By TOM LAURICELLA
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When it comes to end-of-life care, many people assume that if a nursing home isn’t in the picture, a family’s financial burdens will likely be minimal.
Such thinking, though, ignores the steep costs associated with caregiving — even if relatives are willing to pitch in.
End-of-life care isn’t a pleasant topic to address. It’s made more daunting by the unexpected turns in our physical and mental health as we age.
“These things often creep up on families,” says Kenneth Covinsky, who specializes in geriatrics at the University of California, San Francisco. “And often it’s a situation where you are simultaneously wondering, ‘How am I going to provide care?’ and having the personal trauma of seeing someone you love having trouble.”
Such challenges make it essential for families to sit down ahead of time to consider the possible burdens that will have to be shouldered. These can include anything from factoring the cost of adult diapers into a budget, to compensating a sibling who quits his or her job to care for a parent full time.
“Whatever you think health-care costs are going to be toward the end of life, you’ve probably underestimated,” says Carol Levine, director of the Families and Health Care Project at the United Hospital Fund. “There is so much that people assume is covered [by government programs] and isn’t.”
Among the biggest expenses: in-home care.
Medicare has a home-health benefit, but it’s only for part-time care. You can find details on what is and isn’t covered at www.medicare.gov/Publications/ Pubs/pdf/10969.pdf.
The United Hospital Fund has several booklets and checklists for thinking about home health care at nextstepincare.org.
“If you’ve got somebody with dementia and who wanders and can’t be left alone…that kind of 24-hour care becomes extraordinarily expensive,” says Dr. Covinsky. “At $10 per hour, for someone doing 40 hours a week, that’s $20,000 a year.”
In many cases, the cost of providing full-time skilled nursing care means a family member (or members) will step into the breach. Invariably, these caregivers will encounter some tough financial issues — immediate and long-term — which the rest of the family should try to anticipate.
One major concern: the loss of a paycheck, if caregiving duties pull that person away from his or her regular job. In situations where there are siblings who continue to work, families may wish to discuss ahead of time ways to compensate the caregiver for that shortfall. There’s also the long-term impact of falling behind on retirement savings, such as lost 401(k) contributions, and — in a tough job market — difficulties in returning to the work force.
In recent years, more studies have tried to quantify the financial impact of being a caregiver. A 2007 survey sponsored by the National Alliance for Caregiving and insurer UnitedHealthcare, found respondents spent an estimated $5,531 out of pocket each year for items such as food, travel, medical care co-payments and medications.
Common expenses that are often overlooked: adult diapers, which can easily end up costing hundreds of dollars each month, and special lotions. Then there’s the cost of adding grab bars and ramps for safety and access to homes. If you rent a hospital bed for the house, you’ll be on the hook for paying for specialized sheets.
A subsequent survey in 2009 highlighted how the ups and downs of the economy should be factored into the financial planning for caregiving. One in five caregivers moved into the same house as the person they were providing care for in order to cut costs; half said they were less comfortable taking time off from work to provide care; and one in three reported having to work more hours or get an additional job.
How to address such issues?
To start, a family member should have power of attorney to help handle an older adult’s finances, among other needs. If a husband and wife maintain separate bank and investment accounts, they should share information about those accounts, as well as any wishes for money beyond what’s spelled out in a will.
Other possible steps:
Consider hiring an elder-law attorney. While not cheap, it’s better to hire a specialist with experience in estate planning — and one who knows your state’s Medicaid program, if that’s in the cards.
Familiarize yourself with reverse mortgages, which allow older homeowners to tap their home equity while they remain in the house.
Discuss possible changes in wills. When it comes to compensating a caregiver, one option is for that person to get a bigger portion of any inheritance that could come from selling the elderly family member’s home in the future.
“If there are any kinds of issues that would potentially ruffle somebody’s feathers, it’s better to talk about them now,” Ms. Levine says. “You don’t want family members to be at each other’s throats and pocketbooks.”
GMM Insurance is a full-service independent insurance agency and a member of the Agape Senior family of businesses. GMM offers insurance options for home, auto, life, health and business. Our senior-focused insurance solutions cover long term care, Medicare supplements, and final expenses. Call us at 803-739-2345
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