THE TWO BIG QUESTIONS
Consistently, when surveyed, 90% of seniors say they want to age in their own home. The choice to age in place is undoubtedly the best choice for many people. However, choosing to age in place surfaces two obvious questions that must be answered.
What modifications do I need to make to my home that will enhance my independence and enable me to age in place across the lifespan?
How will I pay for these modifications?
WHAT MODIFICATIONS DO I NEED?
Home modifications are changes that we make to our home to accommodate our changing needs as we age. Modifications are also made to enhance the independence of someone with a disability. Modifications can be as simple as adding a grab bar, or as complex as adding a Granny Flat.
Home Modification is a broad term. However, financial assistance is often designated to a very particular solution. It will be helpful for you to understand a few terms.
Assistive Technology, Adaptive Technology, often referred to as AT. This refers to tools or devices that enable independence.
Environmental Accessibility Adaptations and Environmental Modification are terms that are often used by Medicaid and are another way of describing home modifications.
Granny Flats, also known as ECHO Units (Elder Cottage Housing Opportunities) are small cottages designed specifically for seniors that can be temporarily put on property that allows the senior to live close to family but have their own space.
The options are amazing. All you need to do is open the door to fulfilling your dream of aging in place.
The first step is to determine what Assistive Technology (AT) and Environmental Modifications you need to enhance your independence and successfully age in place. Remember, this is where an Occupational Therapist can provide you with invaluable information. Many doctors will be happy to write a script (Physician’s Order) for an Occupational Therapist Home Assessment. This is required if you would like to have Medicare or Insurance cover that assessment. However, you can always privately pay for an OT Assessment. Not every Occupational Therapist is trained or specializes in Environmental Modifications. Be sure to ask and check around to be sure you are receiving an assessment that will focus not only on AT but environmental modifications.
Start putting your shopping/wish list together. Your Occupational Therapist will also help with this. They will make recommendations for AT and Environmental Modification. Keep in mind that most Environmental Modification will require a contractor that is not only licensed and qualified to make structural modifications but is familiar with the codes in your state and locality that may impact modifications. When calling a contractor/remodeler ask them they have a certified Aging In Place Specialist on their team. This is a nationally recognized certification process through the National Association of Home Builders and AARP. A Certified Aging In Place Specialist (CAPS) has completed course work that focuses on Environmental Modification. To find a Certified Aging In Place Specialist visit www.nahb.org
Not only will you want a bid but you will want a set of plans that show what will actually be modified. (See more in depth information on this subject – focusing on question number 1).
HOW WILL I PAY FOR THESE MODIFICATIONS?
There are several financial resources that will help you make the modifications to your home. This is not a comprehensive list but is intended to highlight several viable options.
People often think that Medicare will be a potential source for financial assistance. Typically, Medicare does not cover the costs of home modifications. There can be some exceptions for Assistive Technology that may be required for medical reasons or have been specifically prescribed by a doctor. This needs to be clearly defined and prior authorization would be required. Medicare may provide assistance in determining what modifications are medically necessary. Medicare Part B will pay for an Occupational Therapist to evaluate your home (apt/condo) and determine what changes are medically required at this time. There are rare instances where Medicare will pay for bathroom modifications. However, the vast majority of construction costs related to your modification will not be covered by Medicare. If Medicare did provide coverage it would be for hardware associated with the modification.
Medicare Part C – Medicare Advantage
Medicare Advantage Plans are insurance that is available through a private insurance company. These plans offer all the same benefits as the original Medicare but may offer additional benefits that Medicare does not. Some plans may offer limited home modifications if you can show there is a medical need. PLEASE NOTE that advantage plans differ from state to state and the same company may have different plans for different parts of the state. It is very important that you have this information clearly defined and request a written copy of your coverage for your state and area.
Medicaid HCBS Waivers and Home Modifications
Medicaid is a federal and state insurance program that is designed to provide assistance to low income seniors. The original intent of this assistance was to help cover the cost of a person’s stay in a Skilled Nursing Facility. However, HCBS has now expanded its coverage to offer at-home services. The goal is to help a person avoid skilled nursing by offering them services and modifications that allow them to live in their own home. This is done through HCBS Waivers. The waiver will help to pay for modifications (within determined dollar limits) if the modification will allow the person to life independently. Each state determines their own eligibility rules regarding this benefit. Generally, any environmental modifications will need to be performed by a contractor that is a QSP (Quality Service Provider). This means the contractor has gone through an extensive process to qualify for this designation and is permitted to bill HCBS for the work performed. To receive Medicaid, you need to financially quality and a case manager will initiate the modification process on your behalf.
Veterans Programs for Home Modifications
For veterans, there are multiple home modification options that come in the form of grants. There is the SAH Grant, the SHA and then there are non-profit organizations that serve veterans. https://www.benefits.gov/benefit/4733
To receive a SAH or SHA Grant you must:
Own or will own the home where the modification will be made.
Have a qualifying service-connected disability.
There are generally dollar limits with these grants and the requirements or what the money can be used for will differ. It is always worth a call to your local VA for more details or check out www.va.gov/housing-assistance/disability-housing-grants/
There is also the HISA Grant.
Veterans Directed Care also provides assistance in the home. This may not directly provide for an environmental modification, but it may open the door to have your home assessed to environmental modification options.
There are circumstances where the VA (under some programs) may allocate funds to make modifications to accommodate a disability regardless of whether or not the disability was connected to military service.
There are other programs such as the Veterans Directed Home and Community Based Services, (VD-HCBS). Aid and Attendance can also offer one-time bonuses for “unreimbursed medical expenses.” If a veteran is receiving a veteran’s pension, they may qualify to receive a temporary increase in benefits to cover home modifications. A national non-profit that has taken on the challenge of making modifications so a vet can live at home is the “Rebuilding Together – Heroes at Home Program.”
Non-government Resources for Veterans
This is not a complete list but can help you look at other options.
Homes for Our Troops, Inc.
Salute America’s Heroes
Paralyzed Veterans of America
USDA – Rural Development (U.S. Dept. of Agriculture)
The section 502 Guaranteed Loan Program assists approved lenders in providing low and moderate income households the opportunity to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas. This can include purchasing, building, rehabilitating, improving or even relocating a dwelling with 100% financing…and can mean no money down for those who qualify
When you have a regular mortgage, you pay the lender every month to buy your home over time. In a reverse mortgage, you get a loan in which the lender pays you. Reverse mortgages take part of the equity in your home and convert it into payments to you – a kind of advance payment on your home equity. The money you get usually is tax-free. Generally, you don’t have to pay back the money for as long as you live in your home. When you die, sell your home, or move out, you, your spouse, or your estate would repay the loan. Sometimes that means selling the home to get money to repay the loan.
There are three kinds of reverse mortgages: single purpose reverse mortgages – offered by some state and local government agencies, as well as non-profits; proprietary reverse mortgages – private loans; and federally-insured reverse mortgages, also known as Home Equity Conversion Mortgages (HECMs).
If you get a reverse mortgage of any kind, you get a loan in which you borrow against the equity in your home. You keep the title to your home. Instead of paying monthly mortgage payments, though, you get an advance on part of your home equity. The money you get usually is not taxable, and it generally won’t affect your Social Security or Medicare benefits. When the last surviving borrower dies, sells the home, or no longer lives in the home as a principal residence, the loan must
be repaid. In certain situations, a non-borrowing spouse may be able to remain in the home. (This information is from the Federal Trade Commission Consumer Information).
This is a possible option for anyone wanting to age in place. However, be sure you are aware of the fees and go into this process with your eyes wide open.
ND Assistive is a non-profit organization that strives to bring assistive technology devices and services into the lives of North Dakotans and Minnesotans of all ages who need it. The goal is to help bridge the gap between ability and disability using assistive technology.
ND Assistive is constantly following advances in the field of assistive technology. The services provided cover a broad range of needs. This includes assistance in the classroom, the community, and at work, as well as, technology to allow those experiencing the effects of aging to safely remain living in their own homes. Providing funding and distribution programs is another integral segment of the organization.
ND Assistive is a non-profit organization that was designated by the former Governor Ed Schafer as the implementing entity for the Statewide Assistive Technology Act Program in 1993. In addition, ND Assistive is the implementing agency for several other state and federal contracts.
ND Assistive Financial Loan Program
Guaranteed Financial Loans at a 2% fixed interest rate to make it easier for people with disabilities to get the AT they need
Flexible loan repayment terms to make what may seem out of reach financially affordable
Individual consideration if there is a poor credit history
Loans up to a maximum of $50,000
The Possibilities Grant was established for the sole purpose of purchasing assistive technology devices and services for people residing in North Dakota and Moorhead, MN who:
Have a clearly established need for assistive technology.
- Have needs not met by other funding programs, and meet the eligibility criteria set forth in the application.
Individuals that are impacted by a disability and/or aging often have assistive technology needs and expenses that are above and beyond what insurance and other funding programs will cover. This is where the Possibilities Grant steps in. With the funds raised, ND Assistive helps eligible applicants purchase vision equipment, daily living aids, smart home devices, computer access tools, vehicle modifications, and more. This program is intended to be a last resort, and cannot supplant other public funding avenues (e.g., insurance, Vocational Rehabilitation or public schools).
LABOR COSTS vs. MATERIALS AND WHY IT MATTERS
Costs for home modifications can vary greatly. The cost for installing a simple grab bar is going to be dramatically different from doing a complete makeover of a bathroom. Labor and Material should be thought of as two separate costs. This is important because materials for a modification can often be classified as durable medical equipment (DME). Often a different category of financial assistance or insurance coverage applies to DME. For example, adding a stair lift in your home would make it easier for you to access the second level. There is the cost of the stair lift and the cost of the installation. The stair lift may be covered as durable medical equipment by various payer sources while the labor to install it will generally not be covered. Don’t be dissuaded by the ‘bottom line’ but always ask if the materials (DME) cost can be broken out from the labor cost. This will obviously impact the affordability for a modification.
Tax Deductions and Credits
Almost all home modifications or improvements that are made to accommodate age related disabilities can be tax deductible. The actual cost of the equipment and the cost for the installation of this equipment are generally tax deductible (be sure to check with your tax advisor).
When you make a permanent modification that increases the value of your home, you may be able to claim deductions within certain parameters. For example, let’s say you expanded your bathroom to make it accessible to you and increase the visitability of your home. Generally, this kind of modification will increase the value of your home. If the modification costs you $25,000 and the value of your home increased by $20,000 then the $5,000 difference can be considered a medical expense and be claimed as a deduction.
TAPPING INTO YOUR PRIVATE PAY RESOURCES
You love your home and through the years you have invested in your home. Maybe you installed a new furnace, water heater, windows, roof, painted, sided, repaired cracks, kept the yard up. In other words, you guarded your investment. Even if you did the work yourself – none of those improvements came for free. Why would give up the home you love when you could make the investment that would allow you to age in place. Not only that, when was the last time you had it appraised. Your home may have increased in value and equity. Frequently people have sticker shock when they look at the price of the modifications. Why would you put $50,000 into your home at this stage of your life? Because the alternatives may cost you even more. For example, Assisted Living will generally cost $4,500 to $6,500 a month. Take the lowest number and do the math. In eleven months, you will have covered the cost of your modification. Keep in mind you will be paying $4,500 or more per month for as long as you live in the assisted living.
Another consideration most don't account for is the high cost of delay. You may notice it is getting more and more difficult for you to live in your home. Modifications would not only enhance your independence but remove the hazards that jeopardize your own health and independence. A fall may mean several weeks in a Transitional Care Unit or even an immediate move to a skilled care environment costing you $15,000 or more a month. DO the math and you will discover you could have paid for that modification in just a couple months or less, instead of that money going towards skilled care. Some people think, “Well, I have long term care insurance, so it will cover me.” Good planning on your part – but is a nursing home where you want to live?
Long Term Care Insurance
Here is a financial option you may want to explore. Some Long-Term Care Insurance policies are now giving serious consideration to covering the Durable Medical Equipment that would be necessary for you to age in place safely. (Remember DME does not include incontinence products or other consumable products). It certainly makes sense for the insurers. They are making a fixed, one-time reimbursement for DME that will allow you to age in place. That is a far cry from reimbursing a nursing home or assisted living several thousand dollars a month. They may make an adjustment to the length of future reimbursements or the amount if you ever have to go into a skilled environment…but the benefit to you may be well worth the change in benefits.
Somewhere in your safety deposit box you may have a neatly folded life insurance policy in a plastic sleeve. Did you know that policy may have cash value? It may be worth getting in touch with your insurance company and asking them to give you a quote on the cash value of that policy. It will be less than the death benefit, but when you consider your estate, and the trade-off to preserving your safety, allowing you to live in your home and enhance your sense of well-being … it may be the right time to cash in the policy. Keep in mind, you also want to be aware of the reasons why you purchased that policy. At the time, it may have been to create a safety net for your family or possibly pay for your funeral. Are those reasons valid today? Over time, our thoughts on this policy move to more of an estate inheritance benefit. We would all love to leave our family with something – and that something isn’t debt. Weigh your options but keep in mind, your safety and well-being are probably your family's primary concern. One of the hidden benefits to making a home modification is the peace of mind it brings to your loved ones.
Here are a few other financial options. Some of these will depend upon your age and the list isn’t exhaustive.
Your own personal savings.
A low interest modification loan. Some banks have, or will create, a loan package for a home modification. Home Modification Contractors will sometimes have a relationship with a bank that they would recommend.
Selling off other assets such as land, collectibles, and the list goes on and on.
Depending on your age, picking up a part time job that allows you to stash some cash to put towards the modification.
Do your homework and stage yourself to successfully live in the home you love through the lifespan.