Budget For Caregiving
When we think of frontline workers in the healthcare profession, doctors, nurses, and pharmacists are a few that come to mind. People who are usually left off the frontline workers list but are also committed to helping the sick and elderly are caregivers.
Because of this, caregiver advocacy groups recommend families include caregiving services when budgeting for long-term care needs. Caregivers have been described as “the backbone of the U.S. health care system,” and this was attested to during the COVID-19 pandemic. Caregivers proved their mettle when many of them, including adult children, took care of their elderly relatives or clients who were sheltering in place to avoid exposure to the coronavirus disease.
There are about 53 million American caregivers who work an average of nearly 24 hours a week without pay, according to the “Caregiving in the U.S. 2020” report by AARP and the National Alliance for Caregiving (NAC). For care recipients who are not living in an assisted living facility or nursing home, only 3 in 10 use paid help from aides, housekeepers, or others, the report said.
AARP suggests that it would cost tens of thousands of dollars to pay each of the 53 million caregivers and reimburse them for their time. But, caregiver advocates say the money would help because caregivers spend an average of $7,000 to $13,000 of their own money each year on caregiving-related costs.
What’s more, the extra spending can place a financial burden on caregivers. For example, 28 percent of caregivers responding to the AARP/NAC study said they have stopped saving money, while 23 percent said they have taken on more debt.
Informal, unpaid caregivers can always ask their loved ones to pay them, and those who receive care can offer financial assistance. However, in many cases, especially those involving aging parents and their children, caregivers do not ask for compensation or reimbursement.
Growing concerns over the financial plight of caregivers have prompted national discussions on how to better support caregivers.
Plan for Caregiving Services
If you are currently receiving care, there are ways to help alleviate your caregiver’s financial burden. These actions are also worth considering if you are planning in advance for long-term care:
1. Offer money—if you can afford to—that would cover a caregiver’s bill. Many caregivers are unable to save extra money or set up an annuity because of ongoing financial obligations. So offering money to cover an expense may help the caregiver.
2. Purchase long-term care insurance policies that cover in-home care, including the type of care you are receiving. Generally, this type of insurance is offered by a private insurance company and covers a range of services, including non-medical care. Also, some life insurance policies have provisions for home care and other forms of long-term care.
3. Find out which federal programs pay for caregiver compensation. Veterans Administration has Homemaker and Home Health Aide benefits for veterans in need of skilled care, case management, and daily living activities, such as bathing, dressing, and meal preparation. Medicaid also pays for in-home personal care assistance and allows people who need the care to hire relatives and paid caregivers. Medicare does not pay for non-medical in-home care.
4. Leave monetary gifts. Some older adults leave an inheritance or a monetary gift to the caregivers who took care of them while they were living. While this is admirable, individuals should speak with an elder law attorney when creating a post-life plan that involves monetary gifts to caregivers.
5. Create a formal care plan. In cases of family caregivers, it may be necessary for family members to come together to create a care plan for their aging loved one. The plan may include an older adult child or other relative moving in with the person who needs care and each family member agreeing to contribute to caregiving costs.
AARP suggests creating a written personal care agreement between the family member (or members) who will get paid for providing ongoing care and those who will pay for care. Families who prefer a contract that outlines salary and specific duties may need to contact an elder care lawyer to help with negotiations.
Keep in mind that caregivers who are paid, including a family member, are legally required to report their caregiving compensation as taxable income.
Consider Paid Caregiving Services
When making future caregiving plans, families have the option of hiring licensed and insured home care agencies to provide caregiving services. These agencies can provide a wide range of services by personal care assistants, home health aides, certified nursing assistants, and other experienced health care workers.
It may be more economical in the long run for families to work with home care agencies than have unpaid family members caring for their elderly loved one.
Caregivers from agencies work around-the-clock shifts while in-person caregivers live with the care recipient. Generally, home care agencies tailor their services based on the needs of their clients.
Caregiving duties can include:
- Providing personal care services, such as helping seniors with bathing, dressing, grooming, and eating
- Providing light housekeeping services (cooking, cleaning, grocery shopping, running errands)
- Providing companionship (accompanying seniors to doctor’s appointment, transporting them to social events)
Medicare pays home care agencies for skilled nursing care, such as wound care, intravenous therapy, injections, physical therapy, and speech therapy. Some private insurance companies also pay for certain skilled nursing care services.
Caregivers commit their time and energy to care for their loved ones or provide their professional services to paying clients. So, it’s never too early or too late to include caregivers when budgeting for long-term care for now as well as in the future.