Paying
for Care
Paying
for Senior Care is a very important issue that every family should consider.
Having to assist a loved and cherished senior member of your family through
the process of finding a senior care solution, can be challenging enough,
without the complexity of finances.
Various
factors will influence the financial cost, and of course, may determine
your decisions. Fees for senior care vary tremendously depending
upon what option you select. You may also be influenced by available
finances, either private retirement funding, property capital, or medical
insurance.
The
cost of funding senior care will be determined by the level of physical
and medical care, also by the size and location of the facility, be it
a nursing home, care home, assisted living or retirement community. This
means you could be talking about anything from $500 to $10,000.
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There
are some subsidized senior housing projects available, sometimes referred
to as congregate housing, HUD housing or Section 8 housing. Here
you pay half the rent whilst the government funds the rest. Unfortunately,
many of these programs have long waiting lists, and you do have to have
limited income and assets to qualify.
If
you opt for or Home Care there are also some programs that help to reduce
your home expenses so that your home can continue to be affordable solution.
If
you decide to sell your home to pay for care costs, be wary of the fact
that if you bank the proceeds from the sale, and therefore have assets,
you may |
still
not qualify for any government support. If you sell your property, and
then opt to purchase a senior housing unit for a similar price, then you
may still qualify for some funding assistance.
There
are some care homes that will accept a senior’s SSI income and pay a small
incidental monthly allowance to residents.
Some
funding sources like private health insurance provide strictly for medical
care. They do not pay for important custodial care such as help with bathing,
dressing, grocery shopping or getting around the house. Other funding sources
such as long term care insurance or Medicaid do pay for custodial care
costs but no medical care, and often have many limitations and restrictions
to what is covered. The costs of living for seniors needing housing with
services can be covered by a combination of the following:
-
Personal
or family money — assets like stocks and savings, plus income from a job
or investments.
-
Pensions
and Social Security retirement benefits — this is often the primary income
source for many seniors that can cover rent or mortgage payments.
-
Supplemental
Security Income (SSI) — monthly public assistance checks for seniors and
the disabled who have very limited income and assets.
-
Reverse
mortgage — can be an income source to pay for services to keep a senior
in their own home, or to pay for nursing home care of a very ill spouse,
or even pay for long-term care insurance.
-
Long-term-care
insurance — sometimes will only pay for nursing home care, but some policies
cover an array of services in a private home or in an assisted living type
of facility.
Medicaid
Funding for Senior Care
Medicaid
is the federal medical insurance program that provides medical coverage
and some assisted living for low-income seniors. Seniors who end
up spending their savings or assets on medical care will eventually qualify
for Medicaid. Eligibility varies from state to state, with lowest
limits at assets at $1500 and income at $600 per month. If over the
income level, it is possible to qualify by paying a monthly deductible.
Medicaid
will provide for some custodial care, be it in your own home, an assisted
living facility or a nursing home. However, be mindful that Medicaid
is not accepted as a means of payment by some medical institutions, and
many nursing homes will have a limited number of places for Medicaid residents. |
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Medicare
Funding for Senior Care
Medicare
will cover acute hospital care and some allied health professionals in
the treatment of the disabled and elderly. Most private health insurance
companies follow similar guidelines to Medicare. Coverage is strictly
for medical care, and does not cover housing costs. Assistance for
day-to-day custodial and personal care such as bathing, eating and dressing
is not covered. Medicare will sometimes pay for care in a nursing
home or skilled nursing facility, following a hospitalization, but only
for a limited convalescent period. Long-term nursing home care is
not covered.
Medigap
insurance may cover some costs that Medicare does not, but excludes cover
for custodial care.
Supplemental
Security Income (SSI)
SSI can
help to pay for senior housing costs, but the amount is very rarely enough
to cover such costs in most states. Some care homes have arrangements
where SSI goes directly to the home, and a small incidental allowance is
paid to the resident.
Long-term
Care Insurance
This can
be an option, and many policies are now quite flexible and designed for
much more than just long-term nursing home care, however, they can be expensive.
Home-Equity
Conversion or Reverse Mortgage
This too
often ends up being the way elderly people who are homeowners end up paying
for care. It is a way of borrowing money released from the equity
held in the home. Unfortunately, this is a sad way that many seniors
end up losing value in what they had built up as an inheritance for their
children. It needs very careful consideration, as it can result in
your heirs and children carrying the debt.
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