If you or an elderly loved one have been assuming you could escape the high costs associated with nursing home care by relying on in-home care, the latest Genworth Financial study on long-term care costs suggests that you’re at least partially correct. Much has been said and written in recent years about the continual rise in nursing home costs across the country – a trend that has seen the cost of a private long-term care room in the Indianapolis area soar to more than $88,000. According to the latest survey results, those numbers are expected to continue to rise, with the cost of that same room reaching $100,000 a year by 2020. For many families, it is clear that another option is needed.
In-home care has long been one of the preferred alternatives to long-term nursing care. Typically, these services involve either homemaker services that help with daily tasks that seniors are unable to perform on their own – like cleaning, cooking, and similar tasks – or home health aides who provide nurse’s aide care in the patient’s home. That care is often perceived as being but a fraction of the costs charged by traditional nursing homes, and is thus viewed as a great alternative to long-term facility care or a stop-gap measure for patients who are waiting to be eligible for services like Medicaid. It is also a choice made by many elderly patients who simply want to maintain the independence that comes with maintaining residence in their own homes.
Costs are Rising
The new study reveals that costs are rising in virtually every area of senior care – including in-home homemaker and home health aide care services. While the overall costs are still lower for in-home care than long-term care outside the home, the fact that those costs are continuing to increase at a time when many Americans’ own incomes remain stagnant is a real cause for concern. It remains part of a larger trend of rising senior care costs that will only present today’s seniors – and those of the future – with even harder choices about their own retirement needs.
That increase in costs has continued to affect the cost of long-term care insurance as well – something that many families rely upon as they try to plan for future care needs. Obviously, anything that makes it more difficult for those families to manage long-term insurance coverage costs is only going to exacerbate the challenges they face as they try to prepare for an uncertain future. And since Medicare does not cover that type of long-term care, those who lose their ability to maintain long-term care insurance today may find themselves with little choice other than to rely upon Medicaid coverage in the future.
According to the American Health Care Association, the cost of nursing home care has risen primarily as a result of the rise in the number of patients suffering from chronic medical conditions. These patients’ increased care needs have resulted in more medications and treatments being administered, and all of those things cost money. Services like in-home health care have likely increased in cost as that industry keeps pace with other areas of the healthcare marketplace.
Indianapolis In-Home Care
The Genworth Survey showed that the average daily cost of home health aide care in the Indianapolis area is $45,760 annually – a number based on 44 hours of care each week. Those services have been increasing by 1-2% for several years, and future growth in cost is anticipated to be at similar levels. By 2020, that cost is expected to rise to more than $51,000, and could be as high as $61,000 in a decade. And while that cost is still nearly half the expense associated with private rooms in a nursing home facility, it still represents a tremendous burden for the average senior and his family.
Fortunately, not all seniors actually contract in-home services at that level. Many try to maintain lower costs by limiting the number of hours of service that they receive. For example, many seniors will only have a home health aide come into the home for several hours a day – a decision that can cut those costs in half over time. Still, even when those aides only provide services for three or four hours a day, the annual costs can still exceed $25,000 or more. Without a proper plan in place, those seniors can see their life savings totally consumed in very rapid fashion.
Beating the High Costs of In-Home Care
As you might expect, many seniors haven’t had the opportunity to build up the kind of nest egg needed to maintain that level of care over time. To effectively ensure that they can get the care they need when they need it most, all seniors need to have some sort of strategy in place. A good plan can ensure that you have a strategy ready to pay for in-home care without substantial delays, and without completely exhausting your savings.
There are many different options for paying for in-home care, including:
- Long-term insurance. Since some of these policies only cover nursing homes, you will need to make sure that the coverage you choose is appropriate for your care preferences.
- Life Insurance. If you or your senior loved one has a life insurance policy that can be sold back to the insurance company, that can also be an option.
- Veterans benefits may be available for some who have served during times of active combat.
- Annuities can provide a monthly income that can help minimize the impact of in-home care.
- This is the option selected by many seniors for all long-term care needs. It too is something that should be prepared for well in advance of the time when you’ll need it.
Preparing for retirement and the high costs of in-home or nursing care is complicated, and you’ll likely need an experienced hand to help you develop the right strategies. Frank & Kraft Attorneys at Law has the experience and expertise you need to ensure that your asset planning strategies are designed to help you cover the high costs of senior care. Contact us online or call us at (317) 684-1100 today to learn more about how we can help you beat the rising costs of senior care.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.