Gene Williams didn’t think he’d have to plan for his mother, Ann Armstrong, to be 95 years old.
No one in Williams’ family lived past the early 60s, he said. It didn’t seem as though planning for long-term care for a parent would be an issue.
But just two weeks ago, right after her birthday and after about 10 years of living on her own alone, after the death of her husband, Armstrong moved to an assisted living facility in Pasadena.
Her memory had declined to the point that she needed additional help more often, Williams said.
The decision to move to assisted living wasn’t necessarily a difficult one, but gathering the financial resources to pay for it was another problem altogether.
“I just had no idea,” he said.
COSTS CONTINUE TO RISE
The realities of paying for the care of older adults, particularly for long-term care because of major health issues, can be daunting and intimidating, and a growing number of American families are facing those realities every day.
Studies have for years suggested that medical bankruptcies are increasingly a problem for older Americans. In August, a study from the Consumer Bankruptcy Project concluded that the number of people 65 or older filing for bankruptcy had tripled since 1991.
One reason for the increase is that planning for late-in-life care has been made more “responsibilized,” and is less reliant on social safety net programs, the study concluded.
That means more people don’t draw adequate benefits and, as a result, have to pay for more of their long-term care needs with personal resources.
The average annual cost for long-term care can vary wildly based on the type of care a person is seeking. In the Houston area, the average cost for a home health aide is about $49,000 a year, according to Genworth Financial, an insurance company that publishes an annual cost of care survey. Assisted living facilities cost about $46,000 on average in the metro area, while cost of skilled nursing facilities range from $61,000 to $83,000 on average depending on how much privacy a person desires, according to insurer Genworth.
The national annual median cost of a private room in a nursing home is $100,375, Genworth found in its 2018 Cost of Care study.
Genworth tracks trends in senior care and has consistently found: Long-term care costs for nursing homes, assisted living facilities, and in-home care are higher than most people have planned for and only continue to rise, the insurer said.
Overall, the rising cost of care has outpaced inflation. The Consumer Price Index for all urban consumers was 2.1 percent for the first half of 2018, according to the study. The annual median cost of a room at an assisted living facility grew by 6.67 percent between 2017 and 2018. Meanwhile, the cost of a shared room in a nursing home jumped by 4.11 percent.
The national hourly cost for a home health aide in 2018 was $22, according to the study.
For Williams, the way to avoid a financial crisis was seeking out Andrea Zaite, a licensed clinical social worker and geriatric care manager. Zaite was able to help Williams find extra ways to help pay for his mother’s care, including VA benefits she was eligible for through her first husband, who was killed in World War II.
“There’s so much stuff out there, I didn’t have the time, or even know where to start looking for this stuff,” Williams said.
Many people don’t understand how programs meant to help them pay for the cost of health care work, Zaite said.
“It’s extremely expensive,” she said. “The current generation of late 70-, 80- and 90-year-olds, I don’t think that was talked about in their generation. I don’t think they planned for that, and I really think they believed that the Social Security and Medicare system was the answer and the end-all, be-all.”
HAVING A PLAN
A lot of people don’t review their benefits and just make assumptions about how they’ll be covered, she said.
She often encounters people who don’t understand that Medicare doesn’t pay for long-term care, and that Medicaid has income limits, which means that people must spend much of their own savings before they qualify for government assistance.
Even for people who are financially secure, there are still many financial concerns to deal with when it comes to long-term care.
Mary Cooper, a Galveston resident, had to decide who would take care of financial and medical decisions on her mother’s behalf after her mother, also named Mary, suffered a stroke.
For Cooper, the task was easier because her mother had taken the initiative to make plans and have them written down in advance of a medical crisis.
Her mother also built a home that she would be able to move around in, even in a wheelchair, allowing her to stay in her home with a caregiver.
Having that plan in place before it was needed was a relief, Cooper said.
“She had all her papers in order,” Cooper said. “All we had to do was go to her. It was really wonderful that she had it all figured out.”
Planning in advance can have a big effect on an individual’s and a family’s financial stability, said Maureen Kuzik McCutchen, an attorney with Galveston’s Mills Shirley law firm who specializes in estates.
Even clients who have means and the wherewithal to seek out an estate lawyer to plan can be hit by sticker shock if they need a long-term care in a facility. A nice nursing home can cost up to $100,000 a year, she said.
“It’s way more expensive than people think,” McCutchen said. “People, when they retire think, ‘I’ve got a million dollars.’ Well, a million dollars is nothing if you need extended care.”