By Chris Clow | Care of Reverse Mortgage Daily
Consumers need to fully understand all of the associated costs, terms and conditions prior to applying for a reverse mortgage transaction, and that the ultimate decision made by an older homeowner at or over the age of 62 should be in consultation with a prospective borrower’s family or other trusted advisors.
This is the perspective shared by Chris Thetford, VP of communications and marketing with the Better Business Bureau (BBB) of St. Louis, Missouri in a story broadcast by a local FOX TV
“[A prospective applicant] should look at [the key requirements of a reverse mortgage] and see if they can qualify,” he says. “But another good tip is to have a big conversation with your whole family so that they understand the process that you’re thinking about taking in by having a reverse mortgage.
By Mark Olshaker | Care of the National Aging In Place Council
Medicare is what many people think the Affordable Care Act – AKA Obamacare – should have been: a single-payer system in which the government takes responsibility for a wide range of medical, hospital and drug costs. Since its inception in 1966, Medicare has been a boon to many millions of American seniors. But like most government programs, it is full of complex rules and regulations, and not intuitive or easy to understand.
A practicing pediatrician in Maryland, who also has a law degree, recently was approaching Medicare age. As she began the process of converting her own health coverage, she admitted to being overwhelmed, commenting, “I’m a doctor and a lawyer. If I need help understanding and getting through all this, I can’t imagine what the average person goes through.”
Indeed, Medicare is a machine with a seemingly countless number of moving parts. It generally kicks in at age 65, but if you are working for a company with 50 employees or more that offers health insurance, you can stay on that plan as long as you work and Medicare will act as a secondary insurer. This is only one of the many “if then” conditions of coverage, and terms like “generally” will be liberally sprinkled throughout this brief overview, so please don’t take it as definitive. The best place to start, although prepare to spend a fair amount of time there, is medicare.gov.
For home healthcare, Medicare covers: skilled nursing, generally up to 28 hours a week; skilled therapy services, including physical, speech and occupational therapy; medical social services ordered by your physician; medical supplies; and durable medical equipment.
Now for the “fine print.”
Medicare does not cover all healthcare services. Healthcare services not covered by Medicare include, but are not limited to:
• alternative medicine, including experimental procedures and treatments, acupuncture, and chiropractic services (except when manipulation of the spine is medically necessary to fix a subluxation of the spine. A subluxation is when one or more of the bones of the spine move out of position);
• most care received outside of the United States;
• cosmetic surgery (unless it is needed to improve the function of a malformed part of the body);
• most dental care;
If you qualify for the home health benefit, Medicare covers the following types of care:
• Skilled nursing services and home health services provided up to seven days a week for no more than eight hours per day and 28 hours per week (Medicare can cover up to 35 hours in unusual cases).
• Medicare pays in full for skilled nursing care, which includes services and care that can only be performed safely and effectively by a licensed nurse. Injections (and teaching patients to self-inject), tube feedings, catheter changes, observation and assessment of a patient’s condition, management and evaluation of a patient’s care plan, and wound care are examples of skilled nursing care that Medicare may cover.
• Medicare pays in full for a home health aide if you require skilled services. A home health aide provides personal care services including help with bathing, using the toilet, and dressing. If you ONLY require personal care, you do NOT qualify for the Medicare home care benefit.
By Mark Olshaker | Care of the National Aging In Place Council
Half of all men age 65 or over and 60 percent of women will need a high level of personal care at some point. Three-fourths of seniors with long-term care needs live at home, and nearly two-thirds of those receive all of their help from unpaid family members and friends. For those who do have compensated care, Medicare or Medicaid pays about 42 percent of the costs and private insurance covers about five percent, the remaining 53 percent is paid out-of-pocket.
When we consider average lifetime long-term care spending, 53 percent comes out-of-pocket, 34 percent is paid by Medicaid, and 13 percent from other sources. For home and residential care, it breaks down to 68 percent out-of-pocket, 19 percent Medicaid and 13 percent other. For nursing home care, it’s 35 percent out-of-pocket, 51 percent Medicaid and 14 percent other. And keep in mind that Medicaid is needs-based and not available to most seniors with moderate assets.
Medicare pays for a limited amount of long-term supportive services, but eligibility requirements are strict and generally cover only four to ten hours a week....
By Mark Olshaker | Care of the National Aging In Place Council
In the field of health technology, we’ve come a long way from the days of the “I’ve fallen and I can’t get up!” emergency response devices. They’re still around, and highly useful for elderly or impaired seniors, but now they’re mobile and much more sophisticated.
Laurie M. Orlov, a technology expert, writer, speaker and elder care advocate, is the founder of Aging in Place Technology Watch, which provides thought leadership, analysis and guidance about technologies and services that enable boomers and seniors to remain longer in their home of choice. She divides aging in place technologies into four categories:
By Mark Olshaker | Care of National Aging In Place Council
“As health care providers, we’re very aware of people who could be cared for at home. But our healthcare system is very siloed, and physicians and hospitals don’t always have the incentives to keep people at home.”
So states Teresa L. Lee, an attorney and Master of Public Health, who is the Executive Director of the Alliance for Home Health Quality and Innovation, a nonprofit with a mission of leading and sponsoring research and education on the value home health provides to patients and the entire American healthcare system. The problem, she observes, is that the system was built in a certain way, and that way can be summarized by the phrase “fee for service.”
These issues do not affect older adults in a direct financial way as much as they do the healthcare payment system as a whole. But the indirect effect in terms of higher insurance and Medicare premiums and co-pays and limiting resources, can be profound.
When it comes to medical care, particularly for older adults and the elderly, there is often an inherent tension between payers – the government, insurance companies and individual patients – wanting the keep costs down, and hospitals having to fill beds and providers to perform services for payment....
As we continue our "Cost of Aging" series we cover the possibility of downsizing. Bendix Anderson addresses some of the challenges.
Moving from a larger home to a smaller one may help older adults lower their costs or help pay for their needs as they grow older.
However, moving comes with its own set of challenges and expenses.
Many older adults have an emotional connection to their home and neighborhood – about two-thirds have lived in their current home for over a decade. “Many (older adults) prefer to remain in their current homes and communities,” according to the Joint Center for Housing Studies.
However, if they have raised a family, their current home may have space that is no longer being used......
Many older adults use reverse mortgages to do home renovations. The purpose is to remain in their homes for as long as possible. However they frequently don't take aging in place needs into consideration when deciding upon which renovations to make. This is where a Certified Aging In Place Specialist (CAPS) comes in. The right analysis can save hundreds of thousands of dollars and make for a much safer and enjoyable life style for the home owners and their guests.
The National Home Builders Association recognizes individuals with the CAPS designation as experts in home modification for older adults.
This is what Bendix Anderson in connection with the National Aging in Place Council (NAIPC) has to say about home modifications and aging in place.
As older adults become more frail, they may have difficulty navigating their own homes where they have lived for years. Stairs may become difficult to climb. More frail older adults may use a wheelchair that doesn’t fit through narrow doorways.
If aging persons want to continue to live in their current homes, they may need to renovate them so they become easier places to live.
These renovations or modifications range from simple changes like removing throw rugs that may lead to falls to wider doorways that can accommodate a wheelchair to “grab bars” that may prevent falls in bathrooms. Substantial but basic design and structural modifications average $9,000 to $12,000 per one-story residence, according to an analysis by MetLife.
Homes may need different renovations depending on regional differences in housing stocks. For example, many homes in the Northeast are built on multiple levels and fail to provide a bedroom and bathroom on the first floor, while nearly 84 percent of homes in the South provide single-floor living, according to the Joint Center for Housing Studies.
About 10.3 million households aged 50 and over report having someone at home with serious difficulty walking or climbing stairs, according to the JCHS. More than half – 5.5 million households – live in homes that require them to climb stairs to enter or exit. “Assuming the average outlay for a ramp falls at the midpoint of the range described above ($2,400), the cost of improving the accessibility of these 5.5 million homes would total $13.2 billion,” says the JCHS. That shows a huge unmet need that may force many frail older adults to eventually move.
Aging in place may be more cost-effective for seniors than “downsizing” and moving into formal senior housing.
MetLife deepened its analysis to include some of the costs included in the price of living at a seniors housing community. A typical older adult living in a single-family home might pay:
• $850 per month for costs such as utilities, taxes and maintenance
• $250 per month for food
• $456 per month for three hours of daily assistance, twice weekly at $19 per hour
• $804 per month for three days per week in adult day services.
Even with these costs, it would still take just 14 months to break even on the cost of home health services and the home renovation, compared to the cost of moving into an assisted living community priced at $3,000 month. “By the end of 24 months there is a net savings near $10,000 (if you remain in your home),” according to MetLife.
For the next few weeks we will be addressing the proverbial elephant under the throw blanket in most of our financial housing - the Cost of Aging. If we do not take these points into consideration our golden years could become tarnished.
This week - Housing: The cost of available options - courtesy of Bendix Anderson.
Aging senior citizens often face difficult decisions about where they want to live. Most – more than 90 percent – want to stay in their
current homes as they grow older, according to research from AARP.
Remaining in a single-family home can involve expensive renovations, as seniors become more frail, and potentially even more-expensive home health care services.
Moving to a seniors housing community, like an assisted living property or a nursing home, may be even more expensive. Many seniors lack the financial resources to pay for it, though homeowners typically have more financial reserves than elderly renters.
Selling a single-family home may help finance a move to a seniors housing community – and home prices have recovered much of the value lost in the crash. Most older Americans owned homes in 2012, including 78.4 percent of people older than 80, according to Census data.
Selling a home may also help pay for a move to rental housing, though the cost of an apartment has also risen faster than inflation in many markets. Seniors may also struggle with the transaction costs of selling a home and moving.
Even selling a home may not pay for a nursing home for very long. The typical homeowner aged 65 and over has enough wealth to cover the cost of a nursing home for just 42 months – less than four years, according to the Joint Center for Housing Studies.
Private insurance policies cover 60 to 70 percent of the cost of long-term care – but the cost of premiums are much more expensive than what many older adults can afford, averaging more than $4,100 per year for persons over 75 years old. Just 11 percent of households aged 65 and over had private long-term care insurance in 2010, according to the Congressional Budget Office.
Medicaid is the default option without financial assets or long-term care insurance to pay for long-term care. That includes two-thirds of nursing home residents aged 65 and over, according to the CBO. To qualify, individuals must spend down or otherwise dispose of their assets. Home equity may be excluded for a time, but Medicaid eligibility criteria include home equity limits and most states will try
to recover expenses from beneficiaries' estates, according to the Joint Center.
When you are ready to make some of these decisions give me a call. As an Accredited Financial Counselor (AFC) I am able to assist in your budgeting so that you won't run out of money. Also, As a Certified Aging In Place Specialist (CAPS) I can help you to decide how best to spend some reverse mortgage proceeds on home remodeling so that you can safely stay in your home.
Marc has 36 years in financial services and 6 years in teaching.
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