If you’re looking after an aging parent or loved one, you may cover costs that come with caregiving without thinking about it. It’s easy to pay out-of-pocket expenses, such as groceries, gas and medical equipment that’s not covered by insurance. But as care needs increase, costs often do too. Among those who care for a loved one, 44 percent spend $5,000 or more per year on caregiving costs, according to the 2017 Family Caregiver Journey survey by Caring.com, an online resource for caregivers.
These extra costs frequently create tension even for caregivers with financially sound budgets. It might be hard to set aside money for your own retirement, or you may consider withdrawing money from your retirement accounts to pay for care. To avoid dipping into savings, follow these expert-backed strategies to reduce what you need to spend on caregiving. Read on to learn what can be done to help alleviate costs and preserve your own retirement funds.
[See: 10 Money Tips for Family Caregivers.]
Review your loved one’s finances. Look at savings accounts, retirement funds and any other accounts your loved one has that could be used to cover costs. Review insurance policies to understand what is covered and what is not. Medicare, for instance, covers certain home health services, such as physical therapy and part-time skilled nursing care.
Other policies, such as long-term care or life insurance, may provide coverage for ongoing needs. “Whether it’s traditional long-term care insurance or a hybrid based on life insurance or an annuity, these policies provide benefits that go a long way if the need arises,” says Dennis LaVoy, a financial advisor at Telos Financial in Plymouth, Michigan. Long-term care insurance might cover the costs of home care, adult day care, assisted living and home modifications. And hybrid life insurance policies can include benefits that help cover long-term care expenses as well. A hybrid annuity could allow your loved one to withdraw some of the earnings to pay for long-term care costs, such as nursing home or adult day care.
Know what is needed. If your loved one is still at home, you may be able to do some tasks, such as cooking and cleaning, but not others, like wound care or injections. “Figure out when care is really needed,” says Douglas Wilber, founder and president of Cherished Companions Home Care in Chagrin Falls, Ohio. You might, for instance, be able to cut the grass, but need a home health aide to help monitor an illness or condition. In addition to checking your local directory for a home health agency, you can search online for a home health aide on reputable sites such as Care.com and Medicare.gov.
The median monthly cost for a home health aide was $4,099 in 2017, according to the Genworth 2017 Cost of Care Survey. The exact cost you’ll pay will depend where you live as well as how many hours of help are needed. Medicare only covers part-time or intermittent home health care, which means if you need regular or ongoing help, the cost will typically not be covered.
Share caregiving responsibilities with family members. When evaluating your relative’s specific needs, you may find that many tasks can be provided without the help of a nurse or medical professional. Talk to other relatives to see if they can share the caregiving activities. “Family will be the most cost-effective solution,” LaVoy says. Perhaps a family member is retired, lives near the person who needs care or has job flexibility and can help with routine tasks like laundry and grocery shopping.
[See: 10 Medical Services Medicare Doesn’t Cover.]
When bringing in family caregivers, make sure they understand the responsibility involved. “They need to understand that they are committing to it like it’s a job,” Wilber says. Set up a spreadsheet if you have several people involved to keep track of days, times and tasks.
Check government programs for available assistance. Go to a local senior center or agency on aging to ask what your loved one might qualify for. “Veterans and widows of veterans can often get benefits to pay for care,” Wilber says. The Aid & Attendance program offered through the Veterans Association may cover home care services. To apply for Aid & Attendance benefits, you can visit your local benefit office or write to your state’s Pension Management Center. If you’re not sure where your local benefit office is, you can use the VA facility locator. Grants or local programs can provide additional help, such as respite care or assistance with a specific disorder, such as cancer or multiple sclerosis.
In addition to help at home, you may find community activities available for seniors for free or at a low cost. “Look into day care programs sponsored by a local aging department,” Wilber says. Some cities also provide transportation to and from the home to the day care location. This transportation could be free or available for a reduced price, depending on your city.
Make your loved one’s home more comfortable. If your family member wants to remain at home, you might be able to make modifications to increase safety. This can help prevent falls, which often lead to medical care costs and a recovery period. “First, look at the bathroom and determine the safety of the shower or bathtub,” says Wendy Adlerstein, director of client care services at FirstLight HomeCare in the Boston area. You might install grab bars, a hand-held shower nozzle or tub chair to prevent falls. Around the home, remove any scatter or throw rugs that could be tripped on or get in the way of walkers and canes. And consider making the first floor of the home the main living space to prevent accidents on the stairs.
Technology can also be used to increase security in a home. “Technology can assist with medication management,” Adlerstein says. “There are many devices on the market which can accommodate prefilling the medications and controlling the distribution using alarms and reminders.” Your loved one might also benefit from a personal emergency system, which includes a device that will detect a fall and can be used to contact help in an emergency.
[See: 11 Money Tips for Older Adults.]
Strategically plan for professional help. Even if family members offer support, you may find it’s necessary to bring in additional care for medical assistance. The national median hourly rate for home health aide services was $22 in 2017, according to the 2017 Cost of Care Survey by Genworth. “To strategically minimize costs, it’s important to think about the days of the week that care is most needed, possibly when family members aren’t able to assist, and the times of day when someone needs the most help with different tasks,” Adlerstein says. For instance, your loved one might need help for a few hours in the morning while getting dressed, eating breakfast and taking medications. An hour or two of assistance in the evening for a bedtime routine might be needed as well. Planning for several hours a day will be less costly than professional, around-the-clock care.
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