The Cost of Home Care and How to Pay for It

understanding-what-insurance-provides-480x450Think about how often we put off car repairs or calling a local Minneapolis plumber to fix a leaky sink for fear of how much it will cost. Or how often caregivers are reluctant to ask for help caring for dad, even though they know it would give them a much-needed rest. The same unknowns, especially around the cost of home care, often affect caregivers’ willingness to consider such services. In fact, a 2010 survey conducted by the Boomer Project on behalf of the Home Instead Senior Care® network found that 49% of family caregivers overestimate the cost of non-medical home care on average by almost $6.00 per hour. It’s also important to know the costs of having a loved one move in with you. We created the Too Close For Comfort?® calculator  to help with this decision. home_care_calculator

The national average hourly rate for homemaker/companions was $19 in 2009, according to the 2009 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs. Other resources list the hourly cost between $15 and $25, depending on where you live. We encourage you to explore and compare home care costs to other types of care using one of these resources:
U.S. Department of Health and Human Services’ National Clearinghouse for Long-Term Care Information
The Federal Long Term Care Insurance Program
2011 Genworth Financial Cost of Care Across America tool
2013 John Hancock Cost of Care Survey Results

As you can see, many of these resources are related to long term care studies and insurances. While more and more long-term care insurance companies are covering this option, home care, especially non-medical care, is still primarily paid for by the family or the seniors themselves. The Boomer Project’s research found that 52% of care recipients were paying for their own home care needs.

How that compares to the cost of home health, assisted living and other forms of care

According to John Hancock’s 2013 Cost of Care Survey, other senior care options are even more expensive that non-medical care:

  • The 2013 average cost of a private nursing home room ($258 a day/ $94,170 annually) has risen an average 3.6 percent per year
  • The 2013 average cost of a semi-private nursing home room ($227 a day/ $82,855 annually) has risen an average 3.6 percent per year
  • The 2013 average cost for a month in an assisted living facility ($3,427 a month/ $41,124 annually) has risen an average 2.0 percent per year
  • The 2013 average cost of adult day care ($71 a day/$18,460 annually) has risen an average of 1.6 percent per year
  • The 2013 average cost for a home health aide ($19 hourly/$29,640 annually) has risen an average 1.3 percent per year

Unlike for home care services, Medicare will pay for some of these types of services; however, as most caregivers know, the senior is still responsible for a heavy portion of these expenses. More importantly, these services, with the exception of home health aides, are full-time expenses that require a senior to move out of the comfortable surroundings of their own home.

Home care services, both home health and non-medical, are often only required for a few hours a week in order to make a significant impact on the seniors’ lives and allow them to continue to remain in their own Minnesota homes. In fact, a Home Instead Senior Care study indicates that 22 percent of the network’s clients employ caregiver services four hours or less per week and 20 percent of clients employ them between four and eight hours per week. That could represent a savings of thousands of dollars a month, when compared to nursing homes and assisted living facilities.

Finding out more information

Only you and your family can decide if non-medical home care is right for you and your senior loved one. To help you, we suggest exploring these additional resources:

Financing Options for Care Video

Get more information about our Home Instead Senior Care Minneapolis hours and rates

too_close_for_comfort_bookletSome families are choosing to live together with their senior loved one which can come with plenty of challenges, such as emotional stress, caregiving dilemmas, space and privacy issues and financial worries. But there are also rewards, including the closeness that can develop from having a loved one nearby. Whether you’ve already decided to merge households or if you’re just thinking about it, Home Instead Senior Care Minneapolis is here to help with the launch of our Too Close for Comfort?® public education campaign to guide families to the right choices for them.

Whether your senior loved one should live with you or stay in his or her own home is an emotionally charged decision. But it’s important to understand both the financial and emotional impact, as well as some of the options available to you.

Home Instead Senior Care and Adriane Berg, author of more than 13 books on personal finance and a founder of the National Academy of Elder Law Attorneys, have combined their experience to create the Too Close For Comfort?® calculator. home_care_calculatorThis tool uses 15 questions to walk you through basic budget items, major issues, and some often-overlooked matters that could affect your decision.

Before using this tool, it will be helpful to have the following documents in hand, for both yourself and your senior loved one: bank statements (for payroll deductions and other regular payments); mortgage or renter’s monthly statements; insurance premium policy statements; utility bills; tax records; average credit card or other unsecured debt payments; recurring gifts; Social Security or Canadian Pension Plan (CPP), pension and investment income; estimated out-of-pocket cash expenditures; and any other financial documents that reflect living expenses for your household and that of your senior loved one.

Balancing the financial affairs of a multigenerational household should be approached in much the same way as a college roommate arrangement. That’s the advice of Adriane Berg, author, CEO of the boomer consulting company Generation Bold, and a founder of the National Academy of Elder Law Attorneys. She advises writing two checks to the mortgage company or taking turns paying the mortgage each month. The same is true of paying for living expenses; consider creating a common fund.

Every family needs to decide the care options that work best for them. It’s never to early to start the conversation about long-term care and acknowledging that an aging loved one needs additional support, either physically or with simple tasks of daily living, is a significant step for a family.

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