of Serena’s costs to similar facilities in San Diego, using data from the Genworth 2016 Cost Care Survey, shows the significant savings in opting to move to Mexico that can range anywhere from 61 percent to 240 percent. The cost of these facilities often varies between clients, depending on the type of room and the level of service they need. For example, larger, private rooms with private bathrooms tend to be more expensive, and residents with full blown dementia or Alzheimer’s would require a higher level of care and thus cost more.
An assisted-facility room in San Diego costs roughly $2,360 per month on average, according to the data. Serena costs roughly $1,466 on average. For nursing home-level care, which usually entails more medical care and assistance, Serena costs roughly $2,368 a month on average and in San Diego the average cost is $5,875.
Higher-quality rooms and care can be easier to provide in Baja because costs are lower, said Torres in Spanish.
“Here everyone can have their own room, and the majority do,” he said. “In many places in the U.S., they have more people in each room to keep costs down.”
Another facility, Casa Baja Assisted Living in Rosarito, touts similar cost differences, saying it costs half the price of a comparable U.S. facility. El Mirador Assisted Living Facility in Tijuana says you can rent there for 60 percent the cost you would have to pay in the U.S.
San Diego developer Gabriel Andres Garzo is working on a mixed-use development right on the edge of the border in Tijuana, and said he hopes to put a Serena facility in it – specifically for Americans.
“If you’re looking at the data, there are people who won’t be able to afford to retire or age gracefully in San Diego or Southern California,” Garzo said.
Once the Otay II Port of Entry is completed, Garzo said people could get from his development to Chula Vista in 15 minutes. That’s going to be appealing for Americans retiring on the Mexican side of the border and their families, he said.
But Garzo said there is still one major hurdle for these facilities really taking off in Mexico: health insurance.
“If Medicare reimbursements are ever accepted in Baja, that would be the tipping point,” Garzo said.
Even in California, clients of most assisted-living facilities pay out of pocket – that is, the facilities don’t accept insurance. So even in Baja, where the cost is significantly lower, the lowest-income seniors likely won’t be able to afford care facilities.
In San Diego, if some facilities have empty beds, they will opt to take Supplemental Security Income, cash provided by the Social Security Administration to aged and disabled people who have little to no income to provide for basic needs, like food, clothing and shelter. That income won’t match the going rate for many beds, so accepting it only tends to happen if a facility is having trouble filling a spot.
Retirees can receive Social Security benefits while in Mexico, so there is nothing stopping them from using that income there.
But using Medicare, the government health insurance provided to all Americans over the age of 65, isn’t an option – meaning that if an American senior in Mexico needs medical care, they either have to pay out of pocket or cross the border back to the U.S.
Frank Carrillo, CEO of SIMNSA, which provides cross-border health care to thousands of working people in the region for employers like Walmart, says there isn’t a great option to provide insurance for American seniors who live across the border.
“Mexico happens to be one of the favorite retirement places for the baby boomers,” Carrillo said.
Seniors who live in Mexico, whether they are in an assisted-living facility or not, have a few different options for accessing health care.
Those who have more money saved up or families that can support them could pay for smaller procedures out of pocket in Mexico, where health care, in general, is more affordable. Some seniors have family or advocates who can help them cross the border for check-ups or to pick up medication when necessary.
But for seniors in frail condition who may need emergency care, the inability to use Medicare could be problematic, said Christina Selder, co-founder and principal investigator at Consumer Advocates for RCFE Reform, a nonprofit that advocates for safe and quality care of seniors in assisted-living facilities in San Diego.
The senior would likely have to pay out of pocket or could potentially use a Medicare supplement, called MediGap, that would pay for emergency medical care only in Mexico.
Selder and Christine Murphy, the executive director of CARR, are also concerned about the market leading the pack when it comes to senior care facilities in Mexico. That’s how it started in San Diego –facilities popped up because there was a market for people who couldn’t live on their own, but weren’t in bad enough shape to be taken by a nursing home.
But the market was ahead of any regulatory effort, leading to a wide range in facility quality that, in the worst extremes, cost residents’ lives.
“There are a lot of moving parts with assisted-living facilities,” Murphy said. “It’s not just housing, even though it’s treated as such.”
“There’s this push that assisted living is a less expensive alternative to nursing homes,” Selder said. “That’s true. It costs less, but these are still medically needy people, and you have to look at whether the cost savings is also a sacrifice in the quality of care.”
That’s something Olivieri, Torres and Garzo say they don’t take lightly.
Torres said Serena’s Rosarito facility – and another in Tijuana that caters more to Mexican residents – both have permits from Cofepris, a branch of the country’s Department of Health, and undergo inspections from the local government as well.
Serena also uses trained nurses who are overseen by geriatricians.
Garzo said the concerns of advocates is why he’s trying to work with a company like Serena that already has experience taking care of seniors.
“We have the location, we can provide the infrastructure and the environment, but we’re not going to pretend we’re going to provide the actual care,” he said. “Health caregivers are important, but they’re not the ones you should ask to find a location and put together the deal.”