Staying Financially Healthy

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....​

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.