How Will You Cope?
The cost of elder care for our honored elders rises every year; this year, according to cost-tracking organization Genworth Financial, the median cost of one year in the nursing home care has gone up to a staggering $91,250. Yes, a year in a nursing home now costs more than three years at a typical mid-range college.
This is the fifth straight year of four-percent (or more) increases in nursing home prices; that translates to a 27% increase in total cost during a time in which consumer purchasing power has increased only 7.9%. Families are left to make sacrifices to absorb the other 19% of that change. How are they doing it?
Not Long-Term Care Insurance (for Most Folks)
Long-term care insurance is, unfortunately, one of the best ways to pay for residential care. However, it is expensive unless you bought it a decade or two before you needed it. Also, unless you were well informed when you purchased your policy, you may well find that it does not cover everything you need it to.
Medicare simply has no benefit for long-term care, unfortunately. Medicare will help pay your residential care bills for a short time after a hospital stay, but not for any form of extended residential caretaking.
Hopefully Many families with elderly loved ones who have not yet had to deal with Medicaid respond to the shock of seeing their proposed care costs by saying to themselves “well, we can fall back on Medicaid, right?” The answer is only if you are in very poor financial condition. This is because in order to qualify for Medicaid, a senior must first spend their savings (including selling most of their assets) until they meet the strict qualifications (including having a mere $2,000 in the bank and very little in possessions to your name).
You cannot finagle the situation with Medicaid, either. If you attempt to move assets out of your name in any fashion, Medicaid will simply count those items as sold and not pay for your care until you have absorbed an amount of medical costs equal to the value of those items. So if you do not forfeit your assets to pay for care, you will end up with no care at all.
Even with that painful reality in place, Medicaid does unfortunately end up becoming the healthcare vehicle of choice for a large number of American seniors. In 2013 alone, Medicaid paid out $110 billion for long-term care, accounting for more than half of the cost of America’s total long-term care and more than a quarter of overall Medicaid spending.
Reducing Your Bill by Moving
The cost of residential care also changes significantly depending on where in the country you live. The West Coast, New England, Alaska, Ohio, Illinois, Wisconsin, Wyoming, Colorado, and Nebraska are all very high-cost areas for long-term care. Moving from Alaska to Oklahoma, for example, can reduce the cost of senior care by a whopping $220,000. This is because prices for medical care in Alaska leave the realm of sanity once you reach retirement age. So depending on what part of the country you live in, the few thousand dollars it takes to move can pay big dividends in making long-term care affordable.
The Option of Choice: Avoid Residential Care
Perhaps the best way to avoid paying the incredible expense of residential care is to find a viable alternative. Many American families have found a way to significantly reduce the cost of nursing home care by placing their honored elders in assisted living facilities ($43,200/year), or to care for them at home with the assistance of home health care aides ($45,750/year). These options come with the added benefit of a better overall quality of life for your aging loved ones.
Other lesser-known options vary significantly from state to state and even community to community. Many such alternatives can be found by contacting PACE (Program of All-Inclusive Care for the Elderly run by Medicare) at npaonline.org. Alternatively, your local Area Agency on Aging (generally found in your phone book or online) can also help connect you to community-level services that may be able to help.
The costs of modern elder care are enormous; and it is shifting the burden more and more onto families as it outgrows our incomes. However, with dedication, persistence, and a willingness to sacrifice, it is possible to find alternatives that can work for you and your family.