Paying for the care of an aging loved one is a concern for most families and far too often the costs of care come out of their own pocket.
When it comes time to utilize assisted living services for your loved ones it’s helpful to know you have options and how to utilize them.
In this article, we will discuss in greater detail these 5 ways to pay for assisted living costs for a family member or loved one.
- Long-Term Care Insurance
- Private Pay
- Waiver Programs
If you’re looking for information on the types of care options and services available, read our previous article on Types of Senior Care and Services.
Senior Care Costs and Funding Options
Skilled medical workers are specialized, trained individuals and the services provided are priced as such. Those services are covered more readily through traditional medical insurance plans. Assisted living communities and in-home services, like what is provided at Assisted Living Services, have various routes for funding, which will be explored here.
There are two umbrella types of senior care funding: private and government-subsidized. The type of funding available to an individual or family varies depending on many factors, including income, age, disability and type of care. Working with a senior advocate is often helpful to identify available assistance. At Assisted Living Services, we will gladly walk through the process and help answer questions so that the best solution is reached. [Jump to Connecticut specific information]
Long-term Care Insurance
Long-term care (LTC) insurance is a policy that is purchased, by an individual, for future use for eldercare. These policies are similar to any type of insurance. A premium is paid into the plan; the price is set according to the number of years before anticipated use, the amount of coverage purchased and the percentage of payout. Premiums can be fixed, or more likely, increase as a person ages by a percentage, often based on inflation.
If a care insurance policy has been purchased, the funds can be applied toward the type of senior care stipulated in the terms. Most policies today include payment for facility care and in-home care. These insurance policies are evolving as the population ages and insurers see the demand for care funding. Be sure to know exactly what a policy will reimburse, how long it will make the payments and if there is a cap on coverage, to name a few.
For more information on whether a LTC policy is the best avenue, visit http://blog.aarp.org/2015/02/05/should-i-buy-long-term-care-insurance/ and https://www.thebalance.com/pros-and-cons-of-long-term-care-insurance-2388725 to make an educated decision.
Private funding is the most traditional way of funding eldercare. Each situation is different and if the private pay route is deemed best by a family, early preparation is key to ensure enough funds are available to cover expenses for as long as a loved one needs care. Retirement planning should include savings for health care. Investments can be drawn upon as needed to fund care. Private pay is often a more realistic option for individuals that will have assistance from family as caregivers. Private pay includes options such as out-of-pocket pay, annuities, reverse mortgage, life insurance and sibling care agreements, which allows for children to pay for care and then be reimbursed when an estate is settled. Each of these options should be discussed fully with trusted financial and legal partners.
Private pay and LTC insurance are often used together to fund care as well. If there is liquidity in personal resources, a smaller LTC policy can be used to bridge any gaps.
Medicare for Long Term Care
Medicare is government funding for a limited amount of care. It does not provide for extended care nor non-medical daily care. Uses include care immediately following a hospital stay, short-term, physician-prescribed home health care for skilled nursing; physical, occupational and speech therapy; as well as limited-time assistance with bathing, feeding and other personal care.
Medicare covers up to 100 days of long-term care in limited instances, and it helps cover the cost of some durable medical equipment for home use. It may also cover hospice care for people diagnosed with a terminal illness and a life expectancy of six months or less. The criteria to use Medicare in these instances is stringent and patients and families are better served by contacting their state agency for help during the process.
Medicaid For Long-term Facility Care
Also a government-funded program, Medicaid programs vary by state. Assistance is determined primarily on financial need. Most individuals that receive SSI (supplemental security income) will qualify for some level of Medicaid. If a person qualifies, the program will pay for long-term facility care and most other costs that Medicare does not cover. It may also cover some in-home care services.
An individual may still qualify if income exceeds a state’s eligibility level. And in several states, even more, seniors may qualify for Medicaid after they have spent their own income and assets on nursing home or other healthcare expenses. This “spend down” is why it is important to plan as much as possible for some portion of self-pay for care expenses.
More than 98% of long-term facilities in the United States accept Medicare or Medicaid in some way.
Most states have created separate Medicaid programs that allow funds to be used for in-home senior care. These waivers offer more flexibility for families by giving the option to choose who will provide various types of help, allowing individuals to age in-home. With this option, family members can be hired to provide personal care. Assisted Living Services proudly works with families to implement this solution.
These programs often provide the most optimal solution for families, but it is important for family members to understand what level of caregiving they will need to provide.
The Cost of Assisted Living in Connecticut
The state of Connecticut has an overall higher cost of living compared to the rest of the country and ranks 5th for highest costs of senior care according to a 2012 MetLife Mature Market Institute home health care study. Assisted Living Services is proud of the fact that we offer superior services at an affordable price.
At Assisted Living Services, our staff is trained above what is required by state law. As non-medical care providers, we do not have to have certification for our team members but feel the additional knowledge they gain through a Home Health Aide or Certified Nurse’s Aide program provides an additional level of care and peace of mind for our clients. This value-add makes our services an exceptional care option while respecting the financial concerns clients may have.
In Connecticut, the average cost per hour for homecare (assisting with activities of daily living) is approximately $26. The overall average in the United States is $21/hour. Reasonably, a family can expect to spend around $27,000 per year if in-home assistance is used for 4 hours a day, 5 days a week. This is for non-medical assistance. Skilled medical assistance, such as therapy or medical intervention, would be an additional expense. *
Comparatively, the annual costs for a private room in a long-term care facility reaches $148,000 and private apartments or rooms at assisted living facilities generally start at $5000/month or almost $60,000 per year. These facilities’ prices do factor in living expenses (such as rent, utilities, and food) into their fees. *
As mentioned early, Connecticut has a state Medicaid waiver program, of which Assisted Living Services, Inc. is a provider. (Read about one of our success stories.) The States Medicaid Funded program is called Connecticut Home Care Program for Elders (CHCPE). Within the CHCPE is the Adult Family Living / Foster Care Program.
To be eligible for CHCPE, applicants must be 65 years of age or older, be a Connecticut resident, be at risk of placement into a long-term care facility and meet the program’s financial eligibility criteria. Individuals that need assistance with critical needs such as bathing, dressing, eating, taking medications, toileting typically meet the needs criteria. The CHCPE helps eligible clients continue living at home, with the help of home care services, instead of going to a long-term facility.
Adult Family Living / Foster Care is slightly different in that it allows family members to help with care. Under AFL, an elderly individual moves into the home a family member or friend, or the family member or friend moves into the home of the elderly individual. A qualified provider agency, like Assisted Living Services, Inc. provides training, quality oversight, and support for the family member or friend working as the caregiver. The caregiver cannot be a legally liable relative – such as a spouse.
They receive compensation for providing the elderly individual with assistance in handling their activities of daily living. With AFL, care providers receive compensation for their caregiving efforts depending upon level of care. There are currently four levels of care/compensation for this foster care program. As an example, for the highest level of care (Level 4), weekly compensation to the caregiver is over $500. The compensation is generally considered a stipend for Foster Care which is non-taxable income.
Funding senior care can be frightening and stressful. However, there are options to help bridge gaps and ensure quality care is available to elderly individuals. Please let Assisted Living Services know how we can help.