The Cost of Elder Care: Options at a Glance
There are various options available to people in need of long term care, and each has its own probably of occurring without planning, and each has its own cost. This article summarizes each, with the conclusion that proactive planning is always the best way to ensure you age in the way you want, for the lowest cost.
Proactively addressing the care you may require as you age is critically important. The results of failing to plan can not only be financially devastating, but a lack of proper day-to-day care and comfort for yourself. It also can cause significant stress on your family, and even separation from your spouse. We all know someone that has had to go to a nursing home. I’m willing to bet none went there because they wanted to, and the very serious salt in the wound is that it’s also incredibly expensive—averaging over $12,000 per month in the Hudson Valley!
The good news is that there are options, and that there is very little, if any, “downside” to a better result—it’s just a matter of thinking about it, and doing something about it, now.
It is important to be comfortable with the idea that there is some cost involved in preventing the need for high-level care and its high cost. Working with an experienced and client-focused Elder Law attorney to ensure that your assets are protected and that you are managing that cost provides that comfort.
1. Aging “In Place”
- Likelihood without planning: Low
- Cost: Low
Most people like the idea of staying in their house for the rest of their lives. Most people also assume that this automatically happens, without having to think about it much or do any planning. After all—they already live there—what could possibly happen that could change that? As we who have family and friends that have had to go into a nursing home know: a lot could happen.
There are options to try and remain at home as long as possible. The most important thing to do is to seek out in-home care before you have high-level care needs. All too often, someone that could use some low-level care (i.e. daytime companionship or meal preparation) doesn’t bother to seek it out, because they are worried about loss of independence and/or cost. Perhaps they can “get by” themselves, but too often they will then have an accident or mental decline that could have been prevented had they been receiving even that low-level care.
Once there is such an accident or decline, then they do need a high level of care, which comes with a high cost. The cost for care in the home is relatively low, especially if you address it early enough. And for increased levels of care, Medicaid coverage is available, as long as you have protected your assets properly.
2. Assisted Living
- Likelihood without planning: Moderate
- Cost: Moderate to High
Many people recognize that staying in their home may not be realistic. Whatever their circumstance, they prefer the idea of living in a community with other seniors where they don’t have to worry about maintaining the house and the yard, preparing meals or managing their medications, and where there is entertainment and social life.
Assisted living facilities allow seniors to live independently, while freeing them from those obligations. They also serve a range of care levels, such as simple meal preparation and medication management, up to higher-level care for residents that have some decline in mental capacity. However, they do not have the highest care level available. If you need 24-hour nursing care, you will need to leave the assisted living facility and go to a nursing home.
The cost of an assisted living facility is moderate to high, depending on the level of care you require. It typically ranges from $3,000 – $8,000 per month. In certain assisted living facilities, Medicaid can also cover a portion of this (again, if you have property protected your assets).
3. Nursing Homes
- Likelihood without planning: High
- Cost: High
Many people who develop significant mental or physical infirmity during their later years require round-the-clock care. Coordinating it in their homes is almost never a feasible option, assisted living facilities do not provide that level of care, so the only option is a nursing home. As mentioned before, the average cost of a nursing home in the Hudson Valley is over $12,000 per month. The only ways to pay for it are: (1) out of pocket (spend down all your savings and possibly the equity in your house), (2) Long- Term Care Insurance (a valuable tool if you have it, but many people don’t), and (3) Medicaid. Notice that Medicare is not listed—it does not pay for a long-term stay in a nursing home.
Because we don’t want to spend down all our assets, and many of us don’t have long-term care
insurance, Medicaid is the preferred way to pay. However, you have to financially qualify to get
Medicaid coverage. If you haven’t properly protected your assets proactively (at least 5 years prior to needing the care), you will need to spend down a significant amount of your assets before Medicaid will cover the nursing home costs. Even if you haven’t done any planning, an experienced Elder Law attorney can help you save a lot of your money—usually at least half—which is better than nothing.
However, with proactive planning, you can protect a strong majority of your assets from being spent-down.
4. Continuing Care Retirement Communities (CCRCs)
- Likelihood without planning: None
- Cost: Moderate
CCRCs are all-inclusive communities that offer all levels of care in one place. There are independent apartments that range in size and amenities, assisted living services if needed or desired, and nursing-home level care that is on-site. They typically also have a broad range of amenities, such as a variety of dining options, entertainment and activities, and transportation to local shopping and dining areas.
One of the primary benefits of a CCRC is certainty. Your residence agreement with the CCRC provides that you will stay on-site for as long as you want, regardless of the level of care that you require. While most people would find this to be important, it is particularly important to married couples. None of the other options—home care, assisted living, or nursing homes—have a method to ensure that spouses stay living together for, as they say in their wedding vows, “as long as they both shall live”. In any of the other options, if one spouse requires a higher level of care than the other, keeping them in the same living arrangement is very difficult and there is no limit on the cost. It is often an unrealistic burden on the other spouse, which in turn can often lead to the “well” spouse needing more care sooner, too.
CCRCs have differing cost structures, but typically there is a downpayment, of which a large portion is often refundable, and then a set monthly rate that rarely, if ever, changes.
The moral of this story is that without planning, high levels of care, and high cost, are more likely, while staying where you want, with your spouse, and living on your own terms is less likely. However, with proper planning, the likelihood of living and doing what you want, with your spouse, increases significantly. There are professionals, like those at DuBois Law Group, PLLC, whose job it is to make sure of that.