I recently received a call from a financial advisor concerned about the cost of supportive care for a client with early-stage dementia who was still ambulatory with a cane and did not have problem behaviors. The base price of this ALU (Assisted Living Unit) was $10,500, but with “à la carte” Care, the monthly bill was $19,500/month. 

When older persons with dementia living in their home require more care than their family or resources can provide, the subsequent sub-optimal care often leads to a crisis, acute hospitalization, and a transfer to SNFs for rehabilitation. For financial reasons, SNFs may be motivated to move them back into the community with Medicare’s outpatient rehabilitation benefit, either at home, home with added private caregiver support, a large ALU, or a Memory Care Unit. For persons who are resource-challenged (MediCal), becoming a custodial resident may be their best option. 

Are there alternative dementia care options that are often overlooked? That was the question this financial advisor posed. As a provider who has worked in all these settings, a commonly overlooked setting is the small RCFE (Residential Care Facility for the Elderly), AKA, Board and Care Home. These are typically residential homes with added rooms that typically house about 5-7 residents. Many are owned by RNs and are permitted to care for residents with dementia if caregivers have appropriate training; some also have waivers to allow care for residents receiving hospice care. This is a home-like setting where staff live with residents, provide supportive care, and prepare home-cooked meals, often customized to residents' preferences. As a hospice Medical Director caring for patients with dementia living in these small homes, I am impressed by the homes' ability to provide excellent care based on staff’s knowledge of their residents’ capacities, impairments, and preferences. When I do a FTF (Face to Face) visit for a hospice patient, I can ask incredibly detailed questions about how a resident is doing, which are readily answered without the staff having to look at a computer. When there is a change of condition, I am commonly notified within hours or the first day, rather than several days later, as in many institutional settings. Families can visit 24/7, which is quite welcome when a loved one is actively dying. This home-like setting is where my mother and father-in-law (both had mixed dementia) died in 2010 and 2011. In both cases, their excellent supportive care allowed our families to focus on care that only families can provide. We have fond memories of the time we were able to create with them during their last years of life. 

Returning to this advisor’s cost of care concern, in California, Google Gemini states the average cost of monthly care in 2026 for a person with early-stage dementia living in ALF vs RCFE is:

Gemini also made these comparisons:

1. Large Assisted Living Facilities

These are the large, hotel-like campuses. For early-stage dementia, you may have two options:

• Standard Assisted Living with "A La Carte" Care: If the person is still very independent, they might stay in a standard unit with a "level of care" fee added.

• Memory Care Wing: Most facilities will eventually require a move to a secure Memory Care wing. This is typically 20–30% more expensive than standard assisted living due to specialized staffing and security.

• Hidden Costs: Expect a one-time "Community Fee" (often $3,000 – $5,000) upon move-in.

2. Small RCFEs (Board and Care Homes)

These are traditional houses in residential neighborhoods. They are often the most cost-effective option in California.

• Predictable Pricing: They frequently offer "all-inclusive" rates, which are helpful for budgeting as dementia progresses.

• Personalized Care: Because there are only a few residents, the staff-to-resident ratio is much higher, which can be beneficial for someone who gets easily overwhelmed by large crowds.

• Lower Entry Fees: Move-in fees are usually lower or negotiable compared to corporate-run facilities.

3. Regional Price Variance

California’s prices vary wildly by zip code.

• High-Cost Areas (San Francisco, San Jose, Santa Rosa): Expect to pay at the top end of the ranges ($8,500–$12,000+).

• Moderate/Lower Cost (Sacramento, Riverside, Central Valley): You can often find quality care in the $4,500–$6,000 range.

Since dying with dementia is typically a slow process extending over years, the cost and quality of dementia care are important considerations. Most communities have agencies specializing in RCFE placement, which can be found using social services or AI. 

When I develop dementia and can no longer be cared for in my home setting, I am opting for the RCFE option, where home-like care is more readily delivered, and the cost is lower.

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As to dementia waivers, they no longer exist:

As of January 1, 2025, California has updated its regulations, removing the requirement that a dementia diagnosis automatically triggers a "waiver" for retention in a Residential Care Facility for the Elderly (RCFE). The new regulations focus on aging in place and individualized care, removing the old, automatic, heightened requirements, though specialized care still applies. 

Key changes and requirements for California RCFEs:

• Updated Regulations (2025): The new regulations promote resident retention by allowing individuals with dementia to stay in the least restrictive environment.

• Medical Assessment: The LIC 602A form (Physician's Report for Residential Care Facilities for the Elderly) is used to determine if an individual is suitable for care, ensuring the facility can meet their specific needs.

• Specialized Care: If a resident with dementia requires care beyond typical RCFE services (such as for ongoing behaviors that may disrupt others or specific care needs), the facility must still meet requirements for providing that specialized care.