Paying for Elder Care
- Money Management
- Michael Hickey
Life changes a lot as we grow older, including how much money we spend and how we spend it. There are plenty of new expenses when caring for yourself or an aging loved one, and these costs can be overwhelming if they creep up unexpectedly. From senior homes to new health care options, C&N lays out how these costs and decisions may impact you. At any age, it’s vital to be prepared for the effects that age can have on your wallet.
Elder Care Services Bring a Change in Costs
It may be surprising just how many costs are associated with advanced age. Depending on the care you need, you may need to spend more or less during the golden years of your life. Below is a list of the national average costs associated with elderly care.
Nursing senior home care
Semi-private room ($260/day or $7,908/month)
Private room ($297/day or $9,034/month)
Assisted living elderly home care
One-bedroom unit ($119/day or $3,628/month)
In home health care services
$169/day for home health aid, $398/day for registered nurse
These costs may vary depending on the state and the type of care you will need (e.g, non-medical, adult day care, assisted living). For an estimation of these costs relative to your state/region, use this “Paying for Elder Care” calculator.
Senior Care Resources
As you age, new decisions need to be made about how to manage your remaining money. There are many options available as you grow older that you may want to consider.
Carefull™ is a great resource for C&N customers that acts as a second set of eyes watching over your money. Carefull will help protect older adults against fraud, misuse, identity theft and more. The best part? This service is completely free for C&N customers.
Trusts may all have the same agenda of protecting your money, but not all of them will suit your needs to the fullest potential. Irrevocable Trusts, for example, are eligible for Medicare and will transfer your assets to a trustee. Revocable Trusts, on the other hand, are not eligible for Medicare but allow you to retain control over your assets. Meanwhile, Pooled Trusts help protect the excess income from a Medicaid recipient who would otherwise be forced to turn it over if they were in a nursing home.
Personal Care Agreements allow you to pay a lump sum to a caregiver for future home care services that you may need. This can reduce the size of an estate, thus improving chances for Medicaid eligibility.
Spousal Transfers are another option available to older individuals, which allow you to transfer your assets to your spouse and not be penalized under Medicaid. As long as your spouse is legally obligated to provide your care, you can become eligible for this option.
Lastly, Spousal Refusals allow certain income and assets to be exempt from Medicaid if you have a spouse. In addition, once you sign a Spousal Refusal, it automatically makes your spouse eligible for Medicaid. For a full list of resources that are available to you based on your ZIP code, please visit NCOA.
Elder Health Care Insurance Benefits
You may be familiar with the terms Medicare, TRICARE/CHAMPVA for life, and Medicaid. However, it’s important to dig into what each covers
Medicare covers medical care (80% of costs), but not personal care. You may be wondering what the difference is. Medicare will cover walkers, as they are considered medical care, but not bathroom grab bars since those are personal care items. Similarly, Medicare will cover ostomy supplies, but not adult diapers.
Explore a full list of medical equipment coverage. Additionally, certain drugs can be covered under Medicare, but there most likely will be deductibles and coverage gaps included.
2. TRICARE For Life/CHAMPVA for Life
TRICARE and CHAMPVA are similar health insurance policies, but you may only be eligible for one of them.
- Active military members and retirees who have served at least 20 years are eligible for TRICARE.
- Family members of military veterans who are at least 65 years of age are eligible for CHAMPVA.
- Both policies assist in covering co-payments and deductibles but provide little home care assistance toward non-medical eldercare services.
- Similar to Medicare, these policies do not cover personal care.
- Both options cover some skilled nursing care as long as there’s a medical condition that was treated in a hospital for 3 consecutive days and the patient was admitted to a skilled nursing facility within 30 days following discharge from the hospital.
- Both also cover health visits for medical purposes for seniors that are confined in their homes and unable to visit a medical facility.
- Neither policy covers medical care or adult day care centers but will cover hospice care if offered as an alternative to further medical treatment.
Medicaid is available to those who are considered low-income individuals and who have limited financial assets. You can find out how to determine your eligibility at medicaid.gov. This policy will in turn pay for unlimited nursing home care, home health care, personal care, homemaker services, nutrition services, and hospice care.
Depending on which state you live in, some assisted living is covered by this policy. In New York, you can access the state’s Assisted Living Program (ALP) which provides 4,200 units statewide in assisted living communities. In Pennsylvania, the state does not provide financial assistance for care services funded by Medicaid, however, the Department of Aging Waiver provides care assistance in domiciliary care homes. Some adult day care services, like social adult day care, adult day health care, and specialized adult day care are covered. It also covers some medical alert services, such as electronic home monitoring, telemonitoring, and aging-in-place technologies.
How to Save for Elder Care Costs Ahead of Time
Understandably, these costs can be overwhelming when looking at them all at once. That’s why C&N offers various resources to our customers so they can become better prepared financially before reaching an advanced age. Use our free savings goal calculator to learn how much money you must contribute each month in order to meet your needs.
In addition to our free resources, we also offer our customers savings solutions to help you achieve these long-term goals. From tax-advantaged health savings accounts and interest-bearing personal savings accounts to certificates of deposits and individual retirement accounts, these savings solutions may help you more comfortably afford these elder care costs down the road.
While there is much beauty and wisdom with age, it can present challenges, both physical and fiscal. Your friends at C&N are here for you through every stage of life. For more information or to set up an appointment with one of our experts, connect with us today.
Disclosure: This article is for educational purposes only and doesn’t constitute tax, legal or accounting advice. Please consult with an attorney or tax professional for guidance. All insurance policy information was taken from their respective websites and is accurate as of May 1, 2023. Costs, coverage, benefits and qualifications are subject to change at any time.
Mike joined the C&N wealth management team in early 2018 as a financial consultant in the South Region. Prior to joining C&N, Mike worked as a financial consultant for Santander Bank and also with MetLife. Mike is a graduate of the Pennsylvania State University and holds his Series 7 and Series 66 securities licenses as well as his insurance licenses.