Many people turn to long-term care (LTC) for a disability or chronic health condition. Sometimes the need for this happens suddenly after a medical emergency, like a stroke, or progressively with age. Either way, facilities like continuing care retirement communities (CCRC) are designed for these groups. Approximately 70% of adults who reach age 65 will need long-term service and support, according to the U.S. Department of Health and Human Services (HHS). Of that group, 48% will receive paid care. Custodial care is one form of long-term care available to seniors who need help in their day-to-day lives. Here’s how they work.
Consider working with a financial advisor as you plan for custodial care.
What Is Custodial Care?
Custodial care facilities (CCF) fit under the umbrella of long-term care; however, they don’t provide a high level of medical care. You might know them better as nursing homes or rest homes.
Staff monitor their resident’s wellbeing while there. That includes their physical and emotional health. But they do not offer intensive medical care, making them better suited for individuals who do not need constant supervision. They still offer vital service, though, with one of their most important features being the ways they enrich residents’ lives through recreational, educational and social outlets.
It’s also possible to hire a caregiver at home who provides similar services. They help with daily activities and supports the senior when needed. They may run errands or perform some housekeeping as well.
That’s particularly important for older individuals, who are at a higher risk for social isolation and loneliness.
What Are Custodial Care Services?
Depending on any physical, medical, or mental conditions you may have, you may need a variety of assistance in your senior years or after a medical emergency. Custodial care primarily focuses on helping with activities of daily living, or ADL. As you age, it becomes harder to do these daily behaviors independently. So, a caregiver may help with self-care, such as getting dressed, eating, bathing, mobility, using the lavatory and more.
Caregivers in custodial care do not necessarily need medical or nursing training, though. They can come from an assisted living aide background, or have at-home caregiver experience. However, if a resident needs more consistent care or supervision, it should be under trained medical professionals, like those in skilled nursing care.
So, if a senior needs physical therapy after surgery or has a degenerative disease, they require appropriate care from licensed medical personnel – not just a caregiver. This level of attention usually costs more compared to custodial care.
How Much Does Custodial Care Cost?
Custodial care facilities are generally less expensive than other long-term care options, such as skilled nursing facilities (SNFs) or intermediate care facilities (ICFs). Thus, certain factors can influence cost, such as:
- The length of residency
- Hiring a caregiver independently or through an agency
- Mental and physical conditions of the beneficiary
- Location
Genworth, a financial services company and insurance provider, makes cost estimates available through its Cost of Care Survey tool. Annual estimates for the 2021 year include:
- Homemaker Services: $55,381
- Home Health Aide: $56,559
- Adult Day Health Care: $19,817
- Assisted Living Facility: $53,148
- Semi-Private Room in a Nursing Home: $95,867
- Private Room in a Nursing Home: $109,026
According to Genworth, these rates have been on the rise and will keep climbing. A shortage of workers, increased costs to conduct business, higher minimum wages and higher recruiting and retainer costs all contribute to the growth. While the COVID-19 pandemic exacerbated these factors, they were already rising. So, it’s vital to plan out finances ahead of time.
How to Choose the Level of Custodial Care
There’s a wide range of available care in nursing facilities. Ill individuals may need 24-hour care, i.e., skilled nursing care, or only need mild monitoring. Some facilities provide a single level of care, but there are others that cater to residents with varying levels of needs. If you need intensive supervision and medical care, either due to illness, injury, or a medical condition, then a skilled nursing facility is your best bet.
By contrast, if you require long-term room and board with mild assistance or health monitoring, you’re better off with a nursing home or similar facility. If you believe you may need more intense care in the future, though, then a CCFC is worth consideration. Alternatively, a facility that supports a transition of care may be best.
The goal is to find a facility that provides the right atmosphere, quality of care and type of care. Some seniors might have conditions that require specialized medical attention as well. For example, individuals with dementia need memory care. So, look for specific offerings that match your present and future medical circumstances.
How to Pay for Custodial Care
Professionals recommend long-term care insurance as the best way to cover the costs of custodial care. These policies usually use ADLs to determine eligibility for benefits. So, they take a look at what the senior can independently manage. If the individual cannot perform at least two out of the six daily activities the insurer considers, then they trigger benefits. Alternatively, cognitive impairment, such as Alzheimer’s, can also start up benefits.
It’s important to look at your insurance options for custodial care because Medicare and Medicaid generally won’t cover it. Medicare is designed to pay for necessary medical care, which custodial care does not provide. The only situation where it may is if the custodial care is short-term and combined with skilled medical care. Likewise, Medicaid is also limited to healthcare costs, although only for low-income individuals. You can potentially use Medicaid, but you have to meet strict requirements. For example, the nursing home must be a licensed and certified Medicaid Nursing Facility (NF).
Insurance also encourages pre-planning, which is vital. While custodial care is less expensive than some other long-term care options, it is still a hefty cost for some. You can’t expect family to cover the expense without setting aside a fund independently and potentially purchasing insurance. After all, family might not stay in the same or have the finances themselves.
Certain, qualifying individuals may be able to use their traditional health insurance plan benefits for an informal caregiver, though. Although, many policies only cover skilled nursing care. Also, veterans and SSI disability recipients may have potential benefits that could apply. However, it depends on the individual and the type of care you receive.
The Takeaway
Custodial care is a step in aging many will face. It’s not as intense as other levels of care, but it still provides a vital service to seniors. Through it, they’re supported and can maintain their independence to some degree. Most senior care comes at a high cost, though. For those who believe they may need this for themselves or a family member, planning is crucial.
Investment Tips
- Financial advisors can help you organize your assets and money based on your long-term care plans. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor, get started now.
- Custodial care might be right for you or your loved one. But it’s important to consider your financial funding options. Long-term care insurance is the most recommended method, helping you tap into benefits when you need them.
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