How to Stay out of a Nursing Home and Save Money

By S.Z. Berg

NEW YORK ( MainStreet) -- The cost of nursing home care continues to rise. According to Genworth's 2013 Cost of Care Survey of 15,300 long-term care providers, which included nursing homes, adult day care and assisted living facilities, as well as home care providers, the cost of nursing homes rose 3.3% this year compared with the cost in 2012, with the national daily median rate for a semi-private room coming in at $207. The rate for a private room at a nursing home was $230, an increase of 3.6% over 2012, totaling $83,950 a year. In 2008, a private room cost $67,525 a year.

So how do you take care of yourself in old age without hemorrhaging money?

"There are a great many services that seniors can utilize to help them stay at home and avoid the costs associated with assisted living," says Christopher J. DesBarres, co-owner of Help Unlimited, a daily money management service that helps senior citizens pay their bills and keep track of their money.

In addition to money managers, which you can find at the American Association of Daily Money Managers website, DesBarres points out that there are grocery shopping services, such as Top Banana in Washington, DC, and Peapod in the Mid-Atlantic and sections of the Northeast and Midwest.

Other grocery delivery services, such as Wal-Mart To Go and AmazonFresh, are popping up in test markets.

DesBarres also notes that there is aging-in-place remodeling, such as installing "comfort height" toilets and handrails, that can be done to keep the elderly at home.

"These renovations can also dramatically reduce seniors' fall risk," he points out.

Another useful "resource that is starting to spread across the country is the 'senior village' concept," DesBarres says. "These are civic associations for very narrow geographic areas that focus on helping seniors remain in their homes," he explains. "Villages link residents, community resources, companies and volunteers to provide the services and support that seniors need in what the industry calls a Naturally-Occurring Retirement Community or NORC ," he says. You can find a list of these communities at the Village to Village Network's website.

In addition, geriatric care managers, which are nurses or social workers, can provide independent assessments and referrals for services the elderly may need to stay in their home.

"They can often help seniors save money by suggesting companion care instead of home nursing care," DesBarres says.

You can find companion care for the elderly at various agencies. While it is less expensive to hire direct, you'll be exposed to lawsuits.

If the caretaker falls on your property, she can sue you, says Ann-Margaret Carrozza, a New York-based estate and elder law attorney. However, if you have employed her legally, she is only entitled to workers' compensation. Regardless, Carrozza advises getting an umbrella insurance policy.

There does appear to be a middle road. There's now a hybrid firm, Hallmark Homecare, which has a network of screened, trained, credentialed, and insured direct-hire caregivers. For a fee, the company facilitates the direct hire, which includes liability insurance, workers' comp, and other legal requirements. The family typically pays the caregiver $10 to $14 per hour. This is more than caregivers are paid at traditional agencies, where the family would be paying $18 to $25 or more per hour and the caretaker would be earning anywhere from minimum wage to up to $10 per hour, says Steve Everhart, founder and president of Hallmark Homecare.

Many elderly deplete their assets to qualify for Medicaid to pay for their nursing home care. However, in New York State, residents can qualify for Medicaid to pay for home care for help with feeding, bathing, toileting, and dressing without a five year look-back period, says Carrozza.

Other states also have a federal waiver for in-home services.

In order to qualify if you own a home or have substantial liquid assets, Carrozza suggests placing them in an irrevocable trust with a gatekeeper with access. She notes that you can hire or fire the gatekeeper. Using an irrevocable trust will also save your children from paying capital gains on your home, she says.

Low-income veterans or their spouses may qualify for the Housebound, for which you can employ a family member, or Aid and Attendant Benefit for in-home care. They must have less than $80,000 in assets, excluding their home, according to the Veterans Administration.

The National Council on Aging offers an interactive questionnaire called BenefitsCheckUp on its website to see which in-home services people ages 55 and older may qualify for in their area.

"Finally, I would say never underestimate the importance of socialization for seniors," DesBarres says. "There are a growing number of organizations that help seniors specifically find meaningful ways to volunteer." He recommends RSVP, the Retired and Senior Volunteer Program.

--Written by S.Z. Berg, Author of College on the Cheap