Who’s Taking Care of Grandma?

Here’s the scenario:

Mom raises you and your siblings from birth.  She’s a vibrant mom as she sends you off to school, plans play dates with your friends, and makes your favorite dishes for supper. Eventually, you and your siblings all move out, start families, and visit ‘mom’ on the holidays and the occasional weekend.


Years pass, and your own kids are now moved out and graduated from college.  A couple more years pass.  One day, you’re at your mom’s house celebrating her 81st birthday when you find out she hasn’t bathed in 4 or 5-days.  She also hasn’t been cooking healthy meals for herself, and she rarely leaves the home in her car anymore.  Your concerns are now more serious than you previously thought.


Since your father passed away 2-years prior, she’s now all alone and cannot take care of herself in a safe manner with the dignity she deserves.  You sit down with mom to discuss some options, and she lets you in on her financial situation.  She has $120,000 in retirement savings, and currently receives $1,800/mo. from Social Security.  She also has a $2,000/mo. income from your father’s survivorship pension.  What do you do now?


If you think Medicare is going to pay for skilled nursing care for the remainder of her life, think again.  Medicare only fully covers the first 20-days in a skilled nursing facility.  The next 21-100 days are partially covered, where a co-pay of up to $154/day is the responsibility of the patient/recipient.  That alone would cost $4,600/mo.!  And after 100 total days of skilled nursing care, there is NO COVERAGE!


See article here http://www.medicare.gov/pubs/pdf/10153.pdf


Hopefully, this gets you thinking about the inevitable future of everyone needing ‘some’ form of care.  “Yes,” there are assisted living facilities that cost significantly less, but these facilities are for people who are fairly independent.  According to research compiled by several nonprofit senior living organizations, including the Assisted Living Federation of America, costs for assisted living facilities in the Los Angeles area around $3,022/mo.


According to the California Association of Health Facilities, the average cost of a ‘skilled nursing facility’ is $6,875.  And if you want to remain in your home—living with the dignity and privacy you’ve prepared for entire life—the hourly cost in California is $36 (Source: Cost of Care Survey, Genworth Financial, March 2008).


Doing some quick math and assuming that someone needs 12-hour/day assistance in their home, $36/hour x 12-hours x 7-days x 52-weeks equals $157,248 per year!!  Even if you cut the needed time in half, that would still cost $78,600 per year.


The final nail in this subject is the fact that people don’t necessarily want to plan for these ‘not so golden’ years.  And that’s an emotion that cannot be changed.  Who wants to picture themselves sitting in a rocking chair starring at Judge Judy or Matlock on their television at 2:00PM on a Wednesday afternoon wearing an old sweater?  Who wants to picture themselves shuffling their feet on the way to bathroom worrying about tripping on something that might break a hip and set them back for a very long time?  Nobody does.  But many of you reading this might be in this condition one day and have a need for additional income to pay for a little (or a lot of) extra help.


Long-term care insurance is something people in their 50’s should begin to explore.  While you could purchase it at a much earlier or later age, there are possible risks that you will have paid too much for too long of a period, or waited too late in life—as other medical conditions could preclude you from qualifying for a policy.


As I recently discussed with a client that we can insure just about everything and anything in our life, why don’t most people take the time to ensure/insure they have everything needed to live out their last years with dignity?

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