According the U.S. Department of Health and Human Services, a 65-year-old has a nearly 70% chance of needing long-term care at some point in their life. About 20% of 65-year-olds will need long-term care for more than 5 years. Considering that long-term care can cost more than $50,000 per year, anyone who’s in a caregiving relationship needs to understand the options for helping an aging family member, especially if he or she is dealing with a debilitating medical condition.
Here are three important things to consider as you prepare and care for yourself or a loved one.
1. Explore long-term care insurance.
Medicare only covers 100 days at a skilled nursing facility, which, in practice, is usually recuperation from a short-term medical issue. Folks who are anticipating more permanent arrangements have to weigh potential out-of-pocket costs against the cost of long-term care insurance. These policies help defer some of the costs of assisted living facilities and in-home nursing, which Medicare does not cover.
Unfortunately, the rising cost of care for aging seniors has caused many insurers to stop offering long-term care policies or increase premiums. A 65-year-old couple could spend nearly $4,000 per year for $165,000 in basic coverage. That’s probably not an unreasonable expense for many seniors. But the cost of more comprehensive coverage only goes up from there. And if your family member didn’t enroll in a plan when they were younger and healthier their premium costs could be significantly higher.
Compare the costs it would be to fund a long-term care policy versus investing that premium per year and using that to fund your long-term care if needed. Can do this with any compounding interest calculator. Vanguard provides the historical return based upon your portfolio allocation to help you input your return when doing the compounding interest calculation.
2. Consider aging in place.
If you, family members, and close friends and neighbors can form a support network, your senior might be able to continue living at home. But, in addition to scheduling care visits and transportation to doctor’s appointments, you’ll also need to budget for a home care worker, especially if your senior needs special treatment or monitoring on a regular basis.
The type of home care worker you hire will depend on your senior’s needs. For example:
- Personal care aides are unlicensed helpers who help with things like bathing, dressing, transportation, meals, housework, and companionship.
- Home health aides check vitals and assist with daily living tasks, such as using the bathroom, dressing, and housework. These workers must receive 75 hours of federal training and meet state certification requirements.
- Seniors who need more direct medical assistance, such as receiving medication, equipment sanitation, or changing dressings, might require a licensed nursing assistant, skilled nursing provider, or registered nurse.
The federal government’s Eldercare Locator can connect you with your local Area Agency on Aging and help you find an appropriate caregiver.
3. Compare assisted living and nursing homes.
Moving a family member into a nursing home or assisted living facility is an incredibly difficult decision. But if your loved one needs more care or supervision than they can receive at home, it’s usually the best decision for their health and quality of life. It can also take the stress off of you, family members, and close friends who may have been caring for them around the clock for some time.
Although the two terms are sometimes used interchangeably, an assisted living facility is more of a residential environment with some health care amenities and services. A typical assisted living resident might have trouble moving around without a shoulder to lean on or be dealing with early memory loss that makes it hard to keep their medications straight. Nursing homes typically serve seniors with more serious medical conditions that require 24/7 monitoring, nursing, or therapy.
Medicare has a tool that can help you locate and compare long-term care facilities and home care workers in your area.
Once you’ve narrowed down your list of options and gathered your loved one’s relevant financial and insurance data, let’s meet and run some numbers. We’d be happy to help you work out a long-term care budget that provides for your family member while keeping your personal financial goals secure as well.