High Costs of Home Healthcare Create Need for California Estate Plan

Posted on Jan 22, 2014

As the 2014 begins, it is even more important than ever for residents of California to create an estate plan. The California Legislature passed several new laws in 2013 that will make it more expensive to receive home care services in the state. The initial price increases that residents may see range from 10 – 30%. The price increases largely depend on the type of services that are received. For Californians without proper estate planning, these increases could have a substantial financial impact.

First to be affected by the new laws are those who receive in-home care for more than nine hours per day. These personal attendants, or caregivers, are now required to be paid overtime at the rate of one and one-half times their regular pay rate for every hour worked beyond nine hours in one day or 45 hours in a workweek. This hourly threshold is scheduled to decrease to 40 hours per week in 2015. In addition, minimum wage is scheduled to increase on July 1 to $9 per hour, which is $1 per hour more than in 2013. 

As a result of dramatically increasing costs of in-home care, families will have to make difficult choices. These choices may include:

  • Choose to maintain their current level of service until money runs out, at which time the patient will need to be moved to a nursing home.
  • Choose to reduce the level of services that are received, leaving a large burden on family members to make up for the lesser amount of care.
  • Choose to utilize a “board and care” facility, wherein three- to five-bedroom homes contain up to six residents, staffed by one or two caregivers.

As the costs of in-home care increase, there may be a rise in the number of nursing home admissions at an earlier stage than many patients would currently choose this option. There are only a limited number of beds, however. This will increase the competition for these spots. As a result, it is vital for families to create an estate plan that incorporates long-term care planning. The earlier these plans are created, the more effective they may be.

To learn more about long-term care planning and other estate planning matters, contact our office today at (714) 459-5481.

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James F. Roberts
Founder and owner of the Law Office of James F. Roberts and Associates, a premiere estate planning law firm