Can I Afford In-Home Elderly Care?

Most clients prefer to age at home. However, in-home elder care costs add up quickly, so be aware of other affordable housing options.

Staying at home isn’t always affordable, according to a recent US News and World Report article. The article, entitled “Can You Afford In-Home Elderly Care?”, says about 80% of seniors are concerned about being able to afford home health care costs, based on a 2019 SCAN Health Plan survey. Paying for personalized in-home senior care can add up quickly and isn’t always easy on a senior’s tight income.

If you’re thinking about in-home elderly care, review these criteria to determine what costs to expect and the different payment options available for this type of care.

Find Out the Services Included in Home Care for the Elderly. In-home care can vary a lot, depending on your health conditions and needs. You might get helpers if you’re recovering at home from an illness or injury, and you could also have home care workers help you with daily activities, such as preparing meals and personal hygiene. Home care services often include rides to and from appointments, monitoring heart rate and blood pressure and in-home physical and cognitive therapy sessions.

Think about the Level of Care Needed. If you can do most daily activities on your own, but could use help with certain activities, such as cooking or cleaning, home care might be a wise option. Home care is focused on the service, and it’s supposed to help those who are living on their own as long as possible. When more care is required, moving to a place with more health support may be necessary. People who have significant needs may often look to assisted living as an alternative. Assisted living facilities offer more services, like 24-hour emergency care and ongoing supervision for seniors with Alzheimer’s, dementia, or other disabilities, although funding options may be limited.

Check Out the Cost of In-Home Senior Care. Homemaker services cost about $22.50 per hour on average and include tasks to help a person with daily duties like laundry, grocery shopping and light housework. A home health aide charges an average of $23 per hour, and may help with administering medicine at scheduled times, supervising and monitoring chronic illnesses and helping with walking aids. Of course, the exact cost of these services depends on where you live and the amount of help you need. The monthly cost for in-home care ranges from $4,290 for homemaker services to $4,385 for home health aide care. This typically costs more than the monthly median cost for an assisted living facility—but less than the median cost per month for a room at a nursing home facility.

Know Your Insurance Coverage. If you’re on Medicare, you may be able to get coverage for some short-term home services. To do so, a doctor will need to indicate that skilled nursing care is needed for a short period of time. Medicare will cover speech therapy, occupational therapy, or physical therapy. You can also use it to help with the purchase of durable medical equipment and safety additions to your home. However, Medicare won’t typically cover long-term home care services.

Medicaid will cover some health services at home, like cleaning and meal preparation, rides to and from medical visits and personal care if you are financially eligible.  Depending on the program, it provides some care and services in the home to those who need it medically. If you have long-term care insurance, some in-home services may be covered by your policy.

Look at Other Payment Methods. If your insurance won’t cover in-home care, you might have to pay out-of-pocket. One way to lower costs, is by asking family members to help. If you need to hire more help over time, the cost for services will increase accordingly. If that doesn’t work, they may help pay for in-home elderly care.

Additionally, people often overlook government benefit options, such as Medicaid or Veterans’ benefits such as Aid & Assistance.  People wrongly assume they aren’t eligible for the benefits, and miss out on funds available to them.  See here for a fuller description of this issue.  https://www.galliganmanning.com/medicare-basics-what-to-know/

Reference: US News and World Report (June 10, 2020) “Can You Afford In-Home Elderly Care?”

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Long Term Care Costs Going Up Due to COVID-19?

Long term care costs are already expensive, but will likely increase due to costs from COVID-19. No one can predict how much, so it is better to plan now.

About 70% of seniors 65 and older will eventually require some type of long term care in their lifetimes. That care already isn’t cheap, but how will prices be affected by COVID-19?

Motley Fool’s recent article asks “Will COVID-19 Drive Up the Cost of Long-Term Care?” According to the article, unfortunately those figures may begin to look like a bargain in the coming years as facilities change their policies and long term care costs go up after COVID-19.

The impact of the coronavirus has been experienced throughout the country, but we all see that nursing homes are an especially hard hit. As of April 23, there were over 50,000 reported COVID-19 cases in long-term care facilities, according to the Kaiser Family Foundation, and to date there are well over 100,000. In six of the 23 states that are publicly reporting death rates (Delaware, Massachusetts, Oregon, Pennsylvania, Colorado, and Utah), deaths in long-term care facilities are at least half of all COVID-19-related fatalities.

Again as of April, COVID-19 has been detected in at least 4,000 long-term care facilities across the country and has caused more than 10,000 deaths among residents and staff members. As a result, nursing homes and other long term care facilities will most likely reconsider how they train and rotate staff and implement sanitary standards to avoid this from occurring again.

All of this is will likely come at a cost, and the question will be if that expense is passed on to seniors, who can hardly afford these facilities in the first place.  If so, long term care prices, already difficult for many to manage, will increase.

We can’t really predict if you’ll require long term care in the future and to what extent. We also don’t know how much long term care costs will go up in the coming years after COVID-19. However, you may be well served to purchase long term care insurance while young enough and healthy to qualify.  See here for more information.  https://www.galliganmanning.com/when-should-i-consider-long-term-care-insurance/

The best time to apply is during your mid-50s, so that you aren’t paying those premiums for too many years. However, you’re also applying at a time when you’re relatively young and more apt to get a nice discount on your premiums based on your age and health. However, if you’re already past your mid-50s, you still should look at applying in your 60s, too, especially if your health is good.

Not all long term care policies are created equal. Different policies offer varying levels of coverage. Take the time to assess your financial resources, research the cost of long-term care in your area and determine the amount of coverage you think you’ll need.

If you don’t have a plan for the rising costs, then you’ll have to consider either private paying the higher rates, or seeking government benefits to cover the costs.  Time will tell what effect COVID-19 has on Medicaid.

Even if COVID-19 doesn’t directly mean big increases, the cost of long term care has already been increasing every year. The more financial protection you have, the less stress you and your family will have when you are older.

Reference: Motley Fool (May 5, 2020) “Will COVID-19 Drive Up the Cost of Long-Term Care?”

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Your Children Want You to Have an Estate Plan

Clients often forget that a solid estate plan makes things much easier for their kids. Even the kids want you to have an estate plan!

Many clients delay creating an estate plan.  People don’t want to think about scenarios where they are deceased or incapacitated, and some people delay because they are afraid of costs.  Clients often think of the impact of estate planning on themselves, forgetting that their children want them to have an estate plan too.

After all, it is the adult children who are in charge of aging parents when they need long term care. They are also the ones who settle estates when parents die. Even if they can’t always come out and tell you, the recent article, “Why your children wish you had an Elder Law Estate Plan” from the Times Herald-Record spells out exactly why an elder law estate plan is so important for your loved ones.

Avoid court proceedings while living. In a perfect world, everyone over age 18 will have a financial power of attorney, a medical power of attorney and a living will, as well as other estate planning documents to facilitate their use.  These documents appoint others to make financial, legal, and medical decisions, in case of incapacity. Without them, the children will have to get involved with time-consuming, expensive guardianship proceedings, where a judge appoints a legal guardian to make these decisions. Your life is turned over to a court-appointed guardian, instead of your children or another person of your choosing.  This is an expensive and invasive process.

Avoid court proceedings after you die. If you die and you own assets in your own name that do not pass by contract, you will likely go through the probate process, a court proceeding that can be time consuming and costly. Not having any assets in trusts leaves your kids open to out of pocket costs, time, work and difficulty in gathering assets.

Wills in probate court are public documents. Trusts are private documents. Utilizing trusts can keep the details of your estate out of the public eye.

An elder law estate plan also plans for the possibility of long term care and costs. Nursing home care costs can be extreme, and many clients don’t plan for such a creditor during their life time. If you don’t have long term care insurance, you should consider an estate plan that facilitates long term care government benefits, such as a revocable trust plan.

The “elder law power of attorney” has unlimited gifting powers that could save about half of a single person’s assets from the cost of nursing homes. This can be done on the eve of needing nursing home care, but it is always better to do this planning in advance.  This is one of the main roadblocks to Medicaid planning later in life.  Client’s don’t update their powers of attorney and limited their gifting options.

Having a plan in place decreases stress and anxiety for adult children. They are likely busy with their own lives, working, caring for their children and coping in a challenging world. When a plan is in place, they don’t have to start learning about Medicaid law, navigating their way through the court system, or wondering why their parents did not take advantage of the time they had to plan properly.

You probably don’t want your children remembering you as the parents who left a financial and legal mess behind for the them to clean up. Speak with an elder law estate planning attorney to create a plan for your future. Your children will appreciate it.

And kids, see here for speaking with your parents about estate planning.  https://www.galliganmanning.com/probate-lawyers-say-talk-to-your-parents-about-estate-planning/

Reference: Times Herald-Record (May 23, 2020) “Why your children wish you had an Elder Law Estate Plan”

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