The costs of care for seniors are staggering. If you or a loved one experiences an illness or medical condition that requires long-term care—whether medical, personal, or financial—the costs can add up quickly. As with most things, it is far better to be prepared for these potential expenses than to be caught by surprise.  

Not only is the cost of care for seniors substantial, but it will impact a significant number of people. The Washington Post reports that, by 2030, 72.8 million U.S. residents will be 65 or older, with rapid growth in the number of people over the age of 80. US News and World Report recently shared that, according to LongTermCare.gov, someone turning age 65 today has almost a 70% chance of needing some kind of long-term care, and 20% of people will need care for more than five years. 

What's more, according to Forbes, the cost of caring for an aging parent can be more expensive than caring for children. The average out-of-pocket cost of raising a child from birth to age 17 is about $234,000, but the cost of providing long-term care for an aging loved one can be more than $100,000 for just one year. In this article, we share some of the significant—and sometimes unexpected—costs of caring for an aging parent or loved one.  

Medicare and Supplemental Health Care Insurance Are Expensive and May Not Cover Long-Term Care. 

Because there are limits on Medicare coverage, some seniors choose to purchase supplemental insurance. These policies are sometimes called Medigap insurance, and the costs can range from $50/month to $300/month, depending on the deductibles and coverage limits. 

Most seniors rely on Medicare for their health insurance coverage, but Medicare does not provide all-inclusive long-term care coverage. Instead, Medicare offers limited coverage for up to 100 days if certain conditions are met. Medicare does not cover assisted living costs, but it might provide outpatient services, such as physical therapy, for seniors who live in assisted living facilities.  

If a person doesn't have sufficient funds to pay for health care, they may qualify for state Medicaid programs. Qualifying for Medicaid can be complex because there are limitations on income and assets and there is a five year look back period that applies to transfers of assets such as adding children to bank accounts or deeds. Before applying for Medicaid and before spending down to the asset limits to qualify for Medicaid, seniors should talk to an experienced elder law attorney at GLFPE. Often times, strategies can be implemented to preserve a senior's savings. 

The Costs of Nursing Homes and Assisted Living Facilities Are Substantial. 

The national annual median cost of nursing home care can cost up to $106,000 for a private room, according to US News & World Report. The average cost of a nursing home in Michigan is over $9,000/month, or $108,000 a year. A semi-private room costs, on average, $93,000, with the average length of stay lasting 485 days. PayingforSeniorCare.com reports the cost of a skilled nursing facility care at $7,441 per month, or nearly $90,000 per year.  

Assisted living facilities often cost less than nursing homes, but they also don't provide access to round-the-clock skilled nursing care that is provided in a nursing home. Assisted living facilities are often best for those seniors who can live independently and don't require daily care, but need some additional assistance from time to time. 

In-home Care Can Get Expensive Quickly.  

Home health care can range from a few hours a week to full-time care. Experts report that, in 2019, the national average of home health care was $22/hour, with different locations ranging from $16–$29/hour.  

If a senior doesn't need medical assistance but could help with household upkeep and daily chores, a home health aide might be a good option. Home health aides help with things like cooking, personal hygiene, transportation, and laundry. Typically home health aides provide services for up to 10 hours a week and their fees, on average, are $21/hour. 

Private in-home caregivers, whether a home health aide or a nurse, may charge 20-30% less than the averages above, but it is important to consider things like insurance and payroll taxes that can impact the cost of home health care.   

The Hidden Costs of Unpaid Caregivers Take a Toll on the Entire Family. 

In addition to the direct costs associated with providing care for seniors, there are also staggering hidden costs borne by caregivers. According to the Washington Post, almost half of caregivers who take time off work to care for a loved one report a loss of income due to fewer hours worked, missed promotions, and even a loss of their job. Women make up about 60 percent of caregivers, and on average, a woman over the age of 50 who leaves the workforce to care for a loved one loses more than $324,000 in wages and retirement savings. 

Pew Research Center reports that 12% of adults caring for a child under the age of 18 are also providing unpaid care for an adult, often a parent, as well. These multigenerational caregivers—considered part of the Sandwich Generation—spend 86 fewer minutes on paid work than parents who are not also caring for another adult. Those 86 minutes can translate to lost wages, lower-paying jobs, or loss of advancement opportunities. What's more, Pew Research reports that multigenerational caregivers also spend 21 fewer minutes sleeping each night and 16 minutes more doing housework and errands each day—all of which can impact the finances of the caregiver.  

The Cost of Care for Patients with Alzheimer's and Other Dementia-Related Memory Issues Is Even More Expensive.  

According to PayingforSeniorCare.com, for patients who have Alzheimer's or dementia, a memory care home costs an additional 20–30% per month on average. The Alzheimer's Association reports that care for dementia patients can cost $960/week for a non-medical home care aide, $74/day for adult day services, $51,600/year for assisted living facilities, $105,850 for a private room in a nursing home, and $93,075 for a semi-private room in a nursing home.  

Additionally, as mentioned earlier, there are the “hidden” costs associated with unpaid care provided by loved ones. The US Centers for Disease Control & Prevention (CDC) reports that each year more than 16 million Americans provide more than 17 billion hours of unpaid care for loved ones with Alzheimer's disease and related dementias. 

Geriatric Care Managers Can Help Navigate the Maze of Long-Term Care for Seniors – at a Price. 

Because of the considerable amount of time spent navigating the health care issues related to health care and long-term care for seniors, some families choose to hire a Geriatric Care Manager. These people are professionals who coordinate care for seniors, including physical therapy appointments, billing issues, nursing home stays, assisted living options, and other related needs. Geriatric Care Managers generally charge between $50-200/hour. Because health insurance—whether it's Medicare, Medicaid, or private health insurance—rarely covers these costs, it can be a significant out-of-pocket expense for the family. But depending on the patient's needs and the family's resources, a Geriatric Care Manager may save the family money in the long run because they can avoid unnecessary costs and find the care solutions best suited for the patient's and family's needs. GLFPE can recommend experienced Geriatric Care Managers. 

The Residual Costs of Long-Term Care for Seniors Are Also Substantial.  

It isn't just the financial costs that can be challenging, but also the emotional toll that caring for an elderly parent, spouse, or loved one can have on a person and a family. As reported in the Washington Post, the emotional and physical toll that caregivers experience changes in biological markers of stress, show impaired immune function, and reduced cognitive performance. Studies also showed that spouses caring for partners with dementia had a heightened risk of heart disease. Accordingly, the costs of long-term care also need to take into account the cost of caring for the caregiver as well. If the caregiver gets sick or requires medical attention, the costs of care will increase exponentially.  

How to Plan for the Shocking Costs of Long-Term Care for Seniors  

Start talking early. No one wants to talk about long-term care and finances, but the sooner people start talking to their family and loved ones about these issues, the better it will be for everyone. Meet with an Elder Law attorney to execute a health care power of attorney and a general durable power of attorney, to ease uncertainties if a person cannot make these decisions on their own behalf. The Elder Law attorney can also provide proactive planning to preserve assets and help make the right decisions that apply to the senior's future and care. 

1. Organize important documents. It is helpful to gather important documents, such as bank information, deeds to property, rental documents, insurance policies, powers of attorney, wills, trusts, Social Security information, stock and bond certificates, and other financial information. Keep this information organized and up-to-date so that it is easily accessible by the senior and their caregivers. 
   
   
2. Consider long-term care insurance.  Depending on the policy purchased, most long-term care insurance policies will cover nursing home care, assisted living facilities, adult day-care centers, and in-home care. The key, however, is to purchase long-term care before it is needed. Once a person has a debilitating condition, they won't qualify for the coverage. The cost of long-term care insurance will depend on age, gender, marital status, and amount of coverage. There may be some tax advantages to purchasing long-term care insurance as well, since premiums are deductible if they meet a certain threshold. 
   
   
3. Consider setting up a trust. In some situations, an irrevocable trust may be a good planning option to cover the potential costs of long-term care. For instance, a charitable remainder trust is a tax-exempt irrevocable trust in which a person transfers their assets to the trust in exchange for an income stream during their lifetime or for a specific number of years. The income can be used to pay for long-term care expenses and at death, the remaining assets in the trust would be distributed to the designated charity. Other asset-protection trusts may be a good option as well. 

The costs—both financial and otherwise—of long-term care for seniors are staggering and often unexpected. With the right preparation, however, you can put yourself and your loved ones in as good a position as possible to manage the costs of care. A skilled and caring Elder Law attorney can help guide you through your options. 

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