Elder Care

Elder care is one of the biggest financial responsibilities faced by Americans born between the 1950s and 1970s. It is financially challenging for the rich, poor, and everyone in between. Elder care can stretch resources, test family members’ patience, strengthen compassion, and sometimes cause families to file for bankruptcy. This financial responsibility affects a legion of adults who are advancing their careers, while at the same time caring for their loved ones.

According to the American Association of Retired Persons (AARP), the average cost for a private room in a nursing home in 2007 was close to $78,000 per year nationwide. In California and New York the average cost was $133,000 per year. The annual bill for an assisted living community was between $35,628 and $50,000 nationwide.

According to the U.S. Census Bureau, the number of Americans who are 65 years or older is expected to climb to 40 million by 2010 and bypass the 50 million mark before the year 2020. More than 70% of those baby boomers will need long-term care services, including help with preparing meals, feeding themselves, organizing medical care and prescriptions.

Financial Tips for Managing Elder Care Costs

1. Hold the Elder Care Conversation with Family Members. Begin by encouraging family members to help you learn about your loved ones’ financial situation and the kind of care they expect to have. Additionally, try to agree on a financial contribution and care plan that is fair and equitable to everyone involved. Try to find a meaningful elder care role for all siblings. Explore the possibility of selling your loved ones’ property or obtaining a reverse mortgage to generate funds for medical and living expenses. You will also need to ensure that you have the necessary documents on hand as you begin your elder care. Collect items such as birth certificates and loan documents. Encourage your loved ones to give someone the authority to make financial and medical decisions if they become incapacitated. You will need two documents in case of an emergency: a durable power of attorney for finances, and a power of attorney for health care. You will also need dates of birth, social security numbers, military discharge papers, if applicable, and marriage certificates.
2. Consider In-Home Care. You may be able to reduce costs by selecting a properly trained person to care for your loved one at home. Home care includes assistance with eating, bathing, and other daily activities. Another option to consider is companion care, which includes medication reminders, meal preparation, helping with errands, and the like. The National Private Duty Association provides guidelines for in-home care, as well as a care locator. The Department of Health & Human Services Administration on Aging also provides an elder care locator.
3. Research Long-Term Care Insurance Options. Long-term insurance policies promise to pay for in-home, assisted living, or nursing care. The premiums depend upon the health and age of the insured. Check with an insurance agent for more information.
4. Research and Claim Federal and State Benefits. Millions of older adults eligible for federal and state benefits don’t get them in many cases because they don’t know they are eligible. This includes assistance with paying for Medicare premiums, housing, transportation, prescription drug costs, and utility bills, just to name a few. To find out which benefits your loved one qualifies for, and how to get them for free, if this is available, visit the National Council On Aging website.
5. Research Social Security Divorced Spouse Benefits. If a retiree was married for at least 10 years, he or she may be entitled to a social security retirement benefit equal to the larger of:
   • A benefit based on his or her own work history, or
   • A benefit as a divorced spouse (one-half of their ex-spouse’s benefit even though he or she may have already passed away).
6. Research Special Pension with Aid and Attendance Program. This program is offered by the U.S. Department of Veterans Affairs (VA). The pension is paid in addition to other VA pension benefits. It may help pay for in-home care, assisted living facility, or in-home nursing care. In general, most veterans and their spouses may qualify if:
   • The veteran was discharged from service for a reason other than dishonorable,
   • The veteran served at least 90 days on active duty, one day of which must have been served during a war time period. If the veteran entered active duty after September 7, 1980, generally he or she must have served at least 24 months or the full period for which called or ordered to active duty. (Please note that this is a general description and there are exceptions to this rule.),
   • The family income is below a yearly limit set by Congress,
   • The veteran is at least 65 or older, or permanently and totally disabled, not due to the veteran’s own willful misconduct, and
   • The veteran or veteran’s spouse require assistance of another person to perform everyday living activities, such as bathing, eating, and dressing.
     
     For more information about this program, visit the U.S. Department of Veterans Affairs web site.

7. Research the Medicare Program. Medicare is a health insurance program for people age 65 or older, some disabled people under the age of 65, and for anyone who has permanent kidney failure. Medicare does not cover everything, and it does not pay the total cost for most services or supplies that are covered. The amount of coverage is dependent on whether your family member has coverage under Medicare Part A, Medicare Part B, or both. Medicare Part A typically pays for inpatient hospital expenses and Medicare Part B typically covers outpatient health care expenses, including doctor fees.
   
   Did you know that Medicare may pay for a physical therapist to provide in-home physical therapy if your loved one becomes weak or has difficulty walking? Ask the doctor for a written prescription of physical therapy and make sure it is provided by a Medicare-certified agency.
   
   You should talk to your family member’s doctor to be sure he or she is getting the services and supplies that best meets his or her health care needs. For more information about the Medicare program, visit the medicare.gov web site.
8. Research the Supplemental Security Income (SSI) Requirements. SSI is a federal income supplement program that helps seniors, the blind, and people with disabilities who have little to no income. The program provides cash for basic needs such as food, clothing, and shelter. To find out if your family member qualifies, visit the Social Security Administration Supplement Security Income Home Page.
9. Research Medicaid and Food Stamps Benefit Requirements.Seniors who qualify for SSI may also qualify for Medicaid and/or food stamps. For more information about these programs, go the Social Security Administration website.
10. Investigate Life Settlements. A life settlement occurs when a policyholder sells his or her life insurance policy to an institutional investor instead of cancelling the insurance. Funds received can be used to pay for in-home care, assisted living facility, or nursing care. For more information, visit the Life Care Funding Group website.
11. Review your Income Tax Deductions. If you provide more than half of one or both of your parents’ financial support, you may be able to:
    • Claim him or her as a dependent on your federal income tax return, or
    • Deduct some of his or her medical expenses. Check with a qualified tax accountant for more information.

The financial impact of elder care can be daunting, but help is available. In addition to the options listed in this article, there are many specialized programs available through social service agencies, senior citizen programs, and churches in your local community. Investigate them and talk to people with similar financial responsibilities.

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