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How to Save Thousands a Year on Caregiving Costs

These five strategies can reduce expenses without diminishing care 

A good friend of mine once said that everyone he knows wants to live a long life, but no one wants to become old. That’s the senior-care dilemma in a nutshell. But the truth is, if you want to live a long life, it’s sensible to make a long-term care plan and look for ways to save money on it — and if you’re shouldering costs for your parents, you should find ways to reduce those expenses too, without diminishing the quality of care.

(MORE: Finding Affordable Home Care for Your Parents)

What Long-Term Care Costs

The need is greater than ever. According to Genworth’s 2012 Cost of Care Survey, one year of long-term care ranges from $39,600 for an assisted living facility to $81,030 for a private room in a nursing home. (The median rate for that nursing home in 2007: $65,700).

Home care costs can be sizeable, too. Hiring an aide for 40 hours a week could run more than $40,000 a year. Adult day care costs, on average, $15,860 annually.

Fortunately, you can pursue savings in just about every scenario — at a facility or in home with a skilled professional, like a nurse, and even informal care provided by friends and family.

5 Ways to Save Money

Below are my five suggestions that could save you thousands of dollars; the rates cited are based on Genworth’s 2012 Cost of Care Survey, except where otherwise noted.

1. Negotiate. Many families hire a caregiver to handle such duties as light housekeeping and companion care. You may be able to work out a lower rate than the one you’re quoted — informal caregivers tend to be independent workers, so they don’t have to factor in a home-care agency’s overhead costs.

Tip: Ask for a 33 percent discount off of the homemaker/companion annual rate of $41,184, the national median cost based on a 40-hour week.

Potential annual savings: $13,590

2. Don’t overpay for a home health caregiver. When interviewing a potential home health care aide, ask if the particular type of medical help you want qualifies for a lower hourly rate.

Tip: Negotiate a 10 percent discount off the home health aide annual rate of $43,472, based on a 40-hour week.

Potential annual savings: $4,347

3. Ask a long-term facility for a fee waiver. As an enticement, nursing homes and assisted living communities may waive or eliminate their one-time, upfront community fees. The amount varies from facility to facility, but the national average is $1,621, according to Genworth’s 2009 Cost of Care Survey.

Potential one-time savings: $1,621

(MORE: Could You Be Forced to Pay Mom’s Nursing Home Bill?)

4. Request a “private pay” discount. Some long-term care facilities will lower their rates if you pay for their services out of your savings or from a long-term care insurance policy, rather than through Medicare or Medicaid.

Tip: Ask the facility administrator for a 10 percent discount off the private room rate ($77,745 a year at a nursing home).

Potential annual savings: $7,745

5. Check into free subsidies at adult day health care centers. Many of these facilities are free for people who qualify. Otherwise, the median daily rate is $61.

Tip: Ask the manager about its rules and how to apply for a subsidy.

Potential annual savings: $15,860

Note: Discounts and savings are not guaranteed.

Bob Bua
By Bob Bua
Bob Bua is president of CareScout, a division of Genworth Company, which helps Americans make eldercare decisions.

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