Understanding Your Financial Options

The Aging at Home Association was formed because too few Americans have a plan to cover their future costs of care while aging at home – a place where most people wish to live out their lives.

As noted elsewhere, 2/3 of those age 65+ are estimated to need help at some point in their lives to age at home and most of this will be help with walking, dressing, transfers and other day-to-day activities. Medicare only covers a limited amount of services and only after events like a hospitalization. Individuals and families must fill in the gap at an average cost almost $50,000.

Additional costs may include the cost of home repair and modification to support you as you age, the cost of durable medical and other goods, health care costs, special transport, food delivery, communication tools and more.

Outside of general retirement income sources noted earlier, several other options exist to help cover these costs including:

• Long term care insurance (LTCI). LTCI policies are designed to cover the costs of home-based, assisted living or nursing home care not covered by health insurance, Medicare or Medicaid.  Most policies require medical underwriting to qualify.
  
  Long term care insurance has evolved over the decades since it was first offered.  Early policies underestimated the future costs of beneficiary care resulting in insolvencies and significant increases in monthly premium costs.  It’s estimated by the Long Term Care Insurance Association that a qualifying individual at age 55 would pay about $2,000 a year for such  insurance and would receive a $150 per day benefit at their time of need for about 3 years.  Costs are paid directly to qualifying facilities or providers.

• Short term care insurance (sometimes formally described as Short Term Home Health Care Insurance). This insurance pays a fixed amount of cash, subject to an overall lifetime maximum benefit, to the beneficiary when they demonstrate that they need help to live at home. 
  
  Payments may be for a short period of time – like after a hospitalization, or for a longer period when ongoing help is needed. It is generally designed to support care and day to day living in the home versus to cover the cost of assisted living or nursing care.
  
  The Aging at Home Association feels that this type of insurance is a good option for those that cannot afford, or cannot qualify for, long term care insurance and do not wish to live in assisted living or a nursing home.  Coverage generally requires minimal medical underwriting and monthly premiums are often much less than that of long term care insurance. That’s why Association enrollment is included with the purchase of Home Care Secure, underwritten by Guarantee Trust Life Insurance Company.  

• Veteran’s Administration benefits. It’s a surprise to many that  – if  they meet qualifying conditions – the Veteran’s Administration pays a monthly stipend to support the cost of home care and family caregiving.  Spouses of qualified veterans may also qualify.

Here are some additional resources that may help with your understanding of this topic: 

• The Veterans Administration – Details on Homemaker and Home Health Care Aide benefits available to qualifying veterans and their spouses.
• S. Administration on Aging – What is long term care insurance?
• AARP – Getting the best value out of long term care insurance.
• Home Care Secure – details on this short term home care insurance product that includes enrollment in the Aging at Home Association.