BUFFALO, N.Y. (WIVB) – Nothing can wipe out a retirement like a health problem. That’s the message from financial advisers when it comes to planning for long-term care. Unfortunately, that planning is something most Americans don’t do, for themselves, or for their loved ones. It can put grown children in a position of feeling helpless and lost when the time comes to make arrangements for their parents.
Saving for retirement doesn’t even seem to be a priority for Americans, let alone saving for long-term care. Statistics show nearly half of all Americans have nothing in a retirement savings account. Of those who do have retirement savings, the average amount in the account of a person between 50-55 years old is only $124,831. When you consider the average annual cost of a nursing home in Buffalo is $113,304, it’s easy to understand why long-term care costs can be so devastating.
Anyone who’s taken on the role of caregiver knows the toll is both emotional, and financial. Planning for the financial aspect can help alleviate at least some of the emotional challenges, says financial advisor Robert Powalski, with Alliance Advisory in Buffalo, N.Y.. “70% of people over 65 will need some type of long-term care. The problem is, it’s a very tough topic to address because most people don’t want to think about their health deteriorating”, explained Powalski.
Options for elderly people who need constant medical care include nursing homes, assisted living facilities (there are different levels of these facilities) which cost an average of $3,750/month in Buffalo, and at-home care using a home health aide. A home health aide typically charges $21/hour, which can add up quickly if your loved one needs 8-12 hours of care every day, and if there is no insurance to cover it.
How to fund the care
Medicare doesn’t cover long-term health care costs, in most cases. It may cover up to five or six weeks of home healthcare following a surgery or hospitalization, but then the costs would have to go under Medicaid, which has a very low income/asset threshold in terms of qualifying for it. That leaves the option of purchasing long-term care insurance. Since this is a type of care 70% of people will use, the premiums are high. Powalski says life insurance is another way you can help cover the cost.
“There are any number of companies that have a rider to their insurance contracts. A long-term care rider allows individuals to utilize some of the death benefit to help pay for long-term care expenses…. And at the end of the day there is still a benefit inside the life insurance contract that could be paid out to a beneficiary”, said Powalski.
He and his partners don’t recommend anyone “self-insure,” because the risk is too great and it can end up costing more in the long run.
Speaking with an elder-law attorney is one way to learn about protecting your loved ones assets from the costs associated with long-term care.
Donna Byrd-Swain works full time at Sisters Hospital in Buffalo, and is also caring for her mother, Esther, at their home.
“About five years ago, she was diagnosed with a moderate cognitive impairment”, Donna said of when she decided to move her bedroom into her mother’s upstairs apartment.
Esther also has Parkinson’s disease, and needs her daughter’s assistance with personal care and cooking. For now, Donna is able to keep her mother in their home, but they have already started using home healthcare when she goes to work. She also set her mom up to attend a Medical Adult Day Program at the St. Catherine Laboure Center, next to Sisters Hospital.
“People who are maybe isolated at home that don’t get out very much, this program is great because they can get therapy and they can also have nursing if they need blood sugars done or anything like that. They can also socialize with the group”, explained Patricia Cultrara R.N., the director of the program.
They organize transportation for the patients to arrive in the morning, and lead them through various activities throughout the day, including physical and occupational therapy. Donna says her mom has enjoyed it for the past year, even though she wasn’t interested in the beginning.
“She was like ‘I am not going to that program, it’s just a bunch of old people there’, and I said ‘mom, news flash, you’re there and in another ten years, I’ll be joining you’”, Donna shared the story of explaining the program to her mother.
Even she doesn’t want to think about the next step in her mother’s care, but she knows she will have to deal with it eventually. She says her mom will ask her sometimes, “what’s going to happen to me?” Donna’s response is “Mom, you’re just going to keep on living. Every morning God blesses you to see the day, we’re just going to keep going”.
As you begin to consider options for you or your parents, advisors say to remember that dealing with long-term care will never be simple or easy, but planning for it can take some of the financial burden out of the equation.