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Can You Afford Home Care? New Study Says Maybe Not

As people age and reach their senior years, their physical and mental health declines. In some cases, this is just enough of a health decline to inhibit their ability on a day to day basis. While they may not be physically strong enough to do average daily chores, or may lack the mental clarity to care for themselves, some seniors still don't require the constant care provided in nursing homes. Yet, because they may not have the financial resources, the home health care that they do need is often unavailable to them.

Money Plays a Part in Determining Who Can Obtain Home Health Care Services

In a recent study, it was found that only two out of five seniors can afford home health care services. Even those few who can afford it are only able to pay for the services for a few years. While home health care services are needed on a long-term basis by many seniors, only a rare few have the financial resources to continue paying for it throughout the later years of their lives. Richard Johnson of the Urban Institute's Income and Benefits Policy Center notes that this is the reason most seniors end up in government-run nursing homes. The reason this seems to have become a common situation across the country is that physical decline is especially common among the lower socioeconomic classes. Mr. Johnson says his study has also found that frailty and poor health among the elderly is far more common in those with poor educational backgrounds and less wealth.

Regardless of financial status, most seniors are adamant about staying out of nursing homes. Understandably, the vast majority of senior adults are eager to remain in their own homes, where they can continue to live independently. In spite of this desire to avoid relocating into assisted living facilities, fewer seniors are taking advantage of home health care. This contrast suggests money, not need, is keeping most seniors from making use of home health care services.

Working out of the University of Michigan, Johnson and his team wanted to conduct a study to take a closer look at the problem. For the purposes of their study, they divided home health care needs into three groups:

  • Those needing only limited care of 25 hours per month at a rate of $475

  • Those needing moderate care of 90 hours per month at a rate of $1,170

  • Those needing extensive care of 250 hours per month at a rate of $4,750

Once they looked at the results, they found that some level of home health care could be afforded by most seniors. The researchers found that up to 75% of seniors over 65 years of age could afford moderate home health care for about two years, but that would require cashing in most of their assets. As many as 58% of the seniors in the study would be able to afford two years of extensive home health care by cashing in their assets.

Taking the study a step further, Johnson's team wanted to examine the situation for seniors in more dire need of home health care. These adults were defined as those suffering from dementia or cognitive decline. This group also included those unable to physically care for themselves on a daily basis, such as seniors needing help with their meals, bathing and other hygiene issues, dressing, using the toilet, or moving about the home.

In looking at seniors in this group, it was found that 57% of the seniors could afford two years of moderate care. Only 40% of seniors in this group were able to pay for two years of extensive home health care services. Since these are the seniors most in need of home health care, they will be hit the hardest.

For seniors in need of care and with limited resources, they will have to rely on family first. This means family members will have to become caregivers and take turns looking after the senior in the place of a professional caregiver. Even when some home health care service is provided, family members will take up the majority of the burden in caring for their elder loved ones. In these situations, professional home care aides only provide a break for family members, so they can meet other obligations.

How Can Seniors Pay for Home Health Care?

These findings aren't especially unexpected, says Eliot Fishman. As head of a consumer advocacy group, which is called Families USA, Fishman says that, while the results of the study are alarming, they aren't at all surprising. He says the matter is complicated by discussions about healthcare reform that don't consider home health care needs. While the focus is more on on-site medical care, Fishman says any discussion on healthcare reform should include addressing the need for at-home care.

The reason Mr. Fishman says this needs to be a bigger concern is that home health care is expensive and is rarely covered by one's health insurance policy. Even the cheapest home care agencies charge as much as $22 per hour. While long-term care insurance is available, only fewer than 11% of seniors have it. Medicare is another option, but they require applicants to be financially devastated before they will approve coverage for home health care. Even when you can qualify, there's a long waiting list to get the approval for coverage.

Washington is one of the few states to have started addressing the problem. Every worker in the state is charged a tax of 0.58% to offset the cost of managed care. The money goes into a special fund, which can be accessed if a worker needs home health care or assisted living. It can also be used to compensate family members who must take care of a disabled or senior loved one.

Mr. Fishman believes the best alternative is to make changes to Medicare and Medicaid. Altering these healthcare services to allow for home health care coverage would allow many more seniors to obtain the care they need and it would help decrease the burden on understaffed nursing homes. However, in order to make these changes, this issue must be addressed independently of any other discussions on healthcare reform. Until that happens, millions of seniors will continue to struggle to pay for the care they need.

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