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Daughter talks to her senior mother about long term care

Do you understand the levels, costs of long-term health care?

by Amanda Lambert | Contributor
September 25, 2020


Care options for older adults and the costs associated with those options can be confusing and complicated. There are typically one of two ways in which an older adult ends up needing care. The first is a gradual decline from chronic medical conditions and repeated exacerbations of those conditions. The second is a medical crisis. This could be a fall or an acute medical event like a heart attack or stroke. Each of these scenarios can play out in different ways. But in either case, an older adult may transition from one level of care to another, or end up in just one until the end of life.

Aside from medical home health and skilled rehab, the cost of care of any level of care can be offset by a long-term care insurance policy. Many policies will pay a daily rate for in-home care, assisted living or nursing homes. Costs covered in this article assume that no long-term care insurance is in place.

Home care

Home care, also called private duty or personal care, is a vast industry devoted to providing private caregivers (some are CNAs and others are unlicensed) to clients and their families. Each state determines what tasks a private caregiver can perform, and it varies widely. Some states allow caregivers to do a lot and others are very restrictive. For example, Alaska permits CNAs to administer medications and injections, including insulin. Connecticut, by contrast, allows only the administration of a glucometer test. Regardless of state differences, there are still many valuable tasks private caregivers can offer. Those tasks include:

Senior woman receiving meal from in home carer
  • Assistance with bathing, dressing and hygiene
  • Transportation
  • Companionship
  • Light housekeeping
  • Shopping and cooking

Costs of home care vary across the country and depend on how many hours of care are needed. A prominent national study estimates the median hourly cost in 2019 to be $22.50 per hour. Overnight rates may be at a flat rate depending on how much the caregiver needs to get up at night.

Home health care

Home health care is a time-limited medical service covered by insurance. You must have a physician’s order, have a nursing need and be homebound. Home health is an underutilized benefit that includes the following:

  • Nursing on average three times a week.
  • Physical and occupational therapy.
  • Aide service up to three times a week to help with bathing, dressing and grooming Medicare does not allow aides to provide companionship, cooking, cleaning or transportation.

Home health care can be a significant support after an illness or accident, after hospitalization or following a rehab stay.

Assisted living and memory care

Many families choose assisted living because it provides enough services to keep an older adult safe in an environment that is socially active and engaging. Through the years, assisted living communities have accepted more medically compromised individuals, but there are limits to the care they can provide. Most assisted living communities offer the following:

  • Part-time nursing
  • Medication management
  • Housekeeping
  • All meals
  • A wide range of social activities
  • Transportation
  • In-house medical providers at some locations

Assisted living is not able to provide medical services such as IV medications, injections, wound care, catheter care or two-person assist for transfers.

Memory care units are often part of assisted living and might be on a separate floor or section of an assisted living community. Memory care is for people with dementia or other mental health problems. Units are locked to prevent wandering.

The costs of assisted living and memory care will vary across the country. According to the Genworth study, the median yearly price for assisted living in 2019 was $48,612. However, costs can be much higher than this, depending on how much care a person needs. Most assisted living and memory care units have a base rate with additional costs for more care.

Skilled nursing rehab

Skilled nursing rehab is a short-term rehabilitation service paid for by Medicare. To qualify, you must spend at least three nights in the hospital and have nursing and therapy needs. The advantage of skilled nursing over going home with home health is the intensity of the rehab and the level of medical support.

Physical and occupational therapy occur up to five days a week. Other supports include intensive nursing care, aide service, speech, respiratory therapy and special diets. Insurance determines the length of stay in rehab, and Medicare Advantage plans may have a co-pay after a certain number of days.

Nursing homes

Nursing homes are the most expensive level of care available and offer the most intensive medical care outside a hospital. Families choose nursing home care when they can no longer care for someone at home, and assisted living doesn’t provide enough support. Nursing homes offer these services:

  • IV medications and injections
  • Catheter care
  • Wound care
  • Supervised eating for people with swallowing issues
  • 24-hour nursing and aides
  • Physical, occupational, speech and respiratory therapies
  • All meals and activities
  • Physician support on site

The median yearly cost of nursing home care in 2019 for a private room was $102,200. Few families can afford to pay this. That is why many people qualify for Medicaid, which pays for the full cost of nursing home care.

Medicaid is a state and federal program for people with very low income and few assets. Medicaid eligibility is extremely complex. In general, a single person over the age of 65 must have a monthly income of less than $2,349. Assets must be less than $2,000. However, this amount will vary according to where you live and other financial circumstances.

It is highly recommended that you meet with an attorney specializing in estate planning or Medicaid asset protection.

Hospice care

Hospice care is end-of-life care and is paid for by Medicare. A physician must write an order for hospice certifying that the patient has a terminal diagnosis and less than six months to live. Curative treatments are discontinued.

People mistakenly think that hospice care is 24-hour care. It is far from that. Typically, under hospice, a nurse comes in three times a week, and aide service is about an hour a day 5-6 days a week. The family must arrange for any additional care, and this is usually private-pay home care.

Hospice does pay for durable medical equipment such as a hospital bed, oxygen, mobility devices and pressure-reducing mattresses.

So, even though hospice is an insurance-based service, if your loved one has additional care needs, those are added costs unless the family is willing to provide that care.

The cost of care and planning

The best protection against asset depletion is advanced planning. As you can see, the costs of care can get prohibitive. A good rule of thumb is to plan for the worst. That way, you can feel secure about the future, knowing that whatever comes up, you can pay for the care you need.

Alliance America can help

Alliance America is an insurance and financial services company. Our financial professionals can assist you in maximizing your retirement resources and achieving your future goals. We have access to an array of products and services, all focused on helping you enjoy the retirement lifestyle you want and deserve. You can request a no-cost, no-obligation consultation by calling (833) 219-6884 today.

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