When I was a teenager, my grandmother’s health began to fail and she lost some of her good humor. She had to be helped with simple tasks but didn’t want to be in a care facility, so for at least a year, my cousin lived with her and was subject to her pokes and barbs. When I was 15, we started having a family conversation about which of my siblings would help our mother with daily tasks like bathing and dressing grandmother.
It’s not easy to predict what type of care your parents will need, and it becomes even more difficult to decide when that moment arrives. But if your parents are approaching their golden years, planning for their future care is a conversation worth having. Here are a few things to keep in mind when starting the discussion.
What are the options?
As your parents age and their health issues increase, they may need part-time or full-time care in order to manage routine tasks. The type of care you choose together will depend on how involved you or other siblings are, how much your parents can do on their own, and what they are able to afford.
The 3 main options for care are, in-home care, assisted living, or a nursing home. Although budget is an important consideration, financial assistance is often available, so if your preferred option seems too expensive, don’t rule it out before finding out if the cost can be subsidized or covered.
In-home care is a very customizable option that can be structured to meet specific needs. Many people prefer to stay in their homes, and your parents can continue to do so for a long time with the right home modifications and assistance.
Options include hiring a home health nurse or helper, having a live-in family member, and paying for certain tasks such as housekeeping or a meal delivery service.
If you are unsure about the specific needs of your parents, consider hiring a geriatric care specialist to evaluate their living environment. The specialist can make recommendations about home modifications that would improve the safety and usability for your parent.
An assisted living facility may be a good choice if your parents don't need full-time nurse care, but cannot safely live at home on their own. Assisted living facilities have staff members available 24 hours a day and help residents manage daily tasks such as dressing, bathing, and taking medications.
The type of care available depends on the regulations of each state and the type of license of each facility. It would be a good idea to visit several locations to see exactly how they operate and what level of care they provide.
A nursing home, or skilled nursing facility, is ideal for those with health conditions that require medical treatment or continuous monitoring. It is usually the last option for care because it is the most restrictive and reduces the independent lifestyle of residents.
Nursing homes can be expensive, especially if you are paying out of pocket for a private room. If a nursing home is a necessity and budget is a concern, find out what financial assistance options are available.
Paying for senior care
Even if your parents have money saved for retirement, paying for care over an extended period of time can be a financial drain. Exploring different options becomes easier if your parents’ income and assets can comfortably pay for their care.
If their income and assets are limited, they may qualify for Medicaid or other programs that can subsidize or pay for the cost of your parent’s care.
Many seniors do not qualify for Medicaid because of their retirement funds, but there are alternatives for paying for care if they need financial assistance. Some options for financing can include:
- Long-term care insurance
- Reverse mortgage
- Veterans benefits
- Life insurance
- Dividing expenses & care between siblings
Long-term care insurance
Having a long-term care insurance policy is a great way to pay for expenses, but it takes some planning ahead. If your parents wait until they have significant health problems, getting the policy will be more difficult and more expensive.
Long-term care policies are generally flexible and can be used to pay for nurses, adult day care, a family caregiver, etc. Some policies may provide a daily or monthly stipend to pay for any care expenses.
These types of policies are structured in many different ways, so it is important to define your priorities and make sure the policy you choose reflects those needs.
As a bonus, premiums may be tax-deductible and benefits may be non-taxable (on tax-qualified plans).
Another option is a hybrid long-term care/life insurance policy, where benefits can be paid either for care or as a death benefit if long-term care is not required. The hybrid policies may be less flexible than a standard long-term care insurance policy in terms of how the benefit may be used.
Reverse mortgages allow you to use the equity value in your home to get cash, either in a lump sum or in monthly payments. The funds can be used to pay for your parent’s care expenses. But there are a few limitations—the homeowner must be 62 or older, and must own the home outright or be close to paying it off. Your parent can stay in their home until they die, even if the amount of the loan is more than the worth of the home at that point. After they pass away, the home will be sold to pay the loan.
If either of your parents is an active-duty veteran, they are eligible for monthly benefits. Any veteran or their spouse who served during a foreign war can apply for the Aid & Attendance Special Pension.
A married veteran can receive more than $2,000 per month to pay for senior care, and a veteran’s surviving spouse can receive around $1,000 a month.
This benefit can be used to pay for any kind of care, in-home, assisted living, or nursing home care. It can also be used to pay friends or family members to provide assistance, even if they are not medical professionals.
If your parents have funds invested in a life insurance policy, there may be options for accessing that money to help pay for their care. For example, they may have the option of doing a death benefit loan, cash surrender, accelerated death benefits, or vatical settlement.
Have your parents talk to their life insurance company to see what options they may have for using some of the cash invested in their policy. Some of these options, like the cash surrender option, come with fees and taxes, so make sure you know exactly what you are giving up and what you are gaining if you decide to go this route.
Split between siblings
There are a couple of ways to divide the expenses among siblings. One way is for those who have the available funds pay for your parents’ care as a kind of loan. In the future, they would be paid back from the collective inheritance or out of the proceeds from the sale of the family property after your parents pass away.
Another method is for siblings who live far away or cannot directly assist an aging parent to pay another sibling to provide regular care.
Depending on the state your parents live in and their level of income and assets, they may qualify for in-home care covered by Medicaid. Short-term in-home care is covered by Medicaid in all states, and long-term in-home care may be covered for those who have medical conditions that would require nursing home care. You can contact your local government office on aging to see if your parent qualifies.
There are so many sources of aid available, that it is worth approaching the search like a student looking for college scholarships. You can start by going to the National Council on Aging’s website, which has identified over $10 billion in benefits for seniors since 2001. There are more than 2,000 programs that offer some type of assistance, from subsidies for food, medication, and housing, to counseling about care options and grants for respite care.
Start the conversation
Planning ahead is the best way to ensure that your parents are in an economical and comfortable option when some kind of senior care becomes necessary. The best choices are affordable options that do not unnecessarily restrict your parents’ freedom and do not place a heavy burden on you and other family members.
Deciding in advance on how to pay for care will make the process much easier. Making decisions about care for your parents can be very stressful, so simplify it. Start a discussion before the situation becomes inevitable—before care is necessary. If your parents are of retirement age, talk to them now about their plans and wishes, so there are fewer surprises in the future.