Financial Literacy - Families and Finance
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How to get good care for your aging parent

Personal care homes

Sometimes called board and care homes, personal care homes are appropriate for residents who can live in small, supervised environments. They are a less expensive alternative to other living arrangements for seniors. Many personal care homes welcome clients with dementia.

Look for homes that are specially constructed to be wheelchair-friendly. Handrails should be evident in the shower areas, which should be clean.

On the upside, long-term care insurance or Medicaid may pay the monthly fees, which can range from $1,500 to $3,000 per month, depending on the location and the level of services required. Medical services are usually not provided.

Assisted-living facility

These facilities allow residents as much independence in their daily activities as they can handle. They are an alternative for residents who can no longer manage on their own, but don't require constant medical care.

Your parent can opt for space as small as a studio or as large as a fully equipped one-bedroom apartment.

The facilities provide a wide range of social and housekeeping services and can house as many as 300 residents, but the more common size is between 25 and 120 residents.

On the upside, assisted-living facilities offer a variety of services, but the price is steep. The national average in 2008 was $3,008 per month, according to a survey by Genworth Financial.

That's over $36,000 annually. In high-priced markets like New York, that price can skyrocket to more than $75,000 annually, according to Silverberg.

Medicare will not pay for general assisted-living fees, so your only options are long-term care insurance, private funds or Medicaid if your parent qualifies.

Nursing home/skilled nursing facility

A nursing home or skilled nursing facility typically provides 24-hour medical care for people who can no longer care for themselves due to physical, mental or emotional conditions.

Licensed health care providers are on premises 24 hours a day. Therapy and personal care services are also available.

On the upside, if your parent has some type of dementia such as Alzheimer's or is physically incapacitated, you can rest easy knowing that they won't wander off or skip meals.

On the downside, nursing homes are pricey, averaging $76,460 per year, according to a 2008 survey by Genworth Financial.

Contrary to what most people believe, it's tough to negotiate fees at nursing homes. And if you don't have insurance there's not much you can do.

"You can look to the Veteran Administration if the parent was in the military, but that has its limitations," says Drew Tignanelli, CPA, CFP and president of The Financial Consulate.

"Family members are always an option (to pay for care), but they're not usually a good option," he says. "There's not a lot you can do if you don't have the money and can't afford it. You're going to have to struggle through it."

Private insurance coverage varies. Medicare will pay for skilled nursing home care for a limited time following a qualified hospitalization.

Medicare pays 100 percent of facility fees for the first 20 days. From day 21 to day 100, your parent is responsible for a daily co-insurance amount which is adjusted annually. For 2009, the coinsurance is $133.50 per day.

After the 100th day, you'll need to dip into savings or tap into a long-term insurance policy, if your parent has one. Medicaid may pay for skilled nursing services for low-income patients with very few assets.

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