How expensive is it and how much will Medicare cover? These facts can help kick start a conversation.
Like many seniors in relatively good health and enjoying their independence, my grandparents never wanted to discuss the idea of moving into an assisted living facility. Unfortunately, this meant that they never had an open conversation with their children, including my mom, about what would happen if the need for long-term care ever arose. So the family had to make a lot of big, difficult decisions at the last minute.
This is an all-too-familiar scenario for many families. Without an elder care plan firmly in place, loved ones can end up moving far distances due to low vacancy rates and high costs within facilities closer to home. Even if your family has the luxury of time on your side, the dizzying array of elder care options can make it difficult to find the best level of care at an affordable price.
Of course, the type and length of care you will need cannot always be predicted. But planning ahead financially is something you can—and should—control. Now that it’s my turn to have that conversation with my parents, I’ve armed myself with some useful facts.
Over the past decade, costs have risen steadily for all kinds of long-term care. Just take a look at the national median rate for these common types of elder care1:
Costs also vary depending on where you live. This long-term health care calculator, on the AARP website, can help you estimate the various costs of elder care by state and region. This handy tool even allows you to compare regions and states against each other.
What does Medicare cover?
Medicare only covers the first 100 days of a convalescent nursing home stay (a semiprivate room at a Medicare-certified skilled nursing facility) following a three-day inpatient hospital stay. For days 21-100 in a skilled nursing facility, there is currently a $161 coinsurance per day of each benefit period.2 For anything above and beyond that, the patient is expected to pay out of pocket. According to government figures, the average nursing home stay is 835 days (more than two years).3 If your parents have Medigap or other long-term care insurance already in place, they can help offset those out-of-pocket costs.
What about Medicaid?
Medicare may also pick up the tab for up to 35 hours per week of home health services for up to 60 days. This may include intermittent skilled nursing care, physical therapy and other services specific to your parent’s health condition; homemaker and personal care services are not covered. Anything above that may be covered by Medicaid—but only for those with limited income and assets. More details about the financial requirements can be found here.
Be warned: Any money given away as gifts to loved ones within the five years prior to applying for Medicaid may count as an asset and therefore, disqualify your parent. Their home won’t be counted as an asset, although the government may make a claim on it to reimburse care costs if the owner dies while receiving Medicaid benefits. Passing the deeds over to family members would need to have been done at least five years in advance in order to protect it from such claims. An asset-protection trust may also help. Medicaid laws vary from state to state, so speak with an elder law attorney about the best way to protect your family assets if the need for long-term care arises.
“We’ll cross that bridge when we come to it”
Unfortunately, this was my grandparents’ response whenever my family tried to broach the subject. Nobody likes to think about aging and the high level of care one might need. In the case of my grandfather, he spent his final days in my mother’s home, surrounded by loved ones, while receiving the professional care he needed. After he passed away, my grandmother moved into an assisted living facility two-and-a-half hours away from where my mom lived—not what she would have wished but the only affordable option.
That’s why I’ve asked mom and dad about their wishes and intentions, while they are relatively young and healthy. Here were some key questions:
Private health insurance does not typically cover long-term care, so the next step is to explore long-term care insurance options. Knowing the availability and costs of local facilities and home care services can help you and your parents plan ahead financially.