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Aging in Place: Financing Long-term Care at Home

The question for many American seniors is no longer “what will happen when I die?” but “what will happen if I live?” Americans are living longer, but this can mean long-term health complications that require expensive treatment. Therefore, a lot of Americans are considering how to pay for the cost of long-term care. While nursing homes and assisted living facilities have been the traditional choice for those requiring routine medical care and daily living assistance, there is a growing trend toward aging in place. But remaining in one’s home means finding affordable and quality in-home care and figuring out how to pay for it. Thus, Medicaid planning is an important part of a comprehensive estate plan.

Nursing Home Cost of Care

Those who reside in long-term care facilities have the benefit of around the clock medical and nursing care. But these services come at a heavy cost. The average monthly cost of nursing home care in New York City is around $142,116 per year. This can represent the lion’s share of a senior’s net worth. Therefore, seniors are always seeking plausible means of cutting long-term care costs.

Home Health Cost of Care

In recent years, people have begun opting for care in their homes instead of institutional care. This “in-home” care is also referred to as a form of “aging in place.” Some nursing home facilities are creating campuses where residents can move from one level of care to the next as their needs change and still stay within the same institution. Aging in place, however, generally refers to remaining in one’s home. Many seniors strongly prefer residing in their own homes, as opposed to institutional care. There are a number of reasons for this.

For instance, as eyesight is diminished, one may find it easier to navigate a familiar environment than being confined to a residential room for fear of falling or getting lost. Likewise, seniors who are still mobile and self-sufficient may prefer remaining near long-time friends, community centers, churches, and other familiar places that keep them engaged in their neighborhoods and give them a continuing sense of purpose that is often lost in institutional settings.

Unfortunately, although some savings may be realized by remaining at home, around the clock daily in-home care in New York can cost between $52,000 and $98,000, depending on the facility, services needed, and the region of the state. Therefore, the savings is minimal in many cases. This also presumes no other services are needed in order to accommodate continuing aging in place, such as meal and grocery delivery services, transportation, and continued costs associated with home ownership.

Paying to age in place

Most Americans simply do not have $100,000 per year in disposable income or savings. Likewise, most people would rather preserve their life savings as an inheritance for their children and other loved ones. Medicaid generally only pays for long-term care once a person becomes eligible. This only occurs a person has spent all but $2,000 of their own assets. Therefore, a long stay at the nursing home can be a financial disaster for a family. Elder law attorneys can often advise clients in specific, targeted estate planning strategies to reduce the loss of income and assets, while also determining if aging in place is a viable option. Each person’s circumstances vary, so it is important to begin planning early in one’s retirement, long before care is needed.