Senior Care Costs Rising

Providing senior care for a loved one can be overwhelming both emotionally and financially. According to the 2013 Genworth Cost of Care Survey, median annual costs for various types of senior care in Sonoma County can reach burdensome levels:

In-Home Care Services (Assistance with Activities of Daily Living, including dressing, personal hygiene, bathing, etc.) – $57,200 annually (based on 44 hours/week) Assisted Living Facility –$51,000 annually (private/one-bedroom)
Nursing Homes – $102,200 (semi-private) and $122,640 (private) annually
Adult Day Care – $32,500 annually (based on 8 hours/day, 5 days/week)

I hear stories daily from children regarding the financial challenges associated with providing their aging parents with assistance. Such assistance may be provided at home, assisted living facilities, residential care homes or nursing homes. As they go through the process, seniors commonly say, “I do not want to be a burden on my kids as I age.” Below, I’ve highlighted some of the options that will help pay (fully or partially) for needed assistance or care:

Long Term Care Insurance

Long Term Care Insurance could be the best investment one can make. Unless medically necessary, you can avoid Skilled Nursing Facilities by residing at Assisted Living Facilities, Residential Care Homes or at a home with the needed In-Home care. This type of insurance makes it much easier to cope with most otherwise uncovered health issues as you get older.

Long Term Care Insurance should be as important as your health care insurance, life insurance and homeowners insurance. Generally, long-term care is needed for conditions that cannot be cured or healed, and for helping people with routine activities such as dressing, bathing, transferring, continence care, toileting and eating. Long Term Care Insurance extends for a long period of time, covering care for various types of dementia, including Alzheimer’s disease. Long Term Care Insurance, which can reduce the burden from your family and your peace of mind, should be a very serious consideration.

Life Insurance

There are programs which convert the death benefit of an in-force life insurance policy into a Long Term Care Benefit Plan (Life Care Benefit) to cover the costs of In-Home Care (Private Duty and Skilled Nursing), Assisted Living and Nursing Home Care.

The conversion option applies to any form of life insurance: Universal, Whole, Term, and Group. The value of the conversion is based solely on the death benefit, and cash value is not a factor in determining the conversion value of a life insurance policy. Once the conversion value is determined and the enrollment is complete, expenses will be paid monthly to the appropriate health care provider.

Veterans Aid and Attendance

The Aid and Attendance pension benefit offered by the Department of Veterans Affairs (VA) may be available to wartime veterans and surviving spouses who have in-home care, live in Assisted Living Facilities or Nursing Homes. The current monthly benefit can be up to $2,054. Though there are minimum qualifications, below I have outlined the prerequisites for review. If you checked each box, you may be eligible to receive monthly benefits:

 Served in the military during time of war (or spouse).
 Have less than $80,000 in investments excluding home/car. Note: There are other options still to consider if this wasn’t checked.
 Monthly income less than the monthly cost of care including prescriptions.
 Need help from others in one or more of Activities of Daily Living.
 If surviving spouse, married to the veteran at the time of death.
 Have sufficient resources to pay for care while awaiting a decision for the VA (may take 3-12 months).

Medicare/Medicaid

Most private health insurance plans follow the same general rules as Medicare. If any long-term care is covered, it is usually for only skilled, short-term and medically necessary care. Home care is limited only to medically necessary skilled care. Custodial or personal care is not covered by health insurance. The coverage in a Skilled Nursing Facility must follow a hospital stay and is limited up to 100 days. If you meet Medicaid’s financial eligibility status, you must select a Skilled Nursing Facility that accepts Medi-Cal.

As you can see, while providing senior care for your loved one may be emotionally and financially challenging, there are a variety of available options to substantially ease the burden.