Home Care: Resources Seniors Need to Know About
By Benny Lamm, Content Specialist, Senior Planning Services
When the day arrives that they have to pay for it, many seniors are astonished by the cost of in-home care. Fortunately, there are several available resources that can help make it easier. By considering these options prior to the day when they’re necessary, many seniors will find that they’re able to better moderate the cost of in-home care and prepare for the things they’ll need during these days.
Medicaid is, for many seniors, a last resort for paying for the cost of home care. Fortunately, that doesn’t have to be the case. Medicaid does have a number of financial restrictions concerning the assets and income that a senior can possess in order to qualify; however, these restrictions can be handled, as long as they’re prepared for early on. This can be complex at times and the help of a long-term care Medicaid expert is often recommended.
For seniors who have previously served in the military or whose spouses have served in the military, veterans benefits are a great resource for paying for in-home care. Veterans are eligible for a number of services that aren’t available to the rest of the population, such as the Aid & Attendance Housebound benefits and other such benefits. Understanding the ins and outs of those benefits, however, can be difficult. Speaking with an advocate at the VA is often the best way to be sure that a senior is receiving the benefits they deserve.
Life insurance is typically defined as insurance that is paid out after an individual’s death to help their loved ones pay for end-of-life expenses. With advanced planning, however, it’s possible to acquire a plan that will pay out the money when a senior needs it most: when they’re trying to pay for quality care at the end of their lives. This type of policy—called an Accelerated Death Benefits rider—is specifically aimed at paying for in-home care, nursing home care, or assisted living care. Often it must be acquired long before they’re needed. The younger a senior can take out one of these plans, the more likely it is to be effective when they need it.
Long-Term Care Insurance
Long-term care insurance is exactly what it sounds like: insurance taken out specifically to pay for long-term care. It can be used for a variety of purposes, including in-home care, assisted living, and nursing home expenses. These policies, however, are costlier the longer the individual waits to acquire them. The best time to take out a long-term care insurance policy is before it’s needed. It is highly recommended that you be fully versed in what your policy covers, in order not to be caught high and dry when it comes time to pay for care.
For many seniors, especially those who wish to make their own choices about long-term care uninhibited by government restrictions, the best way to pay for long-term care is to pay for it themselves. Private payment ensures that the individual is the one making the choices instead of making them based on what Medicaid or an insurance policy says that it will cover.
Seniors who can’t afford private payment, but whose Medicaid or insurance benefits haven’t kicked in yet, can find themselves in a tight spot when it comes to paying for home care. Thankfully, there are options that can help bridge that gap. A reverse mortgage, for example, takes the equity out of an individual’s home and translates it into ready cash that they can be used for various purposes. There are several types of reverse mortgages, but the one which is relevant to seniors paying for home care or home modifications is known as the HECM Saver (Home Equity Conversion Mortgage). With a reverse mortgage, the house still belongs to the individual, and they can even continue to live there for the duration of their lives.
Bridge Loans and Annuities
A bridge loan is a shorter-term financing option: the senior takes out a loan that’s intended to last only for a short period of time, usually a year or less, and uses it to pay for in-home care until other options are available. Finally, annuities can help by offering payments specifically for long-term care in exchange for a single large payment or longer-term payments into the annuity system.
Paying for long-term care is, unfortunately, something that many seniors don’t consider until it’s too late. While there are plenty of options available, in order to take full advantage of those options, it’s critical that seniors start planning for long-term care early. With proper planning, however, long-term care can be arranged that will make it possible for many seniors to age peacefully in their homes while receiving the quality care they need.