Welcome to Frugal Fridays. I am your guest diarist, blue jersey mom, sitting in for sarahnity who is on vacation this week. I am going to address a topic that most of us will face sooner or later, the issue of eldercare. The traditional media are filled with images of happy, healthy, wealthy 65-year-olds spending their golden years at the beach or on the golf course. However, one of the fastest growing segments of the US population are the "old" old--those over 85. Many of these super-seniors suffer from chronic illnesses such as osteoporosis; others need help with the basic tasks of daily living such as bathing and dressing; still others suffer from Alzheimer's or other forms of dementia.
If you are caring for a parent, grandparent, or other loved one, you will need to make a lot of financial decisions. Many of the options for caring for an older relative are not cheap. Follow me below the fold as we consider some options for older family members who may not be capable of living on their own any more.
Welcome to Frugal Fridays where we share money saving tips, discuss living frugally and generally talk about personal finance issues.
Let me tell you a bit about my mom, and then I will explore some of the options for and costs of eldercare. Until 2005 my mom lived in a condo in a 55+ "active adult" community. She had worked until she was 75, and she had an active and healthy life until she was in her mid-80s. She started complaining of nausea, but every GI test in the book came up negative, and none of the anti-nausea meds worked. Then she claimed that she was no longer nauseous, but she was experiencing pain in her legs and back (she does have osteoporosis). When pain medication had no effect, a wise doctor ran a quick cognitive screen. He suggested further testing which showed that she was suffering from the early stages of dementia, as well as some memory loss and depression. She did not want to come and live with me, and she was unable to live on her own. I had to do her shopping; she was not eating right; and she was struggling to balance her checkbook. Her doctor advised that I take away her car keys, and that was one of the most difficult things that Son 1 and I have ever done. We ended up moving her into an assisted living community (more below)near me, and she has lived there for the past 2.5 years.
So how can the frugal Kossack deal with the issues of eldercare? First, be aware that eldercare (like higher education) can be an expensive proposition. An AP article published on Tuesday reveals that the costs of both nursing home care and assisted living are rising sharply.
Costs for nursing homes, assisted living facilities and some in-home care services have increased for a fifth consecutive year, and could rise further if a shortage of long-term care workers isn't resolved, a new study indicates.
Given the rising costs, what are your options? Essentially, you have four options for elderly loved ones who are no longer able to live independently. They include in-home care, assisted living, nursing homes, and life-care communities. Your choice of care will depend on the nature of your loved one's disabilities and the cost to your family.
If your loved one has suffered a fall, an accident, or is recovering from surgery, it may be possible to care for that relative in his or her own home. Meals on Wheels can provide a low-cost mid-day meal, and your county department of the aging may provide low-cost temporary help for cleaning, shopping, and light cooking. In my part of New Jersey, this help is available for 3 months only. It is an excellent solution for older people who will recover from accidents or surgery, but it is not a permanent solution.
If your relative is no longer able to care for him/herself because of dementia, memory loss, or limited mobility, you may want to care for him or her in your home. This can be the most frugal option, but a number of caveats apply. First you must have room for your elderly relative. You need a bedroom and bathroom on the ground floor, and the entrance to your home must be accessible as well (no steps). You also need an appropriate shower or tub, such as a step-in tub or a shower with a seat. You may need to do some home remodeling to make your home accessible for a senior with limited mobility.
Second,you also need to address the problem of care for your relative during the day. At the time my mom first needed care, blue jersey dad and I were working full-time; Son 3 was in 8th grade; and Sons 1 and 2 were undergraduates at Very Expensive University. There was no one home for about 8 hours each day. If you do not have a stay-at-home family member who is capable of caring for an elderly relative, you may need to hire help. The AP study reports that homemaking services can average $18 per hour; uncertified home healthcare aides average $19 her hour, and Medicare-certified home health-care aids average a whopping $38 per hour. Another option is
adult day care. The costs can range from $25 to over $100 per day, depending on your relative's needs.
Not everyone can care for a loved one at home. In our case, my mom wanted to preserve her independence, and my house is small and has a single bathroom. I don't think that she wanted to share a house with my kids and the pooties either. If you can't care for your family member at home, a good place to start is the Help Guide which was developed by the Rotary club of Santa Monica. It provides a brief, non-commerical introduction to assisted living, life-care communities, and nursing homes under its seniors/aging section, as well as lots of other good mental health information.
Assisted living facilities are designed for older adults who need some help with basic daily activities such as bathing, dressing, and cooking. Most provide each resident with a small studio apartment with a private bath and a kitchenette. The assisted living facility also provides meals, and there is usually a nurse in staff. The AP study shows that the average costs range from $4921 per month in NJ to $1981 per month in Arkansas. Assisted living is not cheap!! If you are considering assisted living, you need to make a realistic assessment of your loved one's income and assets. I sold my mom's condo to pay for her care, but selling a house is much more difficult in the current climate. You also need to visit several assisted living communities before choosing one. We visited every assisted living facility in my county. Take another relative with you when you visit. Use your eyes, ears, and nose. Find out if the community has special facilities such as an Alzheimer's wing. Look at the other residents. While the typical assisted living resident is a single woman in her 80s, some communities are full of people in the late 70s and early 80s; other have more residents in their late 80s and early 90s.
Continuing Care Retirement Communities (CCRC) or Life-Care Communities provide a variety of options including independent living (in houses or condos/apartments), assisted living, and nursing home care (see below). The advantage of CCRCs is that they will provide a senior with appropriate care throughout his or her lifetime. The biggest disadvantage is the cost, which includes both a substantial initial payment and monthly payments thereafter. The .AARP reports that initial costs can range from $20K to $400K, while monthly payments can range from $200 to $2500 depending on the type of residence and the level of services needed. Since this a major investment, senions and their families should consult a lawyer or financial planner before signing a contract for a CCRC.
Finally, nursing homes are or skilled nursing facilities are staffed by Registered Nurses supervised by doctors and are designed for seniors who can no longer care for themselves. The costs can be substantial. The AP article reports that:
an elderly person typically spends 2- 1/2 years in a nursing home, or more than $190,000 on average at today's costs.
Medicare pays for short-term nursing home care when a person is recovering from an illness or surgery, but it does not pay for long-term care. Medicaid will pay for nursing home care for poor people, but there is a 5-year (previously 3-year) look back. This means that you can't spend granddad's money for junior's college or a fancy Porsche and them apply for Medicaid. You need to spend your loved one's assets on his or her care before s/he can become eligible for Medicaid. There is long-term care insurance available, but I would be very careful. My mom investigated this option after she retired when she was still quite healthy. The insurance was quite expensive and would only cover her through age 80. This is a case of buyer beware.
The bottom line is that many eldercare options are expensive, and home care or aging in place are not viable options for all families. There are, however, ways that you can plan for eldercare so that you are not faced with a medical, financial, and personal crisis. First, your loved one should have a will, and you should know where it is. You should also arrange for a power of attorney, a medical power of attorney, and a banking power of attorney. These documents will allow you to pay bills and make medical decisions if your loved one is incapacitated. There are attorneys who specialize in these issues, and they are well worth the cost.
You also need to have a serious financial discussion with your parent or grandparent. Many members of the "greatest generation" are reluctant to discuss their finances, but you need to know the extent of their assets and income so that you can make an informed decision about eldercare. You may also want to discuss the possibility of a DNR (do not resuscitate) order. My mom had always said that if she were ever hooked up to machines, "just pull the plug," so she asked her doctor for a DNR order.
Finally, find out if your employer has an employee assistance program. My employer had an employee assistance program, and the counselor I worked with was very helpful. For example, she helped me find a list of assisted living communities in central NJ. Caring for an elderly relative is never easy, but planning can make a difficult time less challenging