How to Overcome the Rising Cost of Senior Care
What the Future May Cost
First let’s discuss what the future may hold in terms of healthcare costs. Fidelity3 estimates that a 65-year-old couple retiring in 2019 could expect to spend $285,000 on healthcare costs during retirement. Although the actual cost you’ll spend depends on the level of care you need, the geographic area in which you live as well as any extras you choose, here’s what your average monthly costs could be according to the most recent Genworth Cost of Care Survey4:
Help with household tasks that cannot be managed alone
“Hands-on” personal care, but not medical care
Social and support services in a community-based, protective setting
A residential arrangement providing personal care and health services
A residential arrangement providing personal care and health services
Memory Care is another level of care specifically for those with Alzheimer’s disease and dementia. There is little published data on average costs because it varies so greatly, however it typically ranges from $2,000 to $7,000 monthly.
Why Do Senior Care Costs Keep Rising?
Even if you have an idea of what senior care may cost now, unfortunately those numbers likely won’t hold. Genworth4 has found that senior care costs have steadily risen across the United States over the past 15 years. Given the Baby Boomer stats above, that may not be all that surprising but what is unexpected is the substantial cost increase of in-home care. According to Genworth4, homemaker services increased 7.14% in a single year and home health aide services rose 4.55% during that time. In senior living, assisted living only rose 1.28% in that same time frame for perspective.
Specific to in-home senior care, previous Genworth4 research has pointed to these factors for continuing increases:
- Wage pressures
- Regulatory changes
- Labor shortages
- Sicker patients
- Employee retention challenges
How much will Medicare or Medicaid Help?
Many assume Medicare or Medicaid will be the primary sources of help in paying for senior care, however there are many misperceptions about what they actually cover.
- Medicare only pays for senior care if you require skilled or rehabilitative care.
- While Medicaid does pay for the largest share of senior care, to qualify your income must be below a certain level, among other criteria.
In addition, private health insurance typically only covers the same kinds of long-term care as Medicare.
Options to Offset the Cost of Senior Care
The good news is that there are options to help you pay for senior care beyond your own assets. They include:
Learn more in our Dollars and Sense Financial Guide to Senior Living, or contact Richfield today to schedule a virtual tour.
