Realizing all of the things that Medicare does not cover can be a real eye opener for some folks. Many people assume that Medicare is going to cover all of their medical costs in retirement when the reality is that it may cover only about 50-80% of your care costs (depending on the extent of services that you need)! That leaves a full 20-50% that you need to plan for in other ways.In my last post about Medicare (Taking a Closer Look at Mom’s Medicare)
I discussed how very common things, like eye exams and eyeglasses, are not covered by Medicare. These are the out-of-pocket costs that can begin to chip away at your financial situation and, if not planned for accordingly, leave you without enough to see you through your retirement years.
But the biggest non-covered expense that deserves some awareness is the dollars that may/will be spent on what is termed ‘custodial care’. That is the care that a senior needs to assist them with their activities of daily living: Things like bathing, dressing, toileting and eating (for a more extensive list and a way to assess your loved ones ability click on: Checklist of Activities of Daily Living)
When a senior reaches the time that they require assistance with these activities of daily living, it often falls to the family. And many families are able to provide a great deal of support and care for a time. But it is often the case that, at some point, the senior is going to require more care than the spouse or other family members can provide. That is when families will need to consider the other care options, and none of them are covered by Medicare.
So let’s take a quick look at some of the options and the costs associated with those options.
The first option that many families utilize when an extra set of hands is required is non-skilled Home Care. Home Care agencies can provide assistance with the activities of daily living, but can also provide things like transportation to doctor’s appointments, light housekeeping, and light meal prep. This is a great way to get another set of eyes routinely into a home situation when you cannot be there all the time. It is an out-of-pocket expense that generally runs $20-$25/hour (depending on your area of the country). Many agencies require a minimum number of care hours (often 3 or more during any one visit) but shorter time allotments may be available at a higher rate. This can still be an economical way to ease the burden on a family caregiver for several hours a week or for certain tasks.
When this type of care assistance no longer meets the needs of the senior and the family, the costs really begin to accelerate with the various senior care living options. You need to have an idea about the realities of these costs so that you can plan accordingly. These are also options that are not covered by Medicare and can deplete a senior’s savings rapidly.
Adult Day Services: These programs provide non-residential care and supervision for seniors during the daytime at their facility. Rates averaged $70/day in 2011.
Personal Care Home (often thought of, still, as Assisted Living): This is a residential setting where seniors have assistance with activities of daily living, supervision, meals and medication administration options. Residents will have their own room or apartment or may have a shared space for a bit of savings. Average rates are $3,000-$5,000 (and up) depending on your location.
Long Term Care: This is what people typically think of as the nursing home setting. These residents usually require heavier types of care related to medical conditions, mobility issues and cognitive impairments. These facilities have 24 hour nursing care for their residents. The average DAILY rate for a semi-private room was $214 in 2011 (a private room was $239). Long Term Care can easily run $8-10,000/month (and up). Depending on your community, you may also encounter a difficult time having your loved one admitted directly to one of these facilities, especially if you are unable to pay privately for their room for what may seem like a significant duration of time.
As you can see, these can be enormous expenses! This is why I am such a big fan of Supplemental Insurance Policies and Long Term Care Insurance; both are a must in my book.
So, in helping your parents plan, or in planning for your own future care, please keep these non-covered expenses in mind. Discovering what is not covered when it is too late to plan accordingly can leave you financially destitute.
A healthy financial plan must include a plan for your future care needs!
On the journey with you…….Kathy
Kathy Eynon is an Eldercare Coach and Consultant that works with those struggling to cope with the demands of caring for an aging parent. She can be reached by email at: Kathy@ParentCareAlliance.com.