Unprepared, Uniformed, and Reluctant to Leave Home

Posted by CC Andrews

Jun 8, 2016 8:37:24 PM

No, this isn’t a post about recent high school graduates—it’s actually about their parents, or more specifically,hands-1310277-1600x2000.jpg Americans 40 years and older. I am among that group, and we are, for the most part, unprepared to pay for long-term care (something many of us will need in the second half of our lives), uninformed about how it will or can be paid for, and reluctant to go anywhere else but to our own bedrooms to be cared for if or when we need that care.

How do I know this? Here are some stats: A recent survey of Americans 40 and older further illuminates the problem that most of us are woefully ill equipped for the likely inevitability of needing long-term services and supports (LTSS). The survey found that 77 percent of this cohort would prefer to receive long-term care in their own homes, with far fewer choosing to receive care in a senior living community (11 percent) or a nursing home (4 percent)—no surprise here. Released by the Associated Press-NORC Center for Public Affairs, the survey also asked this same group about their preparations for long-term care, and one-third say they’ve done no planning at all for their own care needs.

Moreover, a majority (64 percent) have little confidence that they will be able to pay for it, and just 13 percent are “very sure” they have long-term care insurance, while 4 out of 10 mistakenly believe that Medicare will pay for their care.

Making matters worse, the cost of long-term care is getting more and more expensive and more and more out of reach for a majority of Americans. The Genworth 2016 Cost of Care Survey found that the price tag for long-term care has risen steadily over the past five years. The average hourly rate for a home health aide is $20, a rate that has risen by only about 1.28 percent in the last five years. Assisted living care, at $3,628 per month on average for 2016, has grown by 2.16 percent in the last five years.

Nursing home care—at $225 per day—has made the largest jump in cost, of 3.12 percent in the last five years. No matter how you look at, the cost of long-term care is high—staggering in some cases--and there is no indication that any of these costs will decline in the coming years.

There is a very cool calculator on the Genworth website that helps you figure out what your future costs of long-term care will be, right down to the closest major city. I decided to find out what the price tag will be for me 15 years from now in my fair city of Cleveland, and the numbers are sobering: In 2031, the average annual cost for a home health aide will be about $72,184; an assisted living community will set me back $74,315; and a private room in a nursing home will be $142,165 per year.

If you’re skeptical about whether or not you will need this type of care one day, here’s another stat: Seventy percent of people who turn age 65 can expect to use some form of long-term care during their lives.

What can be done about it? Back in February, a group known as the Convergence Center for Policy Resolutions released a set of recommendations for long-term care financing reform. The framework was developed over the last three years by a group of policy experts and senior-level decision makers representing a “wide range of interests and ideological views,” known as the Long-Term Care Financing Collaborative. Members of the group include Howard Gleckman of the Urban Institute, Jennie Chin Hansen, immediate-past CEO of the American Geriatrics Society, and Gail Wilensky of Project HOPE. Here are some of their recommendations:

  • A universal catastrophic insurance program aimed at providing financial support to those with high levels of care needs over a long period of time.
  • Private sector initiatives and public policies that will revitalize the long-term care insurance market to help address non-catastrophic LTSS risk.
  • Efforts to encourage retirement savings and develop more efficient and innovative use of home equity to assist middle- and upper-income families finance LTSS needs for those risks that are not covered by catastrophic insurance benefits.
  • A modernized Medicaid LTSS safety net for those with limited lifetime incomes who are not able to save for these care needs, as well as for those who deplete their assets paying for medical and long-term care costs, including more flexible public programs that can deliver care in the setting most appropriate to the needs of individuals.
  • Stronger support for families and communities that are the bedrock for people receiving care at home.
  • Better integration of medical treatment and personal assistance.

Although the group acknowledged that many details are yet to be worked out and many questions remain unanswered regarding LTSS financing, they call for more research and “better support stakeholder agreement and informed policy making.”

Not surprisingly, support for policies to help caregivers face the costs of providing long-term care is widespread. Seventy-two percent of those surveyed for the NORC study said they support state programs to provide paid family leave, 83 percent support tax breaks for caregivers, and 73 percent support a Social Security earnings credit for caregivers taking time out from the workforce to provide care.

Just as the cost of college tuition looms for many of us 40-plus Americans, so too does the specter of shelling out thousounds for long-term care. This cohort needs to be educated about what kind of care they will need as they grow older and the reality of how much it will cost.

As these issues are worked through over the coming months (and years), it is wise to look for opportunities for your organization to inform the conversation. Explore solutions you might offer to meet the needs of a cohort with widely varying levels of need, extremely high expectations … and limited resources.

Topics: Senior care, home care, long term care, senior living, assisted living