Cost of Care
Now that you have determined that your loved one can no longer live safely, happily, and independently at their current living situation without more care, how will you pay for your loved one to stay at a residential personal-care home? Below is general information which will help guide you through possible options so that your loved one can start enjoying life and you can have peace of mind.
As stated earlier, keep in mind that in the Austin/Round Rock areas, the average cost is approximately $4,000.00 per month ($40,000.00 to $55,000.00 each year) depending on type of room (private or semi-private room) selected for your loved one to live in a residential personal-care home. In comparison, the cost of a nursing home placement is about 30% more (depending on the medical diagnosis and type of room) and for large assisted living care facilities it can cost 20% more (depending on type of room and "level of care") when compared to residential personal-care homes.
1) Private personal funds - funds that seniors have through monthly pension, retirement saving or investments.
2) Combined private/personal funding - combined funds from all family members.
3) Veteran’s Benefits - seniors or spouse’s of seniors who were veterans may qualify for financial assistance. Go to the Veteran’s Administration website www.VA.gov and type in the words “Aid and Assistance”
4) Life Insurance Policy - speak to the senior’s financial representative and ask about cashing out the policy using “accelerated” or “living benefits.” If the insurance company is unable to cash it out, an attempt to sell the policy to a third party in return for a “life settlement” or “senior settlement” may be able to be made.
5) Long-term-care insurance - in almost all cases, this type of insurance will cover nearly 100% of the cost of living in a residential personal care home.
6) Medicaid - contact the Area Agency on Aging in the community and inquire whether or not the senior qualifies for Medicaid based on financial status and personal assets. If the senior qualifies for Medicaid, then go and visit places which will take Medicaid paying residents.
7) Annuity - contact the senior’s financial representative about cashing out this type of personal asset fund.
8) Sell property - sell the senior’s community dwelling (house, condo), land or business.
9) Rent property - lease the senior’s community dwelling (house, condo).
10) Reverse Mortgage - this option allows seniors to cash out the value of their home’s equity. Contact companies who specialize in reverse mortgage services.
11) Bridge Loan - speak to your financial institution to get a short-term loan of $50,000 until other viable funds become available.
12) Housing and Veterans Subsidies - seniors with annual incomes under $12,000 may qualify for U.S. Department of Housing and Urban Development (HUD) 202 and Section 8 Senior Housing. Go to www.HUD.gov for more information. As stated above, the Department of Veterans Affairs also provides some financial assistance to veterans or spouses of veterans.
13) Life Care Funding Group (LCFG) - assists people in need of funds to cover the costs of senior housing and long term care. LCFG specializes in converting the death benefit of an in-force life insurance policy into a long term care benefit to cover the costs of skilled nursing home care, assisted living, home health care, and hospice.
14) Equity Key Agreement - The homeowner shares the long-term appreciation of their home with a real estate investment company. The investment company pays the homeowner cash in exchange for the entitlement to participate in the home's future appreciation.
15) Equity Lines of Credit - This is a form of revolving credit using your home as collateral. An equity line of credit pays for major items like assisted living expenses, education, home improvements, or medical bills. It offers lower associated costs and is a good option for couples of mixed ages who are not be eligible for a reverse mortgage. The homeowner uses a loan against the home to help pay for assisted living.
Tips on saving money to pay for living at a residential personal-care home
1) Health care review - If warranted and reasonable, review the senior’s prescriptions with their primary medical care provider to see if any prescription medications, supplements, or over-the-counter medications can be decreased. If possible, use mail order medications with a 90 day supply or shop around at discounted pharmacies who charge only $5.00 per qualifying prescription.
2) Medicare review - Go to www.medicare.gov and review current medical health insurance and eliminate extra services.
3) Discontinue - Cell phones and cable services since the residential personal-care home will have free land lines, cable and internet connections.
4) Hold a sale - Have a garage sale or an estate sale!
5) Close accounts – Close all unnecessary credit card accounts, magazines subscriptions, newspaper subscriptions, etc.
6) Become acquainted with Hospice services - If your loved one is on hospice services, hospice will pay for nutritional supplements, medications, and incontinence supplies.
7) Share a room - Share a room (semi-private) instead of a private room. Most seniors, especially those even with dementia, long for companionship and having a roommate can keep them calm. Sometimes, what we may think is best is not always what is best for our loved one and living in the environment and receiving quality care is more important than having a private room!