Understanding Types of Care
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Types of Care and Funding Solutions
Today, many older adults have more care options than ever before. Not long ago, families’ only option was to move their loved one into a nursing home. Now there are so many different care scenarios for older adults that families can feel overwhelmed and confused by them all. Here, we break down the available options and take a look at what they cost, based on data from Genworth’s 2021 Cost of Care Survey.
Types of Care
Professional caregivers can be hired to come to your home to help with day-to-day activities, such as medication reminders, meal preparation, transportation, light housekeeping, dementia care, and Activities of Daily Living (bathing, dressing, eating, and toileting). Note that this type of care is different from doctor prescribed Home Health, which is more medical in nature. To read more on the benefits of home care or find a provider, click here.
$4,957 - $5,148 - National median monthly rate
This type of service is a level of care that often requires a prescription from a healthcare provider. Under specific circumstances, it’s covered by Medicare, typically for a short period of time. Home Health services are provided by a licensed professional and could include nursing services, physical therapy, occupational therapy, wound care, and more.
Rates vary by type of home health service - typically covered by insurance
Adult Day Care Services (ADS)
This service provides social support services in a community-based setting, outside of the home. This care occurs during any part of the day, but is not available 24-hours. ADS centers can offer a much needed break to family caregivers. Programs usually offer socialization, supervision, and structured activities designed for individual needs.
$1,690 - National median monthly rate
Assisted Living Facility (ALF)
These facilities provide personal care and health services for people who may need assistance with Activities of Daily Living, similar to home care services. Assisted Living aims to provide a social environment for residents to eat together and participate in activities, such as book clubs, outings to movies and concerts, and exercise and wellness programs. They can range in size from a few bedrooms for a small family feel, to hundreds of rooms for a luxury apartment feel. To read more about assisted living or get help finding the best assisted living for you, click here.
$4,500 - National median monthly rate
Skilled Nursing Facility
A skilled nursing facility provides a higher level of supervision and care than assisted living facilities. They offer residents personal care assistance, room and board, supervision, medication, therapies, rehabilitation, and skilled nursing care 24 hours a day.
$9,034 - National median monthly rate
The goal of palliative care is to increase overall comfort and quality of life by providing relief from the pain and stress of a serious illness, regardless of prognosis. Palliative care is provided by a team of specially trained professionals—including doctors, nurses, social workers, and chaplains. It’s offered in conjunction with treatment for the illness.
Palliative care is typically covered by private insurance plans, and may be covered by Medicare and Medicaid.
The primary goal of hospice care is also to increase comfort and quality of life through physical, emotional, and spiritual support. Individuals qualify for hospice when a physician certifies that their life expectancy is six months or less, based on the typical progression of their illness. The hospice care team will work together with the individual and family to manage symptoms, provide comfort, and enable the highest quality of life possible.
Hospice care is typically covered by Medicare, Medicaid, and private insurance.
Medicare / Medicare Advantage
Traditional Medicare will only cover home health and short-term skilled nursing after a qualifying hospital stay. It doesn’t cover home care, adult day care, or assisted living. However, private Medicare Advantage (MA) plans may have additional coverage for individuals with disabilities and/or medical conditions that require them to need assistance performing personal care and housekeeping services. Centers for Medicare & Medicaid Services (CMS) began allowing MA plans to add this benefit in 2018, but not all plans have added it to their policies. So it’s important to review your personal policy language regarding individual benefits and coverage.
Medicaid coverage varies by state, but generally provides some assistance for home care, adult day care, assisted living and skilled nursing facilities. Eligibility typically is based on two metrics. The first is the need for care, and the second is an income threshold. Click here for a compiled list of state-specific requirements for home care specifically. To find out exactly what services are available in your state, and the eligibility guidelines, contact your local Medicaid office. To find a local Medicaid office, go to the federal government’s benefit’s website Benefits.gov and choose your state. Another great place to go to understand your benefits is the National Council on Aging’s website: benefitscheckup.org. You may want to work with an elder law attorney or geriatric care manager to help you navigate the complexities of Medicaid.
Long-Term Care Insurance (LTCI)
Long-term care insurance policies may help pay for your care and protect your assets by paying for covered expenses up to the amounts set forth in your policy. Depending on your policy and plan of care, this insurance may pay for a wide variety of home, community-based, and facility care services.
It can also offer care options that may not be covered through government programs. Many states participate in the Long-Term Care Insurance Partnership Program. Designed to encourage planning for long-term care, the Partnership Program allows individuals to retain more assets than would otherwise be allowed under state Medicaid eligibility requirements. As a result, policyholders are able to retain assets they would otherwise have to spend down prior to qualifying for Medicaid benefits. Generally, individuals can participate in their state’s Partnership Program by owning a long-term care insurance policy that meets the requirements for the Partnership Program. Policies qualifying under the Partnership Program generally do not cost more than non-qualified policies with similar benefits.
Long-term care policies can be written in a variety of ways to provide a wide range of benefits. Depending on your preference, these policies can be deluxe or frugal, covering all caregiver expenses for an unlimited amount of time or partial expenses for a limited period. Consult a trusted insurance broker prior to investing in a long-term care policy. It’s imperative to understand all aspects of a policy to best ensure it will be beneficial for you. When it comes time for you to utilize the care covered in your LTCI policy, be sure to gain a clear understanding of the coverage and the necessary requirements before making a claim.
Veterans Assistance (VA)
Veterans and surviving spouses may be eligible for a VA benefit called “Aid and Attendance” if you meet at least one of these requirements:
- You need another person to help you perform daily activities, like bathing, feeding, and dressing, or
- You have to stay in bed—or spend a large portion of the day in bed—because of illness, or
- You are a patient in a nursing home due to the loss of mental or physical abilities related to a disability, or
- Your eyesight is limited (even with glasses or contact lenses you have only 5/200 vision or less in both eyes; or concentric contraction of the visual field to 5 degrees or less).
Alternatively, you may be eligible for the VA “Housebound Benefit” if you get a VA pension and you spend most of your time in your home because of a permanent disability (a disability that doesn’t go away). Note that you can’t receive Aid and Attendance benefits and Housebound benefits at the same time. To learn more, visit the VA website.
Home Equity / Reverse Mortgages
Another source of income that adults over 62 increasingly rely on is the reverse mortgage. A reverse mortgage is essentially a loan against your home that you typically do not have to pay back as long as you live in your home. With a reverse mortgage, you can turn the value of your home into cash without having to move or to repay a loan each month. These funds can then be used to pay for home care. It’s important to fully understand the terms of the reverse mortgage before initiating one.
If you have a life insurance policy, there are companies that offer insurance owners the option to sell their policies in exchange for a lump sum payment that’s greater than the cash surrender value. In the event that you’re looking for care and have a life insurance policy, life settlements may be an alternate option to fund your care. The policy is treated as an asset in the same way that a home, mutual fund, or other personal assets are treated. The life insurance policy is sold to an investor while you’re still alive. The selling price is typically considerably more than the cash surrender value of the policy, but far less than the policy’s face value. Depending on age, health, and other factors at the time of sale, you may receive a lump sum payment for the policy at half or less of the face value.
Life settlements provide quick access to assets; however, be mindful that the investors buying the insurance policy stand to profit considerably on the policy’s proceeds. Due to the many complexities of life insurance settlements, consulting with a financial planner is imperative before making any decisions.