Elder Care Costs | Long Term Care Considerations

Elder Care Costs are constantly changing- unfortunately it seems to be ever increasing. Notice how if a cost of living increase is applied to your Social Security benefits how your medical expenses increase in the same proportion.

The statistics relating to our typical living show the average age of the elder generation living independently is 75; living in assisted-living facilities is 83 with an anticipated stay of 2 years; and living in a nursing center/home is 85 with an anticipated stay of 1 to 2 years. Of course, we all know exceptions to these averages.

The age comparison for occupancy at home or in an assisted-living facility versus a nursing center/home is:

Age 65-75....99% Home or ALF...1% Nursing Center

Age 75-84....95% Home or ALF...5% Nursing Center

Age 85+......85% Home or ALF..15% Nursing Center

Many factors come into play as to how Elder Care Costs are shared. In the USA an eye-opening statistic is that Medicaid programs bear approximately 47% of the expenses; Out of Pocket Expense by the Patient is 21%; Medicare shoulders 18%; Private Insurance bears only 9% and other public and private insurance the last 5%. Based on the premiums paid by the elder generation for insurance coverage we could certainly get into a discussion on the percentages paid for Elder Care and the conditions and limits by our providers, but it accomplishes nothing here.

The elder generation through approximately the year 2010 aged 65 and older represents 20% of the population. It is projected to rise to 33% between the years 2030 to 2040. Long term care in the USA is being provided by nursing centers to 5%; assisted-living 1.5%; low level care centers -30%; and the balance being handled in the home.

The Care Management Team is primarily concerned with the current costs and what happens as health deteriorates and housing needs change. The first order of business is to create a budget based on current conditions with the added consideration for potential expenses as medical conditions dictate. Establish:

$__________ Housing Costs - if any- mortgage or rent....

$__________ House Insurance

$__________ Utilities -phone, power, gas,cable,internet.

$__________ Vehicle Expense - payment if any

$__________ Vehicle Expense - insurance

$__________ Vehicle Expense - gasoline

$__________ Insurance - Life

$__________ Insurance - Medicare Part B,C & D

$__________ Insurance - Supplemental/Medigap

$__________ Grocery Allowance

$__________ Clothing Allowance

$__________ Credit Care Expense

$__________ Charities

$__________ Medicines

$__________ Doctor Co-pays

$__________ Caregiver - if paid

$__________ Housekeeper - if any

$__________ Miscellaneous Expenses -gifts, cards

______________

$__________ Total - Normal Expenses

Potential Additional Expenses

$__________ Adult Day Care

$__________ Equipment Rentals if not covered by Insurance

$__________ Home Health Supplies

$__________ Additional Medicines

$__________ Modifications to House if not covered

$__________ Visiting Nurse- if not covered by insurance

$__________ Visiting Home Health Aide

_____________

$__________ Total Anticipated Elder Care Costs

Allowances noted in the articles I read were for:

Visiting Nurse $ 82.00/visit at the direction of a doctor

Visiting Aide $ 25.00/hr

Housekeeper $ 17.00/hr

Adult Day Care $ 56.00/day

Home Health Supplies includes personal care items such as adult diapers, special clothes, utensils, shoes.Equipment Rentals include special beds, chairs, bedside potty chairs, wheelchairs, scooters.

Home Modifications includes ramps, safety rails, grab-bars, elevators, lifts, door frame modifications. Door modifications can be as simple as removing the lower portion of the door jamb to clear a wheelchair access. Safety rails and grab-bars require proper anchoring and should be done by someone capable of that installation. Ramps, lifts and elevators are more complex and can be expensive. Contact your local representative and they will happy to refer you to someone in your area.

*The costs shown are only approximate and can vary up or down depending on your location and needs.

For a comparison the average Elder Care Costs for:

Skilled Nursing Center is approximately $5200/month and an Assisted-living Facility is approximately $2700/month.

Does Medicare cover all of it? NO! Does supplemental insurance pay for what I can't pay? Probably Not! Do I still keep paying insurance premiums? Yes! Okay, what do I do now?

Because our generation (senior citizen) is required to bear more of the burden of the expense for our medical care and we are living longer, a discussion with a certified financial planner or your attorney might be in order to determine your best options. Reverse mortgages on your home and/or long term care insurance or some other plan determined by your assets, holdings, investments and life insurance might be your answer. Be sure a trusted family member or friend who will be handling the financial affairs of the patient if required is involved in dealing with this planning. The earlier the planning, the easier it is to engage the plan when it's needed. Magdalein,Stratton & Associates at http://www.msawealth.com will be happy to refer you to someone in your area.

If you own a home, a reverse mortgage can be applied for to provide additional income to cover your health care and living expenses. This in essence creates an ongoing and increasing mortgage against your home that is due and payable upon your death from your heirs. Be sure what the terms are and what happens at it's completion so there are not surprises.

More recently Long Term Care insurance has become more popular. Coverage is based on an anticipated time period and the level of care selected with the appropriate premium. Be careful that you understand when it is available, how long it's available, and what and where it covers, and how it affects your assets. CMS (Centers for Medicare & Medicaid Services) offers a free Planning Guide for long-term care and includes a CD of personal stories of real-life experiences and a comparison chart for rates and benefits for potential policies. Contact www.medicare.gov and order the available publications to explore your choices.

Medicare does not cover long term care for nursing homes or assisted-living facilities. If qualified it will pay for the first 20 days in a skilled nursing center, and partially from day 21 to day 100. After that you are on your own with any supplemental or long term care policy you have in effect.

If faced with a nursing home/center and limited financial sources you may qualify for Medicaid. Residency and assets are part of the qualifying process. Not all states have the same requirements to qualify. Not all nursing homes accept Medicaid patients. If you receive Social Security benefits, all of your benefits less a small stipend for personal items goes toward your care in the center with the balance paid by Medicaid.

In considering home health Elder Care Costs or Long Term Care, the assets and income of the caregiver should not be taken into account unless they are a spouse and a regular household member contributing to the household expenses. When the caregiver is a family member or friend, allowances should be made for groceries, gasoline toward transportation costs, and items necessary for the care of the Caregiven. If the caregiver is a paid professional those same allowances are required in addition to a salary.

Home Elder Care is certainly the best option for everyone as long as possible. When conditions change, so must the action plan and a way to follow it. The key is to have a plan in place for elder care costs.

*Note the statistics indicated were taken from articles in the references listed below. Costs vary depending on location and need. Those listed here are for reference only and should not be construed otherwise. References:

Merck Manual of Health and Aging

Merck Manual of Geriatrics

Longtermcare.gov

Elderweb.com

For Medicare.gov

Magdelein & Stratton