Few families want to discuss what would happen with Mom and Dad if they can no longer live on their own, especially when they are still fairly young and healthy. But that is exactly when the discussion should take place so the family can prepare for what could be future exorbitant costs, elder care and insurance experts say.

 

Few families want to discuss what would happen with Mom and Dad if they can no longer live on their own, especially when they are still fairly young and healthy. But that is exactly when the discussion should take place so the family can prepare for what could be future exorbitant costs, elder care and insurance experts say.


A Genworth Financial report says nearly two-thirds of people older than 65 will end up in some type of assisted living facility, with costs as high as $100,000 a year for nursing home care in Massachusetts. The average stay in a nursing home is 835 days and about half the residents pay their costs out of their own savings, the report says.


Some 83 percent of U.S. residents will be responsible for at least a portion of a loved one’s elder care costs, adds Wendy Boglioli, national spokeswoman for Genworth. Many figure Medicaid will kick in, but it will only after the parent has paid down most of their assets and is staying in a Medicaid-approved facility, she says.


So what does a family do to pay for quality care for their elderly parents? Some options:


1. Adult children can take out health, life or long-term care insurance policies on their parents or pay the premiums on their parents’ policy if their parents can’t afford them, says Dr. Robert Pokorski, chief medical strategist for The Hartford insurance company. Peter Ross, CEO of Senior Helpers national in-home care providers, adds that parents have to agree to having an adult child take out a policy for them and must be of sound mind because they have to fill out their own forms. He recommends having the discussion when parents are in their 50s or 60s.


2. Pokorski says there are hybrid life insurance policies that allow the policyholder to access the death benefit via a rider if there’s a need for chronic care. He says The Hartford has a LifeAccess rider that, unlike long-term care products and other hybrids, will pay for the family to care for the parent at home as long as the parent exhibits the need for help in at least two daily activities, such as dressing and eating. Unlike long-term care policies, this not “use it or lose it.”


3. Boglioli says adult children could use their 401(k) polices to help pay their parents’ expenses, but if they are younger than 59 ½, they will have to pay a penalty.


4. The Veterans Administration has a little-known policy called Aid in Attendance that will pay up to $1,900 a month for at-home care for veterans, their spouses or dependents at no cost, Ross says. Applicants need to prove they need care, and the process is lengthy — 26 pages — and could take six months before the VA makes a decision on whether you should get the benefit. “The good news is, if you get the aid, it is retroactive from when you applied,” Ross says.   


5. Reverse mortgages allow seniors to stay in their homes and use that equity cash to pay for in-home care, Ross says.