Assisted Living: How to Plan Financially

Meeting the costs of assisted living requires financial planning and evaluation. Elder care costs continue to rise and health insurance companies rarely cover more the total bill, unless your loved one procured a long term care insurance policy.

While assisted living centers have been available the United States for many years, the growth and availability of assisted living has had a dramatic increase since the early 1990s. Assisted living is a residential alternative that promotes maximum independence for each resident through a combination of supportive services and assistance. The definition of assisted living from one state to another may vary and so will the cost and types of service.

By Michelle Andrews

When Betty Hoff moved into an assisted-living facility in Fowler, Calif., two years ago, the 86-year-old thought she didn't have anything to worry about financially. She had a long-term-care insurance policy that would pay up to $3,000 a month for three years of nursing home, assisted living, or home care. Hoff has severe arthritis and can get around only with a walker or cane, which means she could no longer cook, clean, or do the laundry. But her insurer denied the claim. Hoff wasn't cognitively impaired, and the company said she didn't need help with enough "activities of daily living," or ADLs, to qualify for benefits.

People seem to want and need to be close to others. As we grow older, many of us also want to continue an active, satisfying sex life. But the aging process may cause some changes.
What Are Normal Changes?

When your spouse dies, your world changes. You are in mourning-feeling grief and sorrow at the loss. You may feel numb, shocked, and fearful. You may feel guilty for being the one who is still alive. If your spouse died in a nursing home, you may wish that you had been able to care for him or her at home. At some point, you may even feel angry at your spouse for leaving you. All these feelings are normal. There are no rules about how you should feel. There is no right or wrong way to mourn.

As retirement approaches, it is important for every household to assess its financial identity (assess its finances). Waiting too long might mean missing one or more opportunities to preserve maximum financial independence in the future. To help get you started, can you say 'Yes' to the following statements?

Agencies will typically be the most expensive; independent providers will be the least expensive. However, home care agencies are also easier to use, since the agency finds and places the provider, handles payroll and any problems that may arise, and usually provides coverage for sick or absent providers. Agencies that are licensed and bonded are generally a good choice, although there are always exceptions. You have avenues of recourse (complaints, legal action) when dealing with agencies that are liable for problems. There is no real recourse (except firing) when dealing with independent providers or ones found through registries.

It used to be pretty simple.  So long as you were independent, you lived in your own home, or moved to a retirement community.  If you needed a little help with personal care, and your meals provided, you went into board and care.  If you needed quite a bit of help with personal care, or skilled nursing care, you went into a nursing home.

Ben has been married for 47 years. He always managed the family's money. But since his stroke, Ben can't walk or talk. His wife, Shirley, feels overwhelmed. Of course, she's worried about Ben's health. But on top of that, she has no idea what bills should be paid or when they are due.
Eighty-year-old Louise lives alone. One night, she fell in the kitchen and broke her hip. She spent a week in the hospital and 2 months in a rehabilitation nursing home. Even though her son lives across the country, he was able to pay her bills and handle her Medicare questions right away. That's because several years ago, Louise and her son talked about what to do in case of a medical emergency.

Lucy is worried. She's lived in the same neighborhood for 50 years, but things seem to be changing. Last week, her friend Rose was walking to the store when a young man ran by and pulled her purse right off her shoulder. Two weeks ago, Joe, the man upstairs, put his grocery bags on the curb while waiting for the bus, and before he knew it, someone had picked up his bags and run off. Lucy feels sad to think she might have to move. She wonders, is anywhere safe for older people anymore?