Tag: government programs

The Economic Pitfalls of Caregiving

Be Considerate and Smart Protecting Your Own Money

by Jean Chatzky, January 2018

A caregiver is responsible for attending to the specific requirements of, in this discussion, an elderly person. Often primary caregiving becomes the responsibility of one or more family members. Their responsibilities can range from companionship to a host of activities in maintaining the health and well-being of a love one. Examples are preparing a medical plan, housekeeping, accessing medical services and monitoring medications, as well as assisting with other life basics. Though daunting, it’s a necessary task faced by many families. In her article, Jean Chatzky addresses several financial aspects in caregiving.

When you fly as much as I do, you can recite the safety briefing by heart, especially the part about putting on your own oxygen mask before you help anyone else. The same sort of warning should be given to the 43 million American adults who are family or friend caregivers, particularly when it comes to their own finances.

According to a 2011 study, the average lifetime cost to caregivers is $304,000 in lost wages, pensions and Social Security. That doesn’t count the $7,000 in cash that 7 out of 10 caregivers pay each year (on average) from their own pockets to cover other costs. “How do you give up that much and still retire yourself?” asks Age Wave CEO Ken Dychtwald. If caregiving looms in your future — and it likely does if you’re a daughter, an only child or the one (if you are, you know what I mean) — take time now to protect your financial life.


Step 1: Calculate the gap

The average cost of a full-time home health aide is $49,000 a year; a semiprivate room in a nursing home: $86,000. Think you and your parents won’t need long-term care? So, do 63 percent of people over 50, notes Age Wave. Yet 70 percent will, a clear disconnect. So, ask your parents about the size of their nest egg, how quickly they’re spending it, whether they have long-term care insurance and how much equity they have in their home. If they won’t discuss this, a compassionate financial adviser may be able to bring you together. Compare your parents’ assets against their projected expenses and you have your gap.


Step 2: Fill the gap without going broke 

Look for free resources. Go to benefitscheckup.org, set up by the National Council on Aging, to learn about federal, state and private benefits programs that apply to your charge.

Make a budget for what you can contribute, physically and in dollars. (Shockingly, 50 percent of caregivers don’t track what they’re spending.) Then ask your siblings what they can pitch in; just because you’re delivering the care doesn’t mean you have to foot the entire bill. Every dollar you don’t spend can be put away for the future, so you don’t perpetuate this cycle with your kids.


Step 3: If a gap remains, consider Medicaid

An unmarried parent may need to spend down assets to qualify (nursing home residents can have only $2,000 in countable assets in most states). If your parent is married, it’s more complicated; in general, the healthy spouse can keep one-half of assets, up to $120,900 (not including the house). Call an elder-law attorney for help. You can locate a lawyer through elderlawanswers.com or naela.org, the site of the National Academy of Elder Law Attorneys.


Step 4: Regardless of the gap, look into getting paid

Two government programs — one from Veterans Affairs, the other from Medicaid — offer additional financial support that can be used to pay family caregivers. If your parent is a veteran (or spouse of one) who served at least 90 days of active duty with at least one day during a period of war, check out what the VA has to offer. Be forewarned: Waiting lists for some Medicaid programs are so long, you might never see any money.

Have your parent pay you if assets are available. But first talk to an elder-law attorney about drawing up a contract, notes Miles P. Hurley, a certified elder-law attorney in Atlanta. This document, he says, should answer questions such as “Is this child going to quit a job to provide the care?” and “How many hours a day is the child supposed to be providing the care?” It’s crucial to do this in a way that doesn’t jeopardize Medicaid eligibility, which is why you want to involve a lawyer, preferably from the state where your parent lives.


Step 5: Protect your own earning ability

If you’re midcareer, it’s very challenging to leave a job for caregiving, then step back into the workforce at the same salary, explains C. Grace Whiting, chief operating officer of the National Alliance for Caregiving. “Sometimes physically caring for a loved one may seem to be your only option,” she acknowledges, but it may make more sense to continue to work while supporting someone else who provides care. It can also be a good idea to ask for more flexibility from your employer. Given that it costs six to nine months’ salary to replace a management-level employee, it’s not surprising that many employers believe it’s less expensive to make an accommodation. Adds Lisa Winstel, COO at the Caregiver Action Network: “Saying to your employer ‘I’m a family caregiver’ is not as taboo as it was five or 10 years ago.”


7 Government Programs You Can Access For Your Elderly Parents

When my wife’s and my elderly parents reached the point of needing extended medical guidance and financial assistance as they grew older and less able to care for themselves, we struggled through a quagmire of resources to find proper the pathways to assistance. At the time, it resulted in expensive and often agonizing courses of events. According to the Georgia’s Governor’s Office of Planning, Georgia has one of the nation’s fastest growing 85+ age populations. It is expected to increase 306% over the next three decades. The 60+ population is expected to grow by 65% during the next 13 years. We wish we’d had the benefit of Marlo Sollitto’s advice to point the way. Her article below, published in Aging Care, clearly ambles us through the confusing process of financial and medical caregiving assistance for our seniors.

Caregiving for an aging parent may stretch your budget as well as your endurance. That is, if you aren’t aware of scores of federal, state, and even local government programs that can help you make ends meet. Access to assistance is as close as your computer, and, in most cases, you can apply online. Start by visiting two sites:

www.benefites.gov : Gather all the information you can relating your elderly parent’s health, disability, income, assets, military service, education level and more. Visit this site and answer every question as accurately as you can. After submitting your answers, the site will respond with a list of government programs, supplements and services, including details and eligibility information.

www.benefitscheckup.org: This non-profit site run by the National Council on Aging will ask many of the same questions as the site above, but may report additional programs, details and contacts that may fit your situation.


Here is a guide to the top 7 programs everyone who is caring for an aging parent should know about.

1. Medicare

There is more to Medicare than just the Part A hospital and Part B medical insurance coverage. If your aging parent is 65 or older and collecting Social Security, their insurance premiums are deducted from monthly benefits. Part D prescription drug coverage is subsidized by Medicare through payments to private company insurers who then fund an average of 90 percent of the cost of prescription drugs. If your parent is considered low income and receiving only Social Security, Medicare may subsidize all but about $10 of the monthly premiums. This option may provide substantial cost savings for your parent.

 2. Social Security

If your parent’s Social Security benefits were earned based on lower-paying jobs, and if the benefits are their only source of income, there may be a larger monthly benefit available by applying for the Supplemental Security Income (SSI) program. The program may be operated federally or in conjunction with your state government. The welfare-based Medicaid program is also administered through the Social Security Administration, though the operation may be directed by your state government.

3. Administration on Aging (AoA)

The AoA administers many national programs and services for elders, including health insurance counseling, legal assistance, protection from elder abuse and help with long-term care. The navigation bar on the home page has a link to Help and Resources, your starting point.

4. Department of Veterans Affairs (VA)

If your aging parent is a military veteran and has a service-related disability, you may be able to apply for an increase in benefits, particularly if the disability has worsened over time. If he or she needs continuing medical care because of the disability, an application for medical benefits, hospitalization and prescription drugs may be submitted. There are several types and levels of VA compensation and pension programs. The VA has been slow in processing claims the past few years, but there is continuing pressure by Congress and the Administration to speed up its service.


The Health Insurance Portability and Accountability Act of 1966 provides your elderly parent privacy of his or her medical records. It is a regulation and restriction program on health care providers. The protection should be of concern to you and other family members because, unless your parent signs a form designating each of you as approved to discuss your medical concerns with the physician, he or she cannot do such, even if you prove your family connection. Better sooner than later, access the HIPAA website for the information and forms, or secure the forms from a physician, and file copies with every health care professional involved in your parent’s care.

6. United States Department of Justice

If your parent has a disability, particularly with physical movement, learn about the Americans with Disabilities Act administered by the U.S. Department of Justice. Its ADA website offers briefings and cost-free publications on the regulations to grant universal access to the disabled.

7. Food and Drug Administration

Your aging parent is probably taking a few different prescription drugs, perhaps prescribed by different doctors. As caregiver, you should be aware of every one of the drugs, know its mission in the body and, particularly the side effects and conflicts with other medications. You want to watch for a danger known as polypharmacy. The federal Food and Drug Administration offers a giant database on every drug approved by the agency, listing active ingredients, purpose of the medication, dosing recommendations and the side effects and conflicts.