Balancing Finances and Healthcare

Long-Term Care Services

There are four main types of long-term care services:

  • Assisted Living Facilities – For those who need assistance with day-to-day activities and personal care services.
  • Nursing Homes – For residents who are in need of more intensive medical and physical services than assisted living provides.
  • Continuing Care Retirement Communities – These communities provide independent living, assisted living, and nursing home care in one community.  
  • Home Health Care Services – In providing a variety of medial and personal services such as nurses, therapists, and home health aides, senior citizens are able to retain some level of independence in their own homes.

One of the most popular options is home health care services.  Many seniors prefer to remain in their homes and receive services rather than move.  Available services include:

  • Personal care assistance with bathing, dressing, exercise, and other types of personal care areas.
  • Health care assistance with physical and rehabilitative therapy, nursing care, medical equipment, and medication assistance.
  • Help with housekeeping, shopping, and other homemaking duties.
  • Assistance with meal planning, preparation, and delivery.
  • Transportation and safety needs, such as daily telephone checks, to ensure the overall safety of the resident.

Selecting Home Health Care Services

Most home health care services can be arranged through hospitals, home health care agencies, and public health departments.  Depending on the needs of the patient, services provided by nurses, therapists, and/or home health aides can also be arranged.

Talking to those who have had experience with home care providers can help give advice to those trying to make the decision of a home health care service.  Family, friends, neighbors, doctors, and nurses are great sources to glean information from on particular providers.

Cost of Home Health Care Services

Depending on the location and type of services needed.  Genworth’s 2016 Cost of Care Survey, the median hourly rate for a home health aide was $20 in 2016.  Nurses, therapists, and other skilled professionals are more expensive.  Community-based adult day services average $68 per day.

Advance Directives

When unable to convey the wishes to the type of care received (or not received), an advance directive is one way to communicate to medical personnel in the event a catastrophic medical event occurs.  A stroke or accident can render a person unable to communicate their wishes, therefore, every adult should make plans to complete an advance directive.  Specifying the acceptable and unacceptable medical treatments are spelled out in an advance directive.  There are two types of advance directives:

  • Living Will
  • Medical Power of Attorney

Living Will

A living will states the preferred type of medical care a person wants to receive if they become debilitated and cannot communicate.  Beforehand, in the living will, the person specifies the treatment they want to receive or not receive in various situations.

Medical Power of Attorney

A medical power of attorney, also known as a durable power of attorney for health car or a health care proxy, names another person to take charge of medical decisions in the event that a person is no longer able to make the decisions for themselves.  It is not the same as a Power of Attorney which gives another person the authority to handle matters on their behalf, such as financial affairs.

Points to Remember with Advance Directives

There are several key points to remember pertaining to advance directives:

  • Regulations regarding advance directives differ from state to state.  An attorney should be consulted and used for the preparation of an advance directive.
  • At any time, an advance directive can be modified, updated, or cancelled, in accordance with state law.
  • For those who travel to several states, an advance directive for each state should be drawn up.
  • Current copies of any advance directives should be given to the health care proxy.
  • The physician and long-term care facility should also have a copy of any advance directives.

Paying for Health Care in Retirement

The cost of medical care has increased for decades.  In the past 20 years, inflation has not kept up with the rising cost of medical care.  In fact, it is predicted that medical and long-term care costs may continue to escalate 10% to 15% every year into the future.

When making decisions pertaining to retirement, each individual or couple will make unique decisions on how and where to live.  The options are usually determined by the financial resources available to pay living expenses.  Each option provides different benefits and allows retirees different methods to reach retirement and long-term care goals.

There are several options available to pay for long-term care costs and medical in retirement include the following:

  • Retiree Health Insurance Plans – Designed to coordinate with Medicare benefits, it is important to know the cost of the premium to be paid, as well as co-payments and deductibles.
  • Medicare and “Medigap” Insurance – A government issued health insurance plan, Medicare is for those who reach age 65 and consists of four different parts:  Part A, Part B, Part C, and Part D.
  • Medicaid – A joint Federal and state program to help low-income individuals with medical costs.
  • Long-Term Care Insurance – Purchased from private insurance companies, many long-term care policies help pay the costs of a nursing home stay, assisted living, and home health care costs.
  • Personal Savings – Some experts suggest saving for health care needs in retirement.
  • Home Equity – Whether selling a home, setting up a home equity loan, line of credit, or a reverse mortgage, many retirees find a source of funds in the equity built up in their home.
  • Employment – If health permits, many retirees will return to employment.  Whether by choice or due to a financial need, experts advise not to rely too heavily on employment.  Many seniors 70 years of age and older have some type of health problem that would keep them from working full-time.

As with any important financial decision, consult with a qualified financial planner who will work to provide the best source of income for the goals set.  Finances, directives, assets, and insurance plans are just a few of the areas of retirement that should be addressed.

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