Q. I’ve been a full-time caregiver for my mother for the past few years. Last year, when I noticed that my role was becoming more than I could handle myself, I started looking into in-home care. At the time, I decided against it because it was too expensive. This year has been particularly hard on me, and I could really use the assistance with mom. I decided it was time to spend the money and get my mother the help that she needs to continue to stay in her own home for as long as possible.
I called several home health care agencies in our area for quotes, and couldn’t believe what I was hearing. The cost went up so much since last year! Is this just happening locally, since everything is expensive here, or is it a national trend? I am beginning to get worried. Has assisted living and nursing home care also increased in cost, and most importantly, how can I afford the care that my mother needs now and will likely need in the future?
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A. The increase you noticed in the cost of in-home care is not just local. It is happening across the country! Home-based services are increasingly getting more expensive thanks in part to ongoing labor woes of home health care workers, according to the latest Cost of Care Survey from insurer Genworth Financial.
From 2016 to 2017, the national median cost of home health aide services shot up 6.17% to $21.50 per hour — the most pronounced increase among the various care settings according to the survey.
Why the Cost Increase?
According to the New York Times, by current standards, an “in-home health care worker is likely to be a middle-aged immigrant woman, with maybe a high school education and little if any training, making $20,000 a year.”
Despite their critical importance to the well-being of tens of millions of aging Americans, a quarter of these aides live in poverty. The jobs are so unappealing that it is hard to keep workers in them. In fact, 4 out of every 10 leave the occupation entirely within a year, and there is a shortage of these workers in the entire field because of it. Many prefer the fast-food business.
“Home care is absolutely the bottom rung on the ladder, but home-care workers are the people that spend the most time with the client,” said Adria Powell, who runs Cooperative Home Care Associates, a worker-owned long-term-care agency in New York. Sadly, Paul Osterman of the Massachusetts Institute of Technology’s Sloan School of Management calculates that if nothing is done to draw more workers into the field, there will be a shortage of at least 350,000 paid care providers by the year 2040.
The increasing demand for long-term care services as our population ages coupled with a shortage of workers and rising labor costs, is why the cost of in-home care keeps increasing.
Other Notable Findings
In-home care services weren’t the only area where costs increased. Overall, the annual median cost of all long-term care services climbed an average of 4.5% from 2016 to 2017, marking the second-highest year-over-year increase for nursing homes and home care since the study began in 2004. These were some additional findings from the survey:
- The national median cost for a one-bedroom unit in a private-pay assisted living community reached $3,750 per month, or $45,000 a year, according to the survey. That’s an increase of 3.36% from 2016 to 2017.
- National median rates for semi-private room nursing home care increased 4.44% and hit $7,148 per month, and private room nursing home care reached $8,121 per month, a 5.50% increase.
- For nursing homes, higher labor expenses and tightening Medicare rules have resulted in shorter hospital stays and sicker patients being sent to nursing homes for shorter rehab stays, driving up costs.
- Room and board for assisted living communities has gone up to accommodate residents who are sick, but not sick enough to require nursing home care.
- Luxurious amenities commonly found in private pay communities also increased costs of care.
- About two-thirds of respondents in a companion survey to this year’s Cost of Care report said they “expect government programs to cover all or part of their long-term care costs.” The primary government benefit that pays for long-term care is Medicaid, which is why it is so important for people to do Medicaid asset protection planning after age 65, or earlier if there is any sort of disability in the family.
Paying for Long-term Care
With long-term care services being so expensive, how can anyone afford them without going broke or depleting their assets? Are government programs enough to help pay the costs? Medicare will pay for skilled home health, but most home care and homemaker services are paid out of pocket. Medicare will also pay for limited skilled nursing care following a three-day hospital inpatient stay. But, Medicare does not pay one penny for long-term care!
Medicaid, on the other hand, has different income and functionality requirements. Medicaid is the single largest payor of long-term care costs because so many people can’t afford to cover the costs themselves, but what many people often don’t realize is, it is extremely difficult to qualify and the help of an experienced elder law attorney, such as myself, is absolutely essential.
Genworth includes the following extremely truthful quote in their survey findings: “It usually takes personal experience caring for a parent or other family member for people to realize the enormous costs associated with long term care and wake up to the fact that they themselves need to do a better job of planning ahead for how they will cover these costs.”
Planning for Long-term Care
Medicaid planning can be started while your mother is still able to make legal and financial decisions, or can be initiated by an adult child acting as agent under a properly-drafted Power of Attorney, even if your mother is already in a nursing home or receiving other long-term care. In fact, the majority of our Lifecare Planning and Medicaid Asset Protection Planning clients come to us when nursing home care is already in place or is imminent.
Generally, the earlier someone plans for long-term care needs, the better. But it is never too late to begin your planning.
To afford the catastrophic costs of long-term care without depleting all of her hard-earned assets, your mother should begin her Long-Term Care Planning as soon as possible. You both should also do Incapacity Planning and Estate Planning, if you haven’t done so already. Please call us to make an appointment for an initial consultation:
Fairfax Elder Law: 703-691-1888
Fredericksburg Elder Law: 540-479-1435
Rockville Elder Law: 301-519-8041
DC Elder Law: 202-587-2797
About Evan H Farr, CELA, CAP
