When it comes to creating a safety net for retirement, Baby Boomers are looking at weaving together their savings, benefits and insurance; however, estimating needs and costs for the future can feel overwhelming at times. As we are living longer and longer, we will inevitably need to look at long-term care. Understanding common care options and costs is a good starting point for financially planning for a longer life. Genworth Financial completes an annual care survey that gives us a snapshot of the Washington State median of care costs. It can be a helpful gauge.
Long Term Care Costs in Washington State
|Long-Term Care Service||Annual Costs in 2016||5 Year Annual Growth|
|Home Health Aide||$56,834||4%|
|Adult Day Health|
|Adult Day Health Care||$17,680||3%|
|Assisted Living Facility|
|Private, One Bedroom||$54,000||2%|
Understanding the Types of Long Term Care
Finding appropriate assistance in the home is usually a family affair. Often care needs become too complex or the family is not able to balance work and caregiving responsibilities. Whether there is a medical event that changes the circumstances or the needs just gradually increase over time, professional long-term care services are often needed. In fact, according to LongTermCare.gov, a person turning 65 has a 70% chance of needing some type of long-term care services in their lifetime and the average duration of care needs is 3 years. Of course, every situation is different depending on the needs of the individual.
The options below offer different venues and levels of care to meet a variety of needs. Individuals may need more than one type of long-term care in their lifetime. Read through the most common options below.
Home Care/ Home Maker
A caregiver is able to provide the long-term assistance within the home, providing the necessary personal and environmental care. Services can be arranged - from a few hours per week to 24-hour live-in care - to assist with activities of daily living. These services are not covered by Medicare and recipients must pay out of pocket or use long-term care insurance to cover the costs.
Home Health Aide
These caregiving services are provided for more medically complex situations within the home. Individuals using Medicare can use home health aides for only a limited period of time. These health aides visit for up to 4 hours in the home.
Adult Day Health Care
These centers are a resource for family caregivers to receive respite care, allowing family caregivers time for a break. They provide community engagement through activities with proper assistance and supervision. Services are limited to day hours and they do not provide 24-hour care. Depending on the facility, they may offer certain health services.
Assisted Living Facility
These are residential facilities that offer personal care for those needing an intermediate level of assistance with activities of daily living. Residents do not need the more complex long-term care needs of a nursing home. They can often strike a balance between safety and independence.
This residential facility is for those who require a high level of on-going personal care and supervision, to manage an advanced illness or age. A higher level of care is offered here, including 24-hour nursing care.
Understanding Long-Term Care
Whether delivered at home or in a facility, different types of long-term care can include a wide variety of services. What can be confusing is finding the line between what Medicare will cover and what it will not, what is a medical expense and what is a long-term care expense. Briefly, Medicare is used to cover short-term care. This might include a short stay in a hospital or a few days in a rehabilitation center. This is referred to as â€œacute care.â€ Once your condition extends past the time limits of coverage, it is labeled "chronic care" and considered long-term. Any assistance within the home to help with day-to-day living is also considered long-term care and is not covered by Medicare. A few examples of what counts as long-term care:
- Personal Care: Dressing, bathing, eating, toileting, etc.
- Household/ Environment Care: Housekeeping, laundry, meal preparation, grocery shopping, transportation, errands, etc.
- Medical Support: Medication Management, Geriatric Care Management, Chronic Diseases Management, Dementia Care, etc.
With longer life comes the increased need for healthcare. It is crucial for Baby Boomers to be savvy healthcare consumers. While we may think that medical expenses are synonymous with long-term care costs, they are actually separate expenses and treated very differently. Examples of these types of costs are:
- Medical Tests and Exams
- Routine Doctor Visits
- Specialist Doctor Visits
Spending Money to Save Money
Looking at these costs should help us consider how far our savings and supplemental insurance needs to reach to cover the costs. While it may seem counter-intuitive, there are a couple key ways that spending money now will help you save money and meet the needs later in life.
- Long-Term Care Insurance: There are a few variables to long-term care insurance including the daily amount they will pay out for LTC, the total duration of the coverage, and what is covered in the costs. Like any other plan, the greater the coverage, the higher the monthly premiums. It is important to find the right balance for your financial situation. While ongoing payments for LTC insurance while you are still healthy may seem like a waste of money, it can be a helpful tool in protecting your assets in the high likelihood you will need LTC services later.
- Geriatric Care Management: A Geriatric Care Manager is an elder care professional trained as a Registered Nurse or Master of Social Work to serve elderly or chronically ill individuals. They create a customized plan of care, guide families through the healthcare maze, find appropriate services and proactively monitor care. Their expertise in the field and connection to resources and information help families save a great deal of money through:
- Navigating proper placement to avoid moving from facility to facility
- Proactively adjusting care needs before they become bigger issues
- Increasing safety within the home to reduce the risk of falls or injury
- Monitoring care and implementing doctor's orders to reduce the risk of hospital readmission.
- Coordinating transitional care, saving families time and stress
- Acting as a liaison between doctors & facilitating effective communication during appointments
- Coordinating care so family members do not have to miss work or other responsibilities
- Educating, researching and providing professional guidance on the best care solutions leading to a higher quality of life
Published on April 24, 2017.