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Your Health
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Know Your Options for Paying for Long-Term Care

Resources are available to help with the cost of home care

Nearly one-third of all adults in the United States are unpaid family caregivers for a loved one needing assistance. With the expanding senior population, this number only promises to grow — and Santa Barbara is no exception. Two out of five Americans will need long-term care at some point in their lives. When the cost for this care falls directly on the individual needing care or on the family, which in many cases it does, these statistics prove significant.

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Many people believe that Medicare will pay for long-term care, but this is not the case, often leading people to wonder how they will be able to pay for the care needed. A local home care company, Senior Planning Services, which is celebrating its 20 years of service in Santa Barbara, offers information about resources available to help offset or supplement the cost of long-term in-home care.

“Affording long-term care is a common issue today,” explained Suzanne McNeely, president of Senior Planning Services. “Long-term care insurance and reverse mortgages are growing in popularity. In addition, the Veterans Administration has a plan to help qualified senior veterans, or a surviving spouse, afford private pay home care services.”

Although California does not participate, some states have cash and counseling programs that pay family caregivers through Medicaid. Click here for a list of the states where such programs are available.

Many people will find themselves funding private home care at least partly through personal resources, such as personal investments, property, pensions, annuities or other personal assets. Other options and resources for paying for home care services may include disease-specific support, such as respite for families caring for someone with Alzheimer’s or through the Area Agency on Aging. California also offers a limited home care allowance through the MediCal program.

Long-Term Care Insurance

Many insurance companies have brokers specializing in this type of insurance. LTC policies that allow for substantial home care benefits should be obtained to cover in-home care due to frailty or a chronic illness. Consumer Reports offers the following guidelines when shopping for LTC insurance:

» Consider buying at around age 65, as policies and coverage change over time. If there is a chronic or potentially incapacitating condition like diabetes, it is recommended to purchase between the ages of 55 and 60.

» Look for a strong insurer that receives high financial safety marks from insurance ratings companies.

» Buy a flexible policy requiring inability to perform no more than two activities of daily living, such as bathing.

» Cover future costs. It is vital that the daily benefit increase along with the price of care.

» A person needing assistance immediately would probably not qualify for this type of policy.

Home Equity Conversion Mortgage

Created by the Housing and Urban Development Department’s Federal Housing Administration, home equity conversion mortgages, or reverse mortgages, enable homeowners to withdraw some of the equity in their home, offering older Americans greater financial security. This special type of loan allows the homeowner to convert a portion of the home’s equity into cash. Unlike a traditional home-equity loan or second mortgage, however, no repayment is required until the borrower(s) no longer use the home as a traditional residence.

Here are some other facts about home equity conversion mortgages:

» To qualify, the FHA requires that homeowners be at least 62 years of age, own their home outright or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, and live in their home.

» Eligible homes must be a single-family home or a 1-4 unit home with one unit occupied by the borrower. HUD-approved condominiums and manufactured homes that meet FHA requirements are also eligible.

» The loan does not need to be repaid as long as one of the borrowers continues to live in the house and keeps the taxes and insurance current. The owner can never owe more than the value of the home at the time the heirs sell the home.

» When the home is sold, the estate will repay the cash received from the reverse mortgages, plus interest and other fees, to the lender. The remaining equity in the home belongs to the owner or the heirs.

The Veterans Administration

The Veterans Administration offers a plan to help senior veterans with a qualifying medical condition who require the need for assistance with activities of daily living. To qualify, the veteran must:

» Have received an honorable or general discharge

» Have doctor’s orders stating the need for aide and assistance of others daily

» Meet financial requirements

» Have served one day during an active war and had no less than 90 days of service

The surviving spouse of a veteran may also qualify providing he or she was still married to the veteran at the time of the veteran’s death. The VA offers two types of benefits, Aid and Attendance benefits and Housebound benefits. These benefits are paid in addition to a monthly pension to eligible veterans, but may not be paid without eligibility to pension. A veteran cannot receive both Aid and Attendance and Housebound benefits at the same time. Click here for more information.

Click here for more details on available options to help pay for in-home care and for tips on many ways to make home care more affordable, or contact Senior Planning Services at 805.966.3312. After a free in-home assessment, Senior Planning Services can make certain that any available financial assistance for aging in the comfort and familiarity of home is explored. By understanding the needs of the frail and maintaining connections with community resources and coordinating services as needed, the agency can help broaden the scope of care and the possibilities that in-home care can be a long-term sustainable option.

— Barbara Burger is Senior Planning Service’s media specialist.

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