YOUR PARENTS ARE AILING. NOW WHAT?Parents who live far away or have special needs may require a geriatric-care manager
As a Citibank branch manager in Mamaroneck, N.Y., Lucille Alexander had little time to devote to herself, much less to her elderly parents and disabled sister living nearby. Until recently, she didn't have to worry. Her mother, 80, managed the household and cared for Alexander's sister and 81-year-old father, who suffers from Alzheimer's disease. Then her mother was diagnosed with Parkinson's disease.
Suddenly, Alexander was the primary caregiver for three adults. Finding help wasn't easy. But after an initial period of panic, she located an elder-law attorney who recommended a geriatric-care manager. ``She recruited and screened caregivers until we found a wonderful woman, Josie, who became part of the family,'' Alexander says. ``She knew the diseases my parents had and understood the kind of care they would need.''
AGING COHORT. As the population ages, more adults are finding themselves in the unenviable position of becoming parents to their parents. In cases where constant assistance is needed, the choice for many people--if they can manage it financially--is to provide care in the home. Indeed, 5.6 million seniors receive home-health-care services today, five times as many as those in nursing homes. That number is likely to double over the next 30 years as baby boomers reach their golden years en masse.
The real jaw-dropper is that home health care can cost just as much as a private facility. And little of that expense, if any, is covered by Medicare, the federal government's endangered healthinsurance program for seniors and some disabled individuals. Total costs for full-time, live-in health care average about $50,000 annually, according to Alfred Clapp, president of Financial Strategies & Services Corp., a New York City financial-planning company specializing in long-term care.
With cost and need rising in tandem, the sad reality is that home health care isn't affordable for average middle-class families unless they have planned ahead. With premiums that can top $1,200 a year between ages 50 and 60, long-term-care insurance policies that cover nursing-home or home-care costs are pricey--but that's nothing compared with how much the uninsured can end up paying out-of-pocket. ``Increasingly, long-term-care insurance will be mandatory for people who can afford it,'' says Clapp, who advises checking out employer-sponsored group plans, many of which allow workers to extend coverage to their spouse and parents.
Even if financial resources are available, few people think about the particulars of arranging care for sick or infirm family members until they have to. Then, when disaster strikes, they don't have the foggiest idea where to turn. Two good places to start are with licensed home-health-care agencies and geriatric-care managers. An agency--which should always be bonded and insured--supplies the personnel and handles the payroll, taxes, and insurance costs. By contrast, a geriatric-care manager is an independent agent who can oversee all aspects of the case, from hiring and monitoring aides to accompanying the senior to the doctor's office. Currently, such professionals are not licensed, but by midsummer, the National Academy of Certified Care Managers will offer a certification exam. In the meantime, look for a licensed nurse, psychologist, or social worker.
SAFE BETS. Using an agency or care manager costs more than if you hire help through the classified ads, but they're generally the safest and most comprehensive source of qualified assistance. The first thing they do is assess the situation based on the physical, social, and financial needs of the client and family. At any point, if at-home care is no longer appropriate, the care manager will also help you with nursing-home placement. Both agencies and care managers will investigate local services, such as adult day-care and entitlement programs such as Medicare, and handle the application process. ``Many times when people first come to us, they are paying privately for services they would have qualified for under state or county programs,'' says Wendy Biermann Leeds, owner of Elder Care Connections in Verona, N.J.
Then the geriatric-care manager or, in the case of an agency, a licensed nurse, screens potential caregivers, leaving the ultimate hiring decision to the client and family. Many seniors need a home-health-care aide to help with ``custodial'' activities such as bathing, dressing, and eating. Aides are trained in how to carefully move fragile elderly patients, bathe them, and check their blood pressure, says Deborah Brash, vice-president for clinical development at Olsten Kimberly QualityCare, in Melville, N.Y.
Since Medicare covers only skilled care, such as physical therapy or nursing, most people without long-term-care insurance will end up paying for custodial care themselves. This expense quickly adds up, so it's a good idea to comparison shop. For a list of providers, check the Yellow Pages under Home Health Services or contact the National Association for Home Care in Washington (table). Agencies charge $15 to $20 an hour for the minimum level of custodial care. An elderly diabetic, for example, might need 20 hours a week, so the weekly cost would be about $400, according to Olsten Kimberly. Skilled care may run as high as $100 an hour.
TRIAL AND ERROR. When you hire a geriatric-care manager, there's an extra salary to pay. But it can be money well spent if elderly parents live far away or have illnesses that require special training and sensitivity. An initial assessment runs $200 to $500, says the National Association of Professional Geriatric Care Managers. Then, supervising the case on an ongoing basis will run $40 to $150 an hour.
The total cost varies according to the level of service you need. You can have the care manager make regular visits to the home, handle bill paying, and act as a liaison between the family and other professionals, such as doctors and lawyers. Make sure you specify in writing the exact services to be provided.
The least costly source of care is a licensed registry--essentially a temp agency for home-health-care workers--which charges $10 to $14 per hour plus a registration fee of $200 to $1,000. It's a trial-and-error approach: The registry sends referrals until you find one that works out. You save money because you do all the legwork: reference checks, payroll, and supervision. To ease the burden, you can retain a record-keeping company such as Paychex (800 828-4411), which will issue checks and handle the reporting and W-2 forms for a weekly fee of $9. Unlike an agency or care manager, a registry doesn't automatically provide backup or emergency care--unless you ask for it in writing. You can locate a registry through elder-care specialists or in the Yellow Pages under nursing.
GET ADVICE. No matter which route you choose, unless the elderly person is covered by a good long-term-care insurance policy (BW--Dec. 4, 1995), paying for home health care can be a big problem. One strategy is to borrow against the cash value of the aged parent's life insurance policy. The loan plus interest is deducted from the death benefit when the insured dies. Seniors can also take out a reverse mortgage to tap the equity in their house. Or, assuming the adult child is in a high tax bracket, it may make more sense for that person to take a tax-deductible loan against his or her own home equity.
The uniqueness of each situation means there is no one solution. As difficult as it is to discuss such matters with your parents while they're still healthy, you just have to bite the bullet. Then, before transferring assets or taking a second mortgage, consult an expert. ``Too often people are a few miles down the wrong road before they get advice, and the road back is usually uphill,'' says Gary Mazart, an estate-tax attorney with Hannoch Weisman in Roseland, N.J. Thinking ahead can help you know where to turn before you go astray.
EDITED BY AMY DUNKIN By Kerry Capell
Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.