There’s no two ways about it: getting older is expensive! Whether you’re planning for your own golden years or helping a loved one that already needs assistance, it’s helpful to know what your choices are, what the cost will be, and how you can pay for it. This series will explore your different options for receiving and financing care. First up is the most popular option nationwide, in-home non-medical care.
In-Home Care
Are you one of the 77% of adults over the age of 50 who want to stay in your current home as you age (AARP, 2021)? Then in-home care, like Pallas Care provides, might be the right solution for you. An in-home or senior care provider will send a caregiver to your home to assist with non-medical needs like meal preparation, grooming, bathing, and companionship. The median number of hours a week most people require is 44, but the range varies widely. Most care agencies have a minimum shift length and minimum weekly hours requirement; Pallas Care has a minimum shift of 3 hours and weekly of 6, which can be met in 1 or 2 shifts.
According to Genworth’s 2021 Cost of Care Survey, the national median cost for in-home care is $26/hour. In places with greater costs of living and/or a shortage of caregivers, the costs can be higher. In Los Angeles, where Pallas Care is located, the projected median cost of care in 2023 is $34/hour, but can vary widely depending on the amount and type of care needed–up to $70/hour. This does not include holiday and overtime rates, which are often charged at time and a half.
With a rapidly aging population creating more demand, inflation, and a national shortage of paid caregivers, costs have been rising more than 5% annually over the past 5 years. So how can you afford this care?
Insurance and Medicare
Unfortunately, most private insurance and Medicare plans do not cover the cost of in-home non-medical care. Medicare Part A will pay for some home healthcare under certain circumstances, but coverage for this tends to be limited in duration and scope. You should check with your insurance provider to understand exactly what kind of coverage your plan provides. Pallas Care does not accept Medicare or any private insurance plans.
Long Term Care Insurance
However, there is a type of insurance that will pay for in-home non-medical care: long term care insurance (LTCI). If you’re needing care now or in the very near future, you’re probably out of luck. But if you’re planning for the future, you can likely purchase a policy now. You’ll need to undergo a medical exam to make sure that you qualify.
How does LTCI work? It varies depending on your carrier and policy, but if you have a policy in place, you’ll need to experience a “triggering event” that will make you eligible for benefits. This is usually a change in your ability to perform Activities of Daily Living (ADLs) like bathing, feeding, or grooming, or a diagnosis of a cognitive impairment. Then there will be a waiting period, also called an “Elimination Period,” generally between 30-90 days, when you’re expected to pay for care out of pocket before you’re eligible to receive benefits. Once the elimination period ends, your carrier will reimburse you for a certain monetary amount of care or you can sometimes arrange for the LTCI carrier to pay your caregiving agency directly. Pallas Care does accept LTCI and can help you with this process.
Policies often have maximum benefit amounts and/or maximum benefit periods, after which you won’t be covered. Example: your LTCI plan covers $5,000 per month, but your costs are $6,000 monthly; you are responsible for paying the $1,000 difference out of pocket. This means that you should expect to pay for a portion of your care directly; don’t rely on LTCI to cover all your costs alone.
Government Assistance Programs
Many states and local governments offer a program called In-Home Supportive Services (IHSS) which provides support to the elderly and people with disabilities. In order to qualify for this, you need to meet certain criteria related to age, income level, and disability. Once it’s determined that you qualify, the process works much like a private home care agency: a social worker will visit you for an assessment, determine the kind, level, and amount of services you need, and assign a caregiver. However, because of long waiting lists, you should not expect to receive services immediately; it can often take several months, so you may need to pay for private care in the meantime.
You can learn more about IHSS services in Los Angeles here.
Private Pay/Out-of-Pocket
Agencies like Pallas Care were founded to meet the need for people who do not qualify for public assistance and can’t get all the support they need from friends and family members. For this, you’ll have to finance the costs of care directly. You can pay through savings, income, investment or retirement accounts, etc. There are other more creative ways to finance care that you may not be aware of, such as a home equity line of credit or reverse mortgage. Contact your financial advisor to learn more about what options might be available and best for your specific situation.
Are you worried about the cost of care? Many people over- or under-estimate the amount of care they or a loved one will need: our expert team will conduct a free consultation in your home or via Zoom/phone and provide you with a quote. Pallas Care offers discounts that help make care more affordable and with flexible terms and scheduling, it’s easy to adjust your hours up and down as needed.
Call Pallas Care at 213-290-4541 to book your free consultation today or schedule an appointment at this link.
This article is for informational purposes only and is not intended to provide financial or legal advice. Consult with your financial advisor before you make any decisions about your financial situation.
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