Pricing the Priceless

Author: Mark Smigel, CFP® – Certified Financial Planner®,
EPC™ – Elder Planning Councelor

My mother-in-law once said, “Getting old isn’t for sissies.” As I quietly observed her ageing journey into the unknown world of assisted living, and later, facility care, I think she was right. The challenges of being an elder amid the other one third of aging Canadians showcases growing concern around patient need, patient volume, and underfunded patient care.

Initial Stages of Care

In the initial stages, we try our best to keep mom and dad in their original living environment, and, if possible, we become their primary care givers. This gives our parents the dignity of being treated like responsible adults but also forces us to juggle raising our own families, maintaining work obligations, and committing to friendships outside of the home.

We commit to caring for our folks through time and action, including but not limited to:

  • Attending doctor’s appointments
  • Refilling prescriptions at the pharmacy and ensuring the proper dosages are maintained
  • Shopping for groceries and ensuring the food is fresh and safe to eat
  • Repairing glasses, sizing walkers, and ensuring hearing aids are charged
  • Reviewing mail when it becomes overwhelming for them
  • Chasing off scammers, spammers, and others who wish to prey on mom and dad

Cognitively, comprehension slips with age, and their dependency on us goes up. They get scared, and their anxiety begins to change our lives too, and not without emotional cost – late family suppers, missed hockey games, and cancelled spousal date nights.

Costs can also get co-mingled with your personal finances for items not covered by Fair Pharmacare:

  • Hearing aids
  • Seat cushions to avoid bedsores ($500-$678)
  • In-home care costs are variable ($36-$50 hour) and the experience is mixed in predictability.

Both parent and child will likely become exhausted, and slow to admit that additional help may be a good thing. So, after we wrestle with guilt in coming to this conclusion, where do we go from here?

Next Stages of Care

Health Care Assessment

Let’s begin with the acknowledgement that our loved ones must endure a primary healthcare assessment with a Health Authority member to come up with a documented health baseline for their growing needs.

  • Expect to wait a number of months before an assessment professional is available.
  • This exercise is seldom embraced by our parents since it is capturing the realities of ageing that may not be warmly embraced (eg: memory loss, repetitive story telling).
  • Few parents want a stranger added to their care-giving world and moving is a major life decision that requires full information before undertaking.
  • Expect parents to be coy with their answers, perhaps even comical, to avoid information being used against them.
  • Try to find a moment to giggle if you get some humour – you will need it later!

Assisted Living

Should the journey continue to an assisted living community, recognize that there are both funded and unfunded categories. All Health Authorities offer funded living programs in both private and non-profit partners. Payments are deducted using an EFT/PAD mechanism for the first of every month, and the rate you pay depends on if you qualify for government support or not. The monthly stipend covers the basics, which includes:

  • rental accommodations
  • meals
  • light cleaning
  • flat linen laundry services
  • onsite social/recreation activities
  • 24-hour emergency response

Additional costs: Families will pay extra for onsite grooming (eg: hairdressing/barber), foot care nurse, dental hygienist, TV, internet and personal telephone. ($250-$400/month depending on facility/service)

Private vs Public Facilities

Public Facilities: Elders who qualify for facility care are put on a wait list and families are encouraged to select more than one location – there is no way of really knowing what opens up, when or where. The Health Authority makes this decision based on volume and availability. As you would expect, public facilities have a lower overall cost, and fewer comforts.

Private Facilities: There is also a market for private assisted living sites, where a health Authority does not have any involvement in determining resident eligibility. You can contact these sites directly or by checking Assisted Living Registrar’s website and clicking on “Finding an Assisted Living Residence”. Like most things in life, you get what you pay for. As such, please make site visits and bring questions. Each facility (private or public) will give you a guidebook which helps address the most commonly asked questions and provides different online resources.

Who Gets Government Funding and How Are Costs Calculated?

Funding is income tested. Funded assisted living is intended for elders with low to medium incomes who require assistance with personal care.

  • 70%-80% of mom/dad’s after-tax income is used as the metric. Line 15000 of their tax submission will be used as the gauge and it will include investment income.
  • This is measured annually and recalculated accordingly; please review this with your Connect Wealth advisor to ensure that mom/dad’s portfolio is structured in a tax friendly way for income testing purposes.

The costs savings for funded assisted living is well worth it. In our family’s case in 2021, funded assistance in a public facility came to $1660/month, with extra services charged accordingly. This was a shared room with a stranger and limited personal care

Moving from Assisted Care to Private Care

In looking for more hands-on care in a facility closer to our residence, we moved our loved one to a private facility. The cost was $6500/month for an unfunded facility, and it gave her:

  • a private room,
  • active caregivers, and
  • more quality attention to detail.

After re-assessment and confirmation that she required 24-hour attention for her security (6 months later), she was given funded care status and the rate was reduced to $2189/month.

Average Time in Care

Gerontologists tell us that residents typically spend 3-5 years in facility care before they pass, and along the way, to expect the costs will grow more than $125,000. Recognize, too, that the cost of care could be much higher if you have involuntary separation with one person requiring care, and the other still requiring living expenses in their own home.

Ageing affects more than just the elder – it hits the entire family, both in the heart and even perhaps, in the pocketbook. Having honest conversation in advance and fashioning your expectations will help because it won’t be easy for most families. Your financial advisor at Connect Wealth is available to help discuss and plan and prepare for this stage in your family’s life. So buckle up – ‘cause this journey ain’t for sissies!

Connect Wealth is an independent financial planning firm that offers holistic advice to clients based on their current goals and future aspirations. We use well-established workflows and cutting-edge technology to maximize planning efficiencies while simplifying the process for clients. Learn how you can maximize your financial opportunities at www.connectwealth.com

Mother and father with baby