The Costs of Long-Term Care
Planning ahead for the costs of long-term care is never pleasant, but not planning should simply not be an option.
How many times in your life have you used the saying, “if money was not a factor?” For many, it is a thought that comes up as they think of the long-term care of their aging parents. After all, most people want all that money can buy for their loved ones. Unfortunately, “what money can buy” is becoming less and less for long-term care of aging parents. Most people are aware of the sky-rocketing costs of healthcare, but many adult children of aging parents are blindsided by the ballooning costs of long-term elder care.
How important is it to plan for long-term care? Statistics provided by the U.S. Department of Health and Human Services (1) show that seven out of ten people will at some point need assistance for basic activities such as getting dressed, bathing, and even feeding themselves as they age. While the thought of relying on others to care for you (or your aging parents) may be terrifying, the potential cost for having that basic care is even more daunting. Making plans for the sunset years of life where independence is slowly lost is never an easy task. It is an emotionally-charged area surrounded by fear, uncertainty, and sadness. Because of the difficulty of this transition, many people put off planning, not wanting to face the issue. The result is often heartbreaking: the unexpected happens and decisions are forced to be made in emotionally charged situations. In the long run, putting off planning usually ends up causing a great financial burden. Even though planning ahead for the costs of long-term care is never pleasant, doing so allows everyone to walk through those hard emotional times without the added pressure of the financial burden. This guide will walk you through some of those decisions that need to be made with your parents before you and they face the emotional challenge of declining health and abilities.
What are the Costs?
While most people want their loved ones to receive the best care possible, few realize what that actually means in dollars and cents. Unfortunately, this lack of knowledge may result in either settling for less than desirable care in the crisis of the moment or going ahead with the best care possible, leaving the elderly’s accounts emptied and their children scrambling to make up the difference. Consider the following monthly cost statistics from a 2017 Genworth Cost of Care Survey (2):
- Adult day healthcare: $1,517
- Assisted living facility: $3,750
- Nursing home, semi-private room: $7,148
- Nursing home, private room: $8,121
- Home Health Care, health aide: $4,099
- Home Health Care, Homemaker Services: $3,994
These staggering costs bring home the necessity of planning today for the care of tomorrow. It also illustrates the wide-range of care options that need to be considered.
Factors that Affect Cost of Care
There are a host of different factors that will affect the cost of your parents’ long-term care. Some of these factors cannot be determined ahead of time, as no one can predict the precise medical conditions they might face. However, it is important to understand some of the factors that could be involved in order to plan effectively.
ADL and IADL - One of the biggest factors affecting long-term adult care is the level of needs for which a person requires assistance. For example, will your parent primarily require assistance for things like grocery shopping, housework, and meal preparation; or will their needs be for more fundamental activities such as bathing, walking, or even getting out of bed? There are two recognized levels of needs for assistance: instrumental activities of daily living (IADL) and activities of daily living (ADL). Dr. Leslie Kernisan, MD MPH, is a board-certified doctor of internal medicine and geriatrics who runs a website devoted to education on caring for the elderly. She discusses IADLs and ADLs on her blog, giving insight into the differences:
- ADLs are basic life activities that most people learn as children. They include such things as dressing and grooming, feeding (this does not include meal preparation, but the very basic ability to get food from the plate to the mouth), walking, toileting (including knowing when to go, getting up and down from the toilet, and cleaning oneself appropriately), bathing, and transferring (which entails being able to move from bed to wheelchair, or from a chair to a walker, etc.).
- IADLs are defined by Dr. Kernisan as life skills that are usually learned as a teenager, including shopping and meal preparation, managing medications (this includes not just the ability to take medication as directed, but also the ability to procure the medications in the first place), caring for a home (both light and heavy housekeeping, cleaning after meals, and being able to keep up with maintenance such as changing lightbulbs, or finding someone to do heavier maintenance tasks), money management (balancing accounts, paying bills, etc.), successful communication (including the ability to make phone calls and keep up with correspondence), and being responsible for transportation (either transporting oneself or finding other suitable transportation). (3)
Interestingly, although skills or abilities that fall under the ADL category are more basic to survival, a government report by the Centers for Medicare & Medicaid Services (CMS) points out that seniors are much more likely to receive assistance with IADLs than ADLs (4). This really is not a surprising statistic, but it is one that certainly affects planning for long-term care. Setting up a schedule for different family members to help with grocery shopping is pretty feasible task for many families but figuring out how to get mom out of bed, showered, and fed every day can be much more daunting. Accordingly, the costs for long-term care involving ADLs will be much higher than those surrounding bringing in house-cleaning services, shopping assistance, etc.
- Mental Health Care – beyond the scope of ADL and IADL is the whole area of mental health care. Facilities providing for care of individuals with mental disorders such as Alzheimer’s and other forms of dementia are considerably higher than regular senior care facilities.
- Type of Care – not only will consideration need to be made for the possible types of assistance that may be needed, but also for where that assistance will take place. Possibilities include:
- Nursing homes, both government and private – these usually provide the highest level of care, including skilled medical care and assistance with ADLs.
- Assisted living facilities – often provide assistance with IADLs, but may not have skilled medical care.
- Senior living communities – are primarily for fairly independent seniors to live in close proximity for social activities and access to resources, but provide little to no actual assistance.
- In-home care – varies greatly depending on the needs of the individual.
Costs of each of these options will vary depending on where you live and the amount of care needed. Keep in mind, however, that not all facilities are equal. Investigate ahead of time what the facilities look like in your area. What costs are involved? Is the facility something that you and your parents would find acceptable? Most importantly, do not eliminate one care category simply because the first option you investigated appeared unacceptable. It may not be representative of all the other options in that category.
The Ins and Outs of Health Insurance Coverage
Many people falsely assume that their health insurance, whether private carriers or Medicare and Medicaid, will cover the costs of long-term elder care. Unfortunately, this simply is not true. Medicare and Medicaid have strict limitations, as do most private carriers. Although you will need to asses your parents’ specific policies, in general the following provisions for care apply:
- If there is any provision for elder care it is limited to medically necessary, short-term, skilled care. “Medically necessary” does not typically include the normal results of aging.
- Care provision in a facility must follow a hospital stay, is limited to 100 days, and must be for the same reason as the hospitalization (again, not just because of age).
- In-home care coverage is also usually limited to skilled care that is medically necessary (treatment of an illness or injury), limited in duration, and does not include assistance with basic self-care (ADL and IADL).
Essentially, health insurance of any kind is not a solution for the costs of long-term care. Health insurance is designed to help with the costs of illness and injury, and does not offer provisions for the costs of the normal process of aging.
Aging in Place versus Moving into Senior Care
If we must grow old and die, wouldn’t we all rather do it gracefully at our own home, surrounded by years of memories and familiar surroundings? While this may be the ideal, aging in place (defined by the CDC (5) as “the ability to live in one’s own home and community safely, independently, and comfortably, regardless of age, income, or ability level), has numerous hidden costs, the largest of which may not be the cost of bringing in assistants for daily living. Rather, the greatest cost may be remodeling a home to comfortably and safely accommodate the needs of aging owners. This requires anticipating in the present the needs of the future. Will the cost of remodeling the home and then paying for in-home care outweigh the benefits? Or will retrofitting the home cause more stress and more financial burden than moving into a smaller, more streamlined and accessible living situation?
Realize that the Costs are not Just Financial
While many of us focus on the financial side of elder care, the cost to emotional and physical well-being of the caregivers must also be factored in. Caring for aging parents is a sacrifice. An article in U.S. News makes a profound observation: “In some cases, these personal sacrifices can create bitterness and regret, causing ill will toward the very people you love and have pledged to help (6).” The stress of moving into this type of life can destroy relationships, break-down the health of family members turned caregivers, and take away the joy of spending time with grandchildren and other loved ones. This aspect of costs is vital to discuss with your parents so that together you can make a plan that not only cares for their physical needs and honors their budget, but also enables them and the rest of the family to enjoy their last days together as much as possible, regardless of how long or short those days might be.
- American Elder Care Research Organization. (2018, May). Activities & Instrumental Activities of Daily Living - Definitions, Importance and Assessments. Retrieved from: https://www.payingforseniorcare.com/longtermcare/activities-of-daily-living.html
- Menzies, Laurie. (2014). Embracing Elderhood: Planning for the Next Stages of Life. Embracing Elderhood Press.
- Administration on Aging. (N.D.) Eldercare Locator. Retrieved from: https://eldercare.acl.gov/Public/Index.aspx
- National Aging in Place Council. (2016 April 13). Best and Worst Bathroom Flooring for Aging in Place Safety. Retrieved from: http://www.ageinplace.org/Blog/Post/3583/Best-and-Worst-Bathroom-Flooring-for-Aging-in-Place-Safety
- U.S. Centers for Medicare and Medicaid Services. (N.D.). How to compare Medigap policies. Retrieved from: https://www.medicare.gov/supplement-other-insurance/compare-medigap/compare-medigap.html
- U.S. Department of Health and Human Services. (2017, October 10). Coverage Limits Chart. Retrieved from: https://longtermcare.acl.gov/costs-how-to-pay/what-is-covered-by-health-disability-insurance/coverage-limits-chart.html