Long-term care is generally defined as a range of supportive services needed to meet an individual’s personal care needs over an extended period of time. Often, long-term care is not medical care; instead, it is help with everyday personal tasks, sometimes referred to as activities of daily living (ADLs) and instrumental activities of daily living (IADLs), although it may certainly also include skilled nursing care.
ADLs can include things such as bathing, using the toilet, dressing, eating, and transferring a person to/from the bed or a chair. Others may need long-term help with IADLs, which may include housework, taking medication, paying bills, shopping, and preparing meals.
According to estimates by the U.S. Department of Health and Human Services and the Administration on Aging, 7 out of 10 people over age 65 will require long-term care in their lifetime, and 1 in 5 will need that level of care for more than 5 years.
This statistic is one of the key reasons that some people opt to move to a continuing care retirement community (CCRC, or life plan community) while they are still healthy and independent. As a CCRC resident, they have peace of mind knowing that they have ready access to a full continuum of care services—from assistance with ADLs to full-time skilled nursing care—if and when they need them.
Confronting care decisions
But the reality is that, whether by choice or financial necessity, the majority of seniors do not live in a senior living community that offers care services, such as a CCRC. So, when a situation arises where an elderly loved one requires assistance with ADLs or IADLs, families sometimes must make difficult decisions about how and where the person will receive the support they need.
Some families choose to take on these caregiver responsibilities themselves—in the senior’s home or in their own—either because paying for supportive services is cost-prohibitive for them or because they feel it is their duty to care for their family member. While this may seem like the most economical solution, as I’ve written about many times, the cost to the caregiver can be much greater than people often realize, not only in lost wages and job benefits but also in physical and mental stress.
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Other families opt to move their loved one into an assisted living community, where the senior can be provided with the specific types of help they need, at the time they need it. At a glance, this may seem like a fairly pricey option, however, with the national average for a private one-bedroom unit running around $4,000 per month (which includes room, food, and care services), according to Genworth’s 2018 research. The average cost of care in a nursing home is almost double this amount, on average.
Still others decide to hire a caregiver to provide the long-term care services their loved one needs within their private residence. According to Genworth, the average cost for 44 hours per week (around 6 hours per day) of home care services is $4,004 per month—roughly the same price as living in an assisted living unit, but this would be on top of housing and food expenses, and leaves the senior on their own for a good portion of each day.
For people who choose the home care route, they must decide whether to hire an independent caregiver on their own or work through a home care agency to find a caregiver. But what is the difference between these two long-term care options? Is one better than the other?
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Independent or private caregivers are people who are hired and employed directly by the senior or their loved ones. In addition to providing help with ADLs or IADLs, some independent caregivers are also trained to provide some medical care such as wound care, injections, and monitoring vital signs, however this is less common and would come at a higher hourly rate.
The biggest benefit of using an independent caregiver is the cost—averaging around $15 per hour—which can be between 20 and 30 percent lower than caregivers hired via an intermediary home care agency.
The drawback of going the independent caregiver route is that the senior’s family must take on the responsibilities of being an employer, including managing things like background checks and any necessary licensing verification, liability insurance, payroll, and applicable taxes. There are, however, third-party payroll companies that can manage the paychecks and taxes aspect for you at a fairly reasonable cost. It’s also important to consider how challenging it can be to find a high-quality caregiver, and then replace the caregiver if he/she moves or changes jobs, which happens often. And since the vast majority of elder abuse takes place in someone’s home it is vitally important to run all appropriate background checks.
Home care agency caregivers
Home care agencies are licensed businesses that employ a team of caregivers. The agency then contracts with families to send caregivers to their loved one’s home to provide the necessary long-term care services. Some agency-based caregivers may be credentialed nurses or nursing assistants who can offer medical care. Others provide standard assistance with ADLS or IADLs.
While costs can vary significantly from place to place, home care agencies are more expensive than independent caregivers across the board. Nationally, the average hourly rate for home care through a home care agency is $20+ per hour—again, approximately 20 to 30 percent more than an independent caregiver.
>> Related: Crunch the Numbers: Staying in Your Home vs. Moving to a CCRC
Other factors to consider
In addition to the price difference between an independent caregiver and one hired through a home care agency, there may be other compelling reasons to choose one over the other.
For example, if your loved one primarily needs in-home medical care, it may behoove you to opt for a caregiver from an agency, which will ensure the person is properly trained and licensed to perform the necessary healthcare tasks.
On the other hand, if your loved one mainly needs companionship and/or a little help with ADLs or IADLs, an independent caregiver may be the best choice. Perhaps the senior can no longer drive and just needs help getting to doctor’s appointments, the library, or the grocery store. Because of concerns about liability, some agencies will not permit their caregivers to transport seniors. In this instance, an independent caregiver would be the better option.
One thing you probably do not need to consider in your decision between an independent and agency-based caregiver is Medicare. Medicare will not cover any non-medical home care services, regardless of who provides those services. (Note: If home healthcare services, such as skilled nursing care or therapy, are deemed medically necessary, Medicare will cover a portion of the cost for a period of time. Learn more at medicare.gov.)
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Accounting for care quality
Another key consideration is the quality of care that your loved one will receive. On this front, it really comes down to the individual caregiver. Regardless of whether they are independent or agency-based, some caregivers are wonderful, and others leave something to be desired.
The key difference is that if you work with an agency and you are not happy with the caregiver, you can simply request a different one. For those who discover they are unhappy with their independent caregiver, they must go through the entire search, hiring, and training process again, which can be time-consuming and frustrating.
Making the right choice
Deciding on the best option for getting your loved one the care they need can be difficult; there are a lot of factors to take into account. When choosing between providing caregiving services yourself, hiring a caregiver (either independent or agency-based) to provide services in the home, or moving the senior to an assisted living facility, here are a few suggestions and considerations:
- Make a pros and cons list for each care option (and there are indeed pros and cons to each) including variables like cost, quality, and the health and happiness of the senior and their family. Don’t forget to factor in lost wages if you plan to take on the caregiver role yourself.
- Take your loved one to visit nearby assisted living communities to see if there is one that is a good fit. Be sure to talk to current residents, check for reviews on sites like Yelp or the Better Business Bureau (BBB), and consult your local long-term care ombudsman program for any infractions.
- Talk with friends who have been in a similar situation with an elderly loved one to learn about their experiences and advice. They may be able to offer you helpful referrals or steer you away from a provider.
- Do some online research to find home care agencies in your area. In addition to checking Yelp or the BBB, call and ask the agency if you can speak with a few recent clients to hear about their first-hand experiences.
- Also search online for independent caregivers in your area to see who is available. You will want to be sure to ask for recommendations from their previous clients as well.
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