Cost of Long-term Care Sure to Rise
by Tanya Hobson-Williams
Oct 04, 2017 | 968 views | 0 0 comments | 82 82 recommendations | email to a friend | print
A state court’s ruling on paying caregivers working 24-hour shifts higher minimum wages and overtime guarantees places a greater financial burden on families, forcing them to look for alternative ways to pay for long-term care.

The New York State Court of Appeals recently upheld an April 11th ruling by the state Supreme Court that caregivers who work 24-hour shifts should be paid the full shift, including for meals and eight hours of sleep.

This decision does away with a statewide practice allowed by the Department of Labor in which caregivers were only paid for 13 hours of their shifts.

This decision, unless overturned on appeal, will definitely affect the home care services industry. For those families who privately pay for home care services, their out-of-pocket costs will double.”

Managed long-term care agencies are already reimbursed by Medicaid at a fixed rate, regardless of the number of hours a home care worker works. But with higher labor costs, Medicaid may not be willing to reimburse these agencies for the increased costs.

Medicaid may scrutinize and deny more applications, even for the smallest errors. Also, there have been reports that managed long-term care agencies are not taking new cases, presumably because of the court ruling.

Families will feel more of a squeeze as the cost of providing a caregiver of an elderly or chronically ill loved one goes up. According to Genworth Financial’s Cost of Care Survey, the median annual cost of a home health aide in New York State is $54,340, with an annual growth rate of 2 percent over the last five years.

In Queens and Brooklyn, the annual cost is $46,904 with an annual growth rate of 3 percent over the same time period. Genworth predicts in the next five years the statewide annual median cost will jump to $62,995 and Queens and Brooklyn residents will pay $54,375 a year just to keep their loved ones in their homes.

There has been a lack of home health care aides in the job market, which has resulted in these price increases. Labor costs have also skyrocketed, which means families who are paying someone to care for their loved one will have to pay more.

A separate survey by Genworth showed that two-thirds of all respondents believe the federal government will cover all or part of their long-term care expenses. What people do not know is that Medicaid has income restrictions when paying for care, and Medicare does not pay for home care if that person does not need skilled nursing care.

Family members should take out long-term care policies or life insurance policies with a long-term care rider. These are good options, provided they are obtained by, at least, the age of 50. That way, you are covered and you will be paying lower premiums.

Tanya Hobson-Williams is an elder law attorney practicing in Queens.
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