Major Life Challenges Blog Series

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Aging America: Care Giving the Expensive Gift

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The aging America population is expected to double in size within the next twenty-five years, according to a study conducted by  the U.S. Census Bureau: 65+ in the United States: 2005. As America's aging population grows, the demand for elder care increases and unfortunately, supply and demand even applies to eldercare.  

We all want the best for our parents as they head into their "golden years" but with the economy in a slump and the rising costs of elder care, many families are struggling with tough decisions.

Many elderly have not been able to save enough for retirement and are already living on a fixed income, leaving little left in their budget for the expensive care they often need.  Many times their children take on the burden of these expenses and are faced with tough decisions such as quitting their job to care for mom and dad or helping to pay for their care not covered under insurance.

Aging America: Care Giving the Expensive GiftWhere Will They Go?

When it comes to elder care there are three options to consider:

  • in-home care agencies
  • nursing homes
  • assisted living

Each carries its own upsides and downsides as well as expenses. Let's take a look...

In Home Care

Many times elderly will want to stay in their homes and don't want to burden their relatives to constantly check on them, but realize they need help with some of their day-to-day activities, in home care to the rescue.

There are two types of in home care: personal care and health and medical care.

  • Personal care is typically provided by a certified nurse's assistant (CNA), who can assist with everyday basic tasks, such as cleaning, cooking, and helping to dress, bathe, and use the bathroom. They can also remind the patient to take their medications.
  • Home health and medical care might be necessary if the patient requires someone who can administer medications, take their blood pressure, or provide in-home physical therapy, and other medical needs.

The cost for in home care can get expensive, as it is typically paid by the hour of care provided. In order for the in-home care to qualify for Medicare or Medicaid the provider must meet certain federal standards. Sometimes there are also government programs available. Anything not covered through Medicare, Medicaid or government programs would be an out of pocket expense.

Nursing Homes 

Nursing homes are for elderly who require constant medical attention and need significant assistance with daily living.

The average cost of care for nursing home care ranges between $4000 and $8000 per month. Cost is determined by the level of care needed, the setting where the care is provided, and the geographic location. As you can imagine this bill would be a difficult one to swallow on a fixed income.  As with in home care it is important to exhaust Medicare and Medicaid options as well as government programs first.

Assisted Living 

If you feel mom and dad need the help, but seek their independence assisted living may be the way to go.  Assisted living was developed to provide housing, health care and personal care services to elderly in need of assistance with daily living activities without forcing them to give up their independence.  

The costs associated with assisted living are similar to mom and dad staying in their current home. Assisted living includes all the basic living expenses such as rent, utilities, and food, but also includes 24-hour security services, housekeeping, health monitoring services, lawn care, property taxes and insurance, trash removal, repairs and maintenance, as well as social activities and entertainment.

This type of care is generally not covered under Medicare / Medicaid or government funded programs.

Helping without breaking the bank

The future may not be as grim as you think, financially speaking. There are steps you can take to cut costs if you are considering helping your parents pay for their care.

  • Tax time tips. Claim your parents as dependents. Depending on the amount of support you provide, you may be eligible for tax breaks. To do this, your parent's income, excluding Social Security, must be less than the amount of the personal exemption. For 2010, the personal exemption was $3,650; for 2011, it's $3,700. Additionally, you must provide more than 50% of your parent's financial support.
  • Medical expenses may be deductible. If you contribute to your parent's health care expenses, you may be able to deduct those costs, even if you can't claim them as a dependent. To claim this deduction, you must provide at least 50% of your parent's financial support. Additionally medical expenses must exceed 7.5% of your adjusted gross income. Qualified expenses include the cost of a nursing home, in-home health care, dental care and prescription drugs. You can include your own un-reimbursed medical expenses when calculating total costs.
  • Government help may help. Your local Area Agency on Aging office can provide information about programs in your state.
  • Consider other family members as care providers. Don't want to quit your day job to care for mom or dad? Consider hiring a close friend or relative; mom or dad will be more comfortable with them and as an added bonus it may cost you less. Make sure to draw up a contract outlining the terms of the agreement and share it with everyone.

No matter what you decide the decision will be difficult and most likely expensive for your parents. Be sure to do your homework and be diligent in filling out all of the necessary forms to help your parents qualify for anything that may help. Don't forget to include the assistance you might provide on your taxes.

Mom and Dad deserve the best that you can give and sometimes these decisions are the most difficult ones you will ever have to make.

Have you been tasked in helping your parents with elder care? Have you taken on the responsibility of caring for mom and dad yourself? How have these decisions affected your family emotionally and financially?

To Read More Posts From our Blog Series; Medical Debt, Expect the Unexpected, click here

Suzanne Cramer

Suzanne is a certified credit counselor and a Social Media Specialist for CareOne Debt Relief Services. Suzanne writes for Divorce, Debt and Finances and Major Life Challenges. Follow Suzanne on Twitter @ADivorcedMom where she shares her insights as a single-divorced mom with tips and tricks to keep your finances in check. 

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