Long-term care is costly, whether you choose to hire a health aide, accept the caregiving services of a loved one, or opt for a nursing home.
To offer consumer guidance, U.S. News Health gathered leading financial and senior care experts for a live Twitter chat on Jan. 9, 2014, about options for managing the costs of long-term care. The experts included Laura Bos, financial security and outreach manager for AARP; Nathan LeBrasseur, scientist and associate professor at Mayo Clinic's Center for Aging; Jullie Gray, a certified care manager with the National Association of Professional Geriatric Care Managers; and Nicole Jewel, editorial director for Sharp Seniors. Claire Krawsczyn, senior public affairs manager for the American Health Care Association/National Center for Assisted Living, also took part.
They addressed a range of issues, including the importance of planning for long-term care; where to find insurance coverage, whether through private long-term care insurance – which is costly but helps cover the cost of in-home care – or Medicaid. They also discussed the costs and emotional toll experienced by caregivers.
[Suggested Reading: How to Pay For Nursing Home Costs.]
Planning for long-term care
Planning is critical, the participants agreed. Start by having conversations with family members about your wishes, weighing the availability of in-home care against nursing homes and other options. Talking these issues through in advance can be a relief for people needing care and the loved ones who care for them, the experts said. Yet only 24 percent of seniors do so, tweeted Miguel Guerrerro, community manager for Paying for Senior Care, an online elder financial resource locator. People prefer not to think about long-term care costs, tweeted Sharp Senior's Jewel. "This attitude is really dangerous for the entire family," she wrote.
Without a financial plan you may not be able to afford the type of care you prefer. A semi-private room in a nursing home costs approximately $80,000 a year or more; you have to deplete most of your assets before Medicaid can help with coverage. Home care costs about $45,000 a year, assisted living costs $40,000 a year, and adult day care centers cost $15,000 a year, tweeted Rachel McQuade, business writer for LTC Tree, a virtual long-term care insurance brokerage. These costs do not include additional expenses, such as incontinence briefs, walkers or modifications to make to your homes, along the way. In a nursing home, for instance, costs are usually based on a flat daily rate, tweeted Gray.
The vast majority of seniors prefer to stay at home, tweeted members from the Partnership for Quality Home Healthcare. This option is also less expensive. "We know that you can serve three individuals at home for every one served in a nursing home. Makes good financial sense," tweeted Elaine Ryan, vice president of state advocacy and strategy integration for AARP. Caregivers who do choose to care for loved ones at home need to factor in the importance of accommodating the needs of a person who may be frail, have limited mobility or are vulnerable to falls and other mishaps. The cost of modifications, such as installing ramps or widening doors must be taken into account when preparing to care for someone at home, Bos wrote.
Jewel pointed out that sometimes aging at home simply isn't possible. Some people require the medical and custodial services a nursing home provides.
The cost of caring
Caregivers are the hard-working benefactors that make staying at home possible, AARP said. They may be relatives or friends; they provide care themselves, sometimes with professional help, sometimes without. Adult workers often give up their jobs to care for a friend or family member, which can be more costly than people realize. You'll not only lose wages but also payroll contributions to your 401K, Social Security and other savings or investment plans, Gray wrote. "That can hurt you when you retire," she added. The lost wages and benefits of caregiving add up to $3 trillion a year, tweeted Caring Across Generations, a campaign for senior Americans.