“Don’t go Broke Paying for Senior Care”
By Noelle Kurth, At Home Personal Care, Scottsdale LIVING WELL Magazine
Ask an aging parent or loved one where they want to be living in their remaining years and chances are they’ll respond with “right here, at home!” While it’s true most seniors prefer their own home for “aging in place,” memories, personal belongings, familiarity, and comfort are all reason enough to want to remain home. However, for many families, affordability is a huge factor when deciding senior care options for mom or dad. How will we afford this? Does the government pay?
Medicare does not pay for home care assistance or “personal care.” A great majority of individuals must rely on personal income and resources to pay for senior care. Fortunately, home care is much more affordable than most people think. According to a recent survey, most families overestimated the cost of home care services by $6 an hour. To start determining your own long-term care plan or your loved one’s, let’s explore all the possible options.
Family Provided Care: If family members are willing and able to devote the time and energy required for care, their help can greatly reduce cost, especially when combined with assistance from a home care agency. But keep in mind, an untrained family member may not be able to provide the level or type of care that is needed. In addition, this shift in the role from “family member” to caregiver can often strain family relationships. Many older adults prefer not to burden family members. If you plan to have family members help be sure to have frank conversations now and on an ongoing basis.
Long-Term Care Insurance: Long-term care insurance may provide a high level of coverage depending upon the policy benefits but it can get expensive, particularly for older adults. As a general rule, the sooner you enroll, the lower your premiums will be. Existing health conditions may disqualify you, and a medical screening will be required. If your parent or loved one has a long-term care policy, be sure to review the policy thoroughly, including the maximum benefits, elimination process, and requirements of agency or facility. It is a good idea to give the long-term care company a phone call prior to starting a claim and gather all the necessary information you will need to begin.
Medicare or Other Health Insurance
While Medicare and other health insurance policies may cover medically necessary care provided in a skilled nursing facility or in the home after a major medical condition or event requiring a hospital stay, neither method covers ongoing personal care or home care, including help with essential daily activities.
Medicaid: Medicaid covers long-term care only for those who meet strict state-specific financial eligibility requirements. Personal investments and assets must be almost completely exhausted before Medicaid can be accessed. Even when that’s the case, Medicaid covers services only from a list of approved providers. If relying on this option, be sure to look into the types of providers and facilities approved by Medicaid to be sure these are acceptable to you.
Life Insurance: Some insurance companies offer long-term care additional riders for life insurance policies. Other options may enable you to use your life insurance policy to help pay for long-term care. Accelerated death benefits and viatical settlements (selling your policy to a third party) provide payments lower than the full value of the policy, but can make sense for those who are terminally ill or in poor health. A life settlement essentially sells your life insurance policy for its present value—often a wise choice for those who no longer need or want a policy.
Veterans Aid and Attendance Benefit: The VA Aid and Attendance program is designed to provide monetary assistance to those veterans and surviving spouses who served our country during a time of war and are now in need of aid or assistance with activities of daily living. This aid or assistance can be provided at home, in an assisted living facility, or a nursing home. To qualify for the Aid and Attendance Benefit, the veteran will have at least 90 days of active duty, but need not have served in combat, one day of active duty during a period of war, honorable discharge, and a physician note stating the need for assistance. Financial qualifications must also be met. This tax-free benefit pays up to $1,644 per month for a single veteran.
Other Options: Long-term care annuities, the sale of a home, and personal savings are sound funding options for many.
It is important to start the financial planning process now, get a clear view of your loved one’s situation, and take time to investigate all options and funding sources.
Noelle Kurth is the managing partner of AT HOME Personal Care in Phoenix, Arizona.