Aging well: Understand and manage the costs associated with getting older
Covering expenses related to aging can be a cause of stress for many older Americans and their family members.
Data from the West Health and Gallup report, The U.S. Healthcare Cost Crisis1, found that Americans borrowed an estimated $88 billion to cover health-care costs alone, and 45% percent feared they may have to file for bankruptcy protection in the event of a major health event.
These data points are scary and stressful for older adults and family caregivers.
Some seniors decide to forgo treatment and medication to save money. Others continue living at home alone despite needing more advanced care.
The best way to ease concerns is to take a realistic look at costs and consequences to get an accurate picture of your or your parents’ cost of aging. Use that information to make informed decisions and to access resources to keep costs in check and cover expenses.
Lower the cost of medication errors
The West Health/Gallup data showed almost 7 million seniors couldn’t afford to pay for their prescriptions, 80% of which are taken for somewhat serious or very serious health conditions. Additionally, many older adults think they can save money on prescriptions by taking them less often or differently than directed. These medication errors can put you at higher risk for needing emergency care or hospitalization2, situations that are far more expensive than medication costs. For example, the average cost of an ambulance ride is $4293.
Tips to reduce the risk of medication errors:
- Tell your pharmacist about all the medications and supplements you take (including over-the-counter) so you understand how to take them and can avoid potentially dangerous interactions.
- Consider an automated medication dispenser to make it easier to remember to take medications and ensure the right dose is given.
Tips to help lower the cost of prescription medications:
- Ask your pharmacist about manufacturers’ discounts, lower-price brand names and appropriate generic options.
- Search the Medicare database of pharmaceutical assistance programs.
- Use web-based and mobile apps to comparison shop nearby pharmacies without leaving home.
- Find out if your state offsets the cost of prescription drugs for seniors.
- Meet with your physician’s social worker or the council on aging to find out about local organizations that provide financial assistance.
Contain medical costs by reducing fall risk
Older adults are more prone to falls and injuries from them. One in five who fall experiences broken bones or head injuries, and about 3 million are treated for a fall4. CDC research found that among all nonfatal injuries treated in the emergency room, 37% of costs were associated with falls5. In 2015 (the most recent year available), the total medical costs for falls exceeded $50 billion6.
Lowering the likelihood of falls can keep medical costs down. Check out these resources to reduce causes of falls and to recover more quickly from them:
- Learn how caregivers can reduce senior fall risk
- Do a fall risk assessment for your home
- Know what to look for in a personal medical alert system
Determine the cost of in-home care or assisted living
It’s helpful to understand the costs of various forms of eldercare so you can choose the option best for you/your parent and your budget. The U.S. Department of Health and Human Services has estimated the average cost of care for older adults:
- $7,698 per month for a private room in a nursing home
- $6,844 per month for a semi-private room in a nursing home
- $3,628 per month for care in a one-bedroom assisted living unit
- $68 per day for services in an adult day health care center
- $20+ an hour for home health aide or homemaker services (may be more expensive on nights, weekends and holidays)
Ask your doctor or nurse to help you determine the type and amount of care necessary. Then meet with your banker, CPA or financial planner to create a reasonable budget. Contact your local department of aging and area senior centers for other monetary support, or search the financial assistance section in the U.S. Department of Health & Human Services’ Eldercare Locator. If you can’t afford full-time care or assisted living, consider hiring respite care, investigate drop-in or day facilities or coordinate with a nonprofit or faith-based visitation program.
Investigate tax credits and deductions
Thinking about taxes is almost as stressful as considering the cost of aging, but there are opportunities to reduce expenses with help from the IRS. Talk to your CPA or a trained tax volunteer about:
- The medical expense deduction
- Long-term care and renovation expenses
- The dependency deduction for aging parents and the dependent care tax credit
- Multiple support agreements
Tax laws change frequently and can be confusing, so check with a tax professional for the most up-to-date and relevant information on your situation.
Use this information to help take the fear out of planning for healthy aging for you and your parents.
This information is not intended as a substitute for professional financial, accounting, tax or legal consultation; it is provided “as is” without any representations or warranties, express or implied. Always consult professionals when you have specific questions about any financial matter.
1 Permission to use received via email.