How to Manage the Cost of Elderly Care
The costs of elderly care can be quite overwhelming. For seniors who live on fixed social security incomes and have a Medicare advantage plan but no other insurances, deductibles and prescription costs can get steep fast. In-home care, transportation, and many other services can also add up quickly and mean tough decisions about how to spend money for both long and shorter-term care. If you have a loved one struggling to keep up with medical costs, read on for ways to manage the costs of medical and other elderly care.
Assess the situation.
Before you get too deep into the finances, you will first want to look at your relative’s needs. Does he or she need a residential nursing home, an assisted living facility, or in-home care? Would they benefit from someone coming in once a week to clean or help with errands? Taking an honest look at current needs is a great first step in preparing to manage costs going forward. If a parent or loved one needs to see neurologists specializing in dementia, for example, the cost of care will be different than for a senior struggling with normal aging issues like mobility or hearing loss.
Weigh costs against resources.
If you are struggling with the high costs of elder care, one of the first things to do is to understand your loved one’s resources. Whether the senior has gap insurance coverage or not will make a big difference in what’s covered and what isn’t. But even with the best of insurances, there are some costs that can only be covered through private pay. Those are the costs you need to anticipate.
Look at pensions, total income, savings, investments, equity in homes, and family resources when determining a plan for how you plan to pay for eldercare. When you look at these resources, also consider anticipated costs, too. Taking a close look at what money and income you have available and weighing it against the bills that are coming will help you make decisions on how to proceed.
Make a list of all assets and debts and compile your loved one’s full financial picture into one place and then consider calling a financial advisor for suggestions on how to proceed. When you make this call, be sure to ask about the tax implications of liquidating your loved one’s financial portfolio to pay for long term or other elder care. Or, if this is not yet a need, ask about what to do now and come up with a future plan. The more you know ahead of time, the easier decisions will be when the time comes. Moving assets, appointing financial guardians, and gifting, for example, could be ways of legally allowing your relative to keep at least some savings.
Consider alternative options.
If your parent or grandparent is facing a terminal diagnosis and resources are low, you might do well to consider cashing out on their life insurance policy. If you’ve ever asked “what is viatical?” or “what is a viatical settlement?” then you’re already on the right track. This is a lump sum payout against a life insurance policy that could help with expenses now. While your loved one might not be ready for this step, it’s good to contact a viatical settlement broker to find out all options now.
Take it slow and ask around.
Managing the high costs of elder care can be challenging at best. But doing your homework, research, and looking at all available options will be your best bet in the difference between mediocre to care you and your relative are happy with. For those who are still unsure where to start first, another way to tackle this is to talk to friends and family who have been here before. Doctors, social workers, nurses, and even people your loved one knows from the senior center might have ideas for you too. You certainly aren’t alone and their stories may contain hints on how you can best help the relative you care about.