Home Care Assistance Payment Options
Joseph S. Basile Home Care is here to serve the community with the process of “ageing in place”. It is important to understand and have the discussion of home care payment options. We understand that it may be very challenging for seniors to pay for home care and remain within their community. We offer services that may be free of cost depending on qualifications. NO one should have the options between staying at home and being placed in a nursing home. Unnecessary placement of individuals in nursing homes are 100% preventable.
Let’s start by setting apart home care and home health care. Home Care provide custodial care; they help persons with their activities of daily living such as bathing, dressing, housekeeping and transportation. This is also referred to as personal care, attendant care, non-medical care and companion care.
Home Health Care offer skilled care such as intermittent skilled nursing care, physical therapy, speech therapy and occupational therapy. A doctor must see you face to face to certify that home health services are needed. Medical equipment and certain medical supplies maybe provided with a doctors order.
Nursing homes can be very expensive form of caring for the elderly, not to mention poor quality of life and insufficient care. Many states and organizations (like ours) provide services to individuals who require nursing home level care but choose to remain living in the community. We have the organizational and navigational resources to help individuals remain in their community and while getting the help that is much n need.
Developing a Financial Plan for Home Care
Since many families pay for home care from their savings, they are in a state of continuously diminishing resources. Many assistance programs determine eligibility based on an individual’s resources. Therefore, the assistance available to an individual is constantly changing. In other words, the longer a person requires (or is projected to require) home care, the more assistance that becomes available to them.
For this reason (and others), it is advantageous to develop a long term financial plan when considering home care. Doing so has the dual benefit of ensuring a comfortable and consistent aging process for your loved one while at the same time preserving your family’s assets and resources.
The creation of a financial plan for home care is a complicated process and must accommodate various health scenarios. Fortunately, there are resources available to help families with financial planning for home care. A complete exploration of one’s care planning option is available here and summary follows below. Each option has its pros and cons, we also provide free financial planning.
Public Benefits Counselors: Local area agencies on Aging (AAA) and Aging and Disability Resource Centers (ADRC) have benefits counselors on staff that can help with financial planning. While they typically do not charge for their assistance, they may be under-staffed and unable to provide adequate long term planning. They also tend to be highly knowledgeable about local programs but have less larger financial planning experience.
Geriatric Care Managers: GCMs help families create and implement long term care plans and, as a part of that, some will help with financial planning. Since GCMs are typically paid for out-of-pocket, one can expect a higher level of attention. Families tend to contact GCMs only after the need for care has become apparent and therefore GCMs are not in the best position to do long term planning. Often GCMs come from nursing or public health backgrounds and do not have extension financial experience.
Eldercare Resource Planners: ERPs are specialists in developing financial plans for home care. They differ from Care Managers in that they typically come from a financial background instead of healthcare background. They are paid out-of-pocket but can often pay for themselves in the financial assistance resources they discover for their clients. They are significantly less expensive than Elderlaw attorneys, but cannot perform some of the legal procedures which only attorneys can.
Elder Law Attorneys: The most expensive and most thorough option. An elder law attorney and their staff can provide a one-stop shop for home care financial planning but their hourly rate may prove cost-prohibitive for some families. One can search the National Academy of Elder Law Attorney database.
Reverse Mortgages/HELOCs/Equity Key: There are several ways families can self-pay for care by using their home as a financial resource, these include reverse mortgages, home equity lines of credit and Rex Agreements. However, depending on marital status, severity of need and the projected length of need not each of these options necessarily makes economic sense. For example, if the person in need of care is single and may need to move into residential care within a two year period, then a reverse mortgage is probably not the best option. Downsizing comes with its benefits as well, no property taxes, homeowners insurance, utilities and property maintenance. Converting financial gains from the sale of a home to an annuity allows for a fixed income, without the loosing equity as with a reverse mortgage.
Insurance Policy Conversions: Life insurances holders have a variety of ways of converting their policy into cash or home care services prior to the policyholder’s passing. There are three options that allow individuals to stop making premium payments and receive immediate payouts on their policies without passing. Viatical settlements are designed for individuals with less than 2-year life expectancy. Life settlements are intended for persons with longer life expectancies. Life insurance conversions give consumer the greatest value for their life insurance policy however the benefit comes in the form of care services instead of cash. Accelerated death benefits and death benefit loans are two other ways individuals can receive cash for the life insurance in advance of their death. However, with these two options, the policyholder must continue to make their monthly premium payments.
Home Care Loans: Loans specifically designed for elder care are a new and interesting financial product. These loans are intended for short term needs while a family is waiting for other financing. For example, a veteran’s pension claim approval can take 6-12 month, but once it is approved, it is paid in a retroactive lump sum back to their claim filing date. A loan is made to these individuals with the expectation that it will be re-paid for the lump sum. A similar situation exists for families selling a home and having the elderly relative move in with the adult children. Finances will become available it is just a matter of when the home will sell.
Long Term Care Insurance: Individuals with long term care insurance can use the benefits to pay for home care. For persons without LTC insurance who have a need for care, they typically are not eligible to purchase insurance. For this reason, our discussion of LTC insurance is relevant only to persons doing very long term planning.