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Is a 'granny pod' the solution for your aging parents?

Kenneth Dupin says there aren't a lot of options for caring for aging loved ones in the United States. He has set out to help change that. His solution is MEDCottage, a modular home that easily can be placed on a homeowner's property.

"I noticed how differently the rest of the world took care of aging people," says Dupin, founder and CEO of N2Care. MEDCottages, aka “granny pods,” have been commercially available for less than a year and there are a couple of competitors with similar products.

"My driving passion was to reconnect families at this important stage of life. As people age, one of their greatest fears is being isolated from their families, being alone," says Dupin.

Modular homes can help with eldercare

The inside of a MEDCottage

MEDCottages are 12 feet by 24 feet and come equipped with a kitchen (with a small refrigerator and microwave), medication dispenser, bedroom and additional accommodation for a caregiver's visit. The bathroom is accessible to disabled people. It's also outfitted with technology to assist with caregiving duties.

Smart robotic features monitor vital signs and filter the air for contaminants. Sensors alert caregivers to any problems and medication reminders are provided through computers. Technology also provides entertainment options, such as music, literature and movies.

Prices vary, depending on how difficult the structure is to place in the backyard -- for example, trees may need to be removed -- but typically MEDCottages start at around $85,000.

"We're looking to also create a cottage that costs much less as well as one that will accommodate two people," says Dupin. Currently, Medicare and Medicaid do not pay for "granny cottages.” But when the cottages are no longer needed, they can be sold back to the manufacturer for an agreed-upon price.

Granny pods fill void

There is a well-documented preference by older people to age in their own homes as long as possible, says Bernard Steinman, senior research associate at the Institute for Community Inclusion at the University of Massachusetts, Boston. In order to remain at home, seniors need access to services, technology and assistance in daily activities, which may or may not be available in their communities.

The Associated Press last summer reported that adding accommodations for elderly parents to homes is a growing trend.

By living near relatives in granny pods or other housing alternatives, older people have access to assistance when they need it while maintaining some privacy and independence, says Steinman.

"This is one of the outstanding characteristics of these granny pods. They are very high-tech and can provide levels of monitoring and safety features that other forms of housing do not. Whereas formal institutional care is very expensive, the technology contained in granny pods is relatively inexpensive compared to other institutional alternatives,” says Steinman.

According to the Genworth Financial 2012 Cost of Care Survey, the national median monthly rate for one bedroom in an assisted living facility is $3,300. The national median rate for a home health aide is $19 per hour.

What you need to know

Granny pods solve many potential problems, but they are  not permitted everywhere. Check with your local zoning department before buying or renting one.

Also, talk to the company that provides your home insurance policy to make sure your granny pod will have adequate protection. Many policies automatically provide "other coverage structure" at 10 percent of the value of what you carry on your home. This is meant to provide coverage for sheds, garages and granny pods. For example, if your house is insured for $400,000, you may automatically have $40,000 in coverage for your granny pod.

"That being said, make sure that the amount of coverage is adequate and that your contract does not exclude the pod if it is rented. Some carriers may make a distinction between Grandma living there rent-free and your renting it to Grandma," cautions Robert Ryan, president of Ryan & Ryan Insurance Brokers in Kingston, N.Y.

If the value of the granny pod is much higher than the 10 percent value offered under your policy, ask your agent about adding a rider to increase your coverage amount, says Bob Freitag, a public insurance adjuster and president of AmeriClaims in Waxhaw, N.C. If you’re leasing a granny pod instead of buying one, be clear on who has the responsibility to insure it.

"You need to know whether the company who owns it or you have the responsibility for insurance. If you're not the owner, it shouldn't be your responsibility," says Freitag.

Then there's the matter of personal items and furniture. "If the contents in the pod belong to a relative, then they are covered under your homeowner's policy. If they are not a relative, then they need their own policy," says Freitag.

Granny pods are not intended for someone who needs skilled nursing care around the clock. But for families with loved ones who need a little help, granny pods may be the answer to what to do about Mom and Dad.

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