When an elderly parent wants to stay at home, it is unlikely that they will be able to do so without some amount of help. Whether they will need assistance with personal care and daily activities or require specialized nursing care, it is the rare senior who can truly go it alone.
Even when family members are nearby to help, hiring in-home health care assistance will likely be necessary. The good news is that home care is usually much less expensive than moving your loved one to an assisted living facility or nursing home.
The need for in-home care is exploding with more and more aging baby boomers looking to age in place. According to the Bureau of Labor Statistics, the number of home health care aides will expand to approximately 1.3 million by 2020, an increase of 70 percent from 2010.
The Centers for Medicare and Medicaid Services report that Medicare and Medicaid currently pay for 65 percent of home health care costs. Other payments come from a combination of state and local governments, seniors themselves and private insurance.
Many adult children stress over how they will be able to afford in-home care for their elderly parent. The truth is, it ends up being more affordable than they think. Further, the IRS allows tax deductions for certain medical expenses. What follows are some of the most common ways to cover the costs of in-home health care:
When your parent uses savings to buy a conservative annuity designed for retirement, a lump sum is paid to a financial institution and a predictable monthly income is provided for life. A tax or financial advisor can help you decide if this is the best option for your parent.
There are several nonprofit groups that help pay for in-home care, especially if the individual suffers from a specific medical condition such as Alzheimer’s or diabetes, for example.
Individual or Group Life Insurance Policies.
Some policies have cash value that can be used toward qualified in-home care expenses. An accelerated death benefit charges for long-term care up to a certain amount per day or month. Typically, these benefits are capped at 50 percent of the death benefit.
Long-Term Care Insurance.
This type of insurance pays for health and personal care in a variety of settings—including private homes. Financial planners will tell you that it is in your best interest to buy this type of insurance before it is needed. It also is important to choose your policy carefully as different companies have different benefit conditions.
Medicaid and State Programs.
Medicaid benefits vary from state to state so contact your regional Agency on Aging to learn if your parent qualifies.
When in-home care is needed for only a short period of time, Medicare may cover up to 100 percent of the costs for low-income seniors. Seniors who don’t qualify for standard Medicare may qualify for in-home personal care through All-Inclusive Care for the Elderly.
This type of mortgage provides cash for in-home care but the homeowner is still responsible for taxes and other bills. Tread carefully with this option as equity in a home can run out while care is still required. A financial, mortgage or tax advisor can help you decide if this is a good option for your parent.
The Veterans Administration offers a variety of subsidized home care services for veterans and their families. Contact your local Veterans Administration office for information.
The majority of today’s seniors say they would prefer to stay in their own homes as long as possible. In-home care provides them the freedom to do so without breaking the bank.