According to Carolyn Rosenblatt writing for Forbes.com, families seldom calculate the actual cost of help until a crisis hits. Like a fall and broken hip. After the hospital and then the rehab facility the next step is typically back home. Then the elder needing care or their adult children are shocked to discover that Medicare does not cover a home care worker to be there to help mom with her bath and meal preparation. Medicare covers only those services they consider “skilled care” such as nursing visits, physical therapy, occupational and speech therapy.
Medicare does not cover anything else that is categorized as help with “activities of daily living” also known as “custodial care.” This is the type of care most elders need for the longest period of time either at home or in a facility. According to the annual Genworth “Cost of Care” survey in many parts of the country long-term care services not covered by Medicare or some other form of insurance can run as high as $100,000 per year. The concern is whether the adult children are going to have to pay for that help out of their own pockets.
Many aging parents do not have the income to cover this help. The Forbes.com article cited a report from the Congressional Budget Office cue about how many hours of daily assistance an aging person is likely to need. The CBO report says that those with functional limitations who receive assistance from others primarily rely on custodial care to obtain the assistance they need. Generally, this means family caregivers. The number of hours of paid care is highest for people who have difficulty with three or more activities of daily living and who are 85 or older. Many are widowed and thus without a spouse to care for them. People under age 85 with limitations in three or more ADLs who live at home rather in a care facility receive an average of 9 hours of assistance per day. People age 85 or older with that degree of impairment typically receive about 11 hours of assistance per day, mostly informal. The cost of a home care worker who provides basic care paid out of pocket, according to the 2012 Met Life study of costs of long term care is $20 per hour.
If you pay a worker to come to your 85 year old parents’ home to care for them with three functional limitations and dementia, the cost will be an average of $102,200 per year for daily, 14 hour a day help. Since most elders cannot afford this, the writing is on the wall. Family members provide much of the needed help themselves. Will this be you? Long term care insurance is the only private benefit that covers home help with activities of daily living, the kind of help most elders need. But most people in the U.S. don’t have it. The CBO report cites statistics from report prepared by LifePlans, Inc. among the adult U.S. population only about 3 percent had LTC insurance in 2011.
by Robert O'Toole, President, Informed Eldercare Decisions