Making Plans for Aging Parents
By Pamela D. Wilson, CSA, MS, BS/BA, CG
Most parents don’t want to burden their children when it comes to the provision of care in their later years if they were responsible for the care of their parents. Other parents expect their children to care for them personally and financially. The only way to balance these expectations is to discuss options for long term care long before the care is needed and to have discussions and make financial plans today to cover likely expenses.
An important consideration is that by the time parents need care their future life expectancy may be only 2-3 years. At the time parents require care, a significant change in health has usually occurred: a broken hip, a heart condition or some other advancement of a longstanding health condition. Care needs prior to this have been minimal. The more severe the health condition and the level of health the parent was at prior to the change will indicate the length of time for recovery or at least stabilization or what I call health maintenance. While it’s true that we live with chronic diseases for many years, it’s the worsening of a condition that dictates the need for care.
There are many options for care. For example, parents can live in the home of the children or vice versa. While this is often not a preferred or ideal situation, it is a practical situation when finances are limited. That being the case, what modifications would need to occur to make this necessary? Adding a separate apartment with a separate entrance? Remodeling a basement? Installing a wheelchair ramp? Installing a walk in or roll in shower? If living together is an agreed upon plan, a budget should be established for remodeling costs and money set aside now. Assume costs anywhere from minor modifications of several thousand dollars to an addition costing $40,000 and up.
Even more critical is to document the sale of a parent’s home and all related financial expenses; this is extremely important if Medicaid will ever be a consideration. Consider retaining an attorney to make a legal document outlining how funds will be spend, the ability to reimburse for costs, a caregiving contract etc. Moving a parent into the home of a child and selling property can complicate Medicaid applications years down the road. These implications are rarely considered resulting in issues with application approval that were unexpected.
Other options that are more common: in home care, assisted living, nursing homes and other care communities. Review the costs. The average cost for in home care is $20-25 per hour; assuming 3 hours per day 7 days a week, this equates to about $2,100 per month or $25,200 per year. The average monthly rate for assisted living is $3,500 per month or $42,000 per year. A nursing home averages $200 per day or $73,000 per year. The question to ask is where would your parents prefer to live their last years and in what type of care situation? The other consideration is obvious, money and how much of it exists to provide care and support.
Researching long term care insurance is an option for many children who are able to pay or share premium payments with their parents provided that their parents are still healthy enough to qualify for a policy. This is an excellent but not often considered option that provides peace of mind that children will personally bear financial costs of care and that parents will be able to received needed care.
Long term care insurance, depending on the policy purchased, reimburses for costs of adult day care, home care, assisted living and nursing homes. A premium of $1500-3500 per year depending on the policy and the age of the individual when purchased appears favorable when compared to a cost of $73,000 for a single year in a nursing home.
Many believe that in retirement expenses decrease; these are only expenses related to the costs of employment. Health care expenses increase exponentially. Health insurance premiums, medication co-pays, medical supplies, hearing aids all adds up very quickly. Make plans to discuss long term care planning with your spouse, your parents or your children to reduce worry about the future. If you’re uncomfortable having these discussions hire an advocate. Through my company, The Care Navigator, I frequently lead these discussions for family.
Copyright 2012, 2013 Pamela D. Wilson, All Rights Reserved.