While the retirement community industry continues to grow, a majority of older adults still say they prefer to stay in their own homes–at least as long as possible. While this decision to stay in the existing house may seem like the most economical option on the surface, cost-effectiveness can quickly diminish if home care services are ever required.

I am fortunate to get to have insightful first-hand conversations with many seniors as I travel around the country presenting to groups of CCRC prospects. During these discussions, I learn what types of issues are top-of-mind for seniors, and I will sometimes notice a recurring theme or a question that I’m asked again and again. One of the things that I’ve noticed is that there isn’t always a clear understanding when it comes to the difference between a “home healthcare provider” and a “home care provider.” Of course, it’s easy to understand why given that these two terms are close to identical. Yet, this is an important distinction to make because the former may be covered in part by Medicare (for a limited time), but the latter will not because it doesn’t include medical care.

Home healthcare providers

Home healthcare providers, also known as home health aides, should have some level of formal medical training and will have passed a competency test. They may have credentials like certified nursing assistant (CNA), licensed practical nurse (LPN), or physical or occupational therapist (PT or OT).

Home healthcare encompasses a range of services that can be performed in your home including things like wound care, patient/caregiver education, IVs and injections, or monitoring of a health condition. The objective of home healthcare is to treat an illness or injury, helping you get better so that you can return to your independent lifestyle, or at least regain as much self-sufficiency as possible. Such care is often necessary following a hospital stay.

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If the service provider is Medicare-certified, then Medicare Part A (hospital insurance) and/or Medicare Part B (medical insurance) cover part-time or “intermittent” skilled nursing care (for example, up to three 90-minute visits per week for a prescribed period of time), as well as physical therapy, speech-language pathology, or occupational therapy services. A doctor must certify that you are homebound and need this type of service (and he or she must periodically review your care plan), and a Medicare-certified home healthcare agency must coordinate the care. (Note: If you require more than intermittent skilled nursing care, you will not be eligible for this Medicare benefit.)

Home care providers

For people who don’t necessarily need in-home healthcare services, but rather, need assistance with things like household chores or personal care, a home care provider (also called a personal care aide or a home care aide) may be the solution. This is a role that does not require any formal certification. Home care providers may be employed directly by a senior or their family, though many are employed by agencies and may be supervised by a licensed nurse or social worker.

Home care providers can offer a wide variety of services to help seniors who want to age in place. They may assist with activities of daily living (ADLs) like bathing, dressing, medication reminders, and meal preparation. They may help with housekeeping responsibilities, shopping and errands, while also offering companionship.

And although these types of services are invaluable to many seniors, it is important to know that Medicare does not cover the expense associated with home care providers. However, some long-term care insurance policies may cover a portion of this type of assistance. Additionally, for those who meet the financial qualification, Medicaid will typically cover these services as long as they are received by a Medicaid-certified provider.

Visit www.medicare.gov to learn more about what is and is not covered by Medicare.

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Care costs that can really add up

Between 50 and 70 percent of people over the age of 65 will eventually need significant help with their day-to-day tasks and overall care. But when you consider that you may need home care services as well as home healthcare services, the hours may add up to more than you think, particularly as your needs progress.

The average monthly cost for 44 hours of in-home care was around $3,800 in 2016. By comparison, the national average cost of an assisted living facility is actually less at $3,628 per month (though this cost could be much higher depending on the level of care you need, quality of the provider, and the region of the country). 24-hour skilled nursing care in a facility–the highest form of care–costs $7,000 to $8,000 per month on average. Again, the cost can be significantly higher in some cases. Skilled care typically means 24-hour care, so no matter whether it is provided in a facility or in the senior’s home, the cost is substantial.

Should you decide to stay in your home, other paid services such as adult daycare or respite care, bill paying and recordkeeping, and other assistive equipment needs can easily add up to another $500 to $1,000 per month, depending on which services you need or choose.

As you can see, it is important to understand what services are and are not going to be covered under Medicare or your long-term care insurance policy so you can plan your finances accordingly. Aging in place may not be as cost-effective as you once imagined. And doing this math may just be the impetus for considering other options, such as a CCRC or other senior living community.

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