Do You Have a Clear Understanding of Caregiving Costs?

By admin July 11, 2022 Finance, Financial Planning, Insurance, Long Term Care

Many Americans underestimate the impact that caring for a loved one can have on their lives, marriage, work, and finances. In a column by Michelle Singletary, a Washington Post columnist, an “AARP study found that three-quarters of family caregivers regularly spend their own savings on caregiving expenses—which averages to 26% of their income.”¹

President Biden had hoped for a tax credit for caregivers in his budget plan, but so far it has not made it past Congress’s fierce negotiations. If you’re currently providing care for a loved one or plan to do so, being aware of all of the financial realities can help save you time and money.

Here are three common misconceptions surrounding the costs of caregiving:

All in-home assistance is covered by insurance. It’s easy to assume that health insurance or Medicare will pay for care costs. However, these coverages don’t cover non-medical care. Home care that’s considered medically necessary may be covered by Medicare or a health insurance policy. Therefore, paying the cost for non-medical care provided in a home has to come from another source.

It won’t affect my financial situation. Caring for a loved one is physically and financially demanding. Oftentimes, caregivers miss work, work fewer hours, make work accommodations, and quit work when they take on that responsibility. Additionally, caring for someone in your own home can increase your utility bills, groceries, and home maintenance costs. So, while caregiving comes with positive emotional rewards, it can also come at a price.

It won’t affect my mental and physical health. Costs of caregiving aren’t just financial, but can be mentally and physically demanding. Because many who require long-term care are physically disabled, it imposes limitations on daily activities. Therefore, caregivers often perform physically-demanding tasks such as helping loved ones get in and out of bed, helping them eat, pushing their wheelchair up ramps, and more. All of the demands can lead to increased stress, exhaustion, and health problems for yourself.