Elder care can be confusing, especially when it comes to understanding who covers what among a wide array of services.
There are six major ways to pay for elder care:
Elder care costs the average family caregiver more than $5,500 each year in out-of-pocket expenses, according to the American Association of Retired Persons (AARP). If an individual doesn't have any of the coverage options listed below, the outlay will be even greater. The most common expenses come in the form of paying for non-medical senior care services to help someone remain at home and paying out-of-pocket for insurance premiums, co-pays and deductibles. The biggest expense for about seven percent of Americans 75 years of age and older is nursing home care, which can run as high as $70,000 to $80,000 per year.
Long-term care insurance
You can purchase private long-term care insurance that covers various long term care expenses (e.g., assisted living, non-medical senior care, adult day services, home health care and/or nursing home care). The average policy with no inflation protection for a 60 year old is $2,250 per year (2008); adding inflation protection will increase the policy cost by 40 percent or more. To find companies licensed to sell policies and to compare their prices, locate your state’s insurance department, click here.
Retiree plans, employee health plans or a Medigap policy (private insurance that covers the gap between what Medicare covers and what the provider charges) may also cover health expenses related to elder care.
The bulk of healthcare coverage for older people is covered by this federal government program for individuals 65 years of age and older and, in certain cases, for younger people with disabilities. Medicare produces an annual handbook that identifies all the benefits available, along with the most current premium, deductible and co-pay costs. Medicare covers inpatient care in hospitals and other facilities; hospice, in home elder care and some skilled nursing care (Part A); doctors’ services, outpatient care and some preventive services (Part B); and some prescription costs (Part D). For Medicare’s annual handbook and other resources, go to medicare.gov, or call 1.800.MEDICARE.
States throughout the country receive matched funds from the federal government for their Medicaid (welfare) programs that benefit lower-income individuals. Some states have received waivers from the U.S. Department of Health & Human Services to allow them to use some of their long-term care Medicaid dollars to fund programs that enable people who would otherwise need and qualify for nursing home care to stay at home. Services like home care, assistance with daily living tasks, nursing care, care management and supplies may be covered. Use the Eldercare Locator (1.800.677.1116 or eldercare.gov) to find out what programs are offered in your state.
Other government programs
Every state has an Office or Department on Aging that offers a range of elder care services to qualifying individuals. Programs include adult day services, home-delivered meals, home care and the Family Caregiver Support Program for those caring for an older relative at home. Contact your local Area Agency on Aging (go to the Eldercare Locator at eldercare.gov or call 1.800.677.1116) to find out if your family member might qualify for any of these programs. The Veterans Administration may also offer direct services or financial help with elder care programs for veterans. Call their toll-free National Caregiver Support Line at 1.855.260.3274 to find out more.