When care is needed for an elderly or disabled loved one, a difficult decision is whether to provide that care yourself or to hire someone to do it, or perhaps a combination of both. Many factors come into play, but one of the most important is finances. If you hire someone, does the person being cared for have a benefit such as long-term care insurance or is he or she eligible for some form of government benefit? These difficult decisions will have to be made by the caregiver. Recent statistics show that the number of American adults who have become caregivers for an older family member has increased from 30 percent in 2010 to close to 40 percent today.
Personal Cost of Caregiver
So how is the role of caregiver affecting each of these adults? Two of the most common effects are poor health from the stress of being a caregiver and poor financial health. The health issues are probably a given when you consider the physical and emotional challenges of providing services that even professional caregivers find stressful. But the financial effects can have an even longer-lasting effect. While there are some laws that are designed to protect caregivers who are trying to assist a family member such as the Family and Medical Leave Act, they don’t necessarily apply to all employers. Most of these Acts require the employer to have a certain number of employees so a smaller business may not offer that benefit to its workers. And, an employee will usually have to work for the employer for a minimum period of time before taking advantage of the benefits provided by the Acts, and may only take a limited number of days each year.
Statistics show that these issues apply mostly to women. But even more surprising is that the women who are in the role of caregiver also has a job, even while spending an average of 20 hours a week forgive years as a caregiver. If the caregiver eventually leaves her job, statistics from a 2011 study show that she will lose about $325,000 over that period, as well as benefits from her employer. And with the average age of these women being 49 years old, the chances of reentering the workforce at the same level may be slim. In addition to losing income, the caregiver’s family may end up footing the bill for many of the expenses required to care for the loved one.
Without previous planning for these expenses, whether through long-term care insurance, an arrangement through a trust, or other technique that may be proposed by an estate planning or elder care attorney, most of the financial resources of the loved one may have to be spent before being eligible for help like Medicaid. And if there is a spouse of the loved one, that leaves little for him or her to have for living expenses.
When considering options like Medicare, Medicaid and long-term care insurance, it is important to be aware of what these options cover and, more importantly, what they don’t. For example, Medicare generally does not cover in-home care. Medicaid does, but only in limited circumstances involving very low income or other financial resources. Most long-term care policies do cover in-hone care, but choosing that option can be more expensive than policies that do not.
While caring for our aged loved ones is part of our culture and should be, careful planning could eliminate many of the issues that face the caregiver. Consulting an attorney with experience in estate planning or elder law may be beneficial in helping identify possible solutions, preferably before they are needed. But even after the need arises, solutions may still be available.