Many ignore the fact that they will probably need help with activities of daily living as they age, yet 66% of those living until age 65 will require such help at some point in their life. Many believe that if they do require such help they can rely on their health insurance or government programs, yet typical health care policies do not provide any benefits for long term care issues and Medicare offers almost no coverage.
Though Medicaid is technically a government sponsored insurance program developed to cover such issue, it is basically only a form welfare, which requires an individual to become insolvent (either based on assets or a combination of assets and income) in order to qualify. In addition, this joint state and federal welfare program often robs a healthy spouse of a previously adequate income by authorizing too little in protected resources and income. Likewise, children, relatives and friends are not recognized for the financial sacrifices they make in providing the early care before a recipient’s health deteriorates enough to require professional help.
Most older Americans would prefer to receive care at home rather than in nursing homes, yet many states have been slow to reform Medicaid programs to make that choice widely available and no state programs authorize payments for family members to provide care for older loved ones at home. Most states do a much better job of using Medicaid dollars to help people with developmental disabilities remain in their homes and communities than to help older people and adults with physical disabilities.
In the first ever report examining Medicaid spending specifically for older people, “A Balancing Act: State Long-Term Care Reform”, released July 11 by the AARP Public Policy Institute, Enid Kassner, the institute’s director of independent living and long-term care, and lead author on the report said, “We really didn’t realize how far behind services for older people were, compared to services for people with developmental disabilities.”
Estimates of the number of informal caregivers (non-professional caregivers, most typically family members) range from 20 million to 50 million people. This represents about 20% of the total population providing part-time or full-time care for loved ones.
- The typical caregiver is a daughter, age 46, with a full-time job, providing an average of 18 hours per week to one or more of her parents.
- Among adults aged 20 to 75, providing informal care to a family or friend of any age, 38% care for aging parents and 11% care for their spouse.
- About two-thirds of those caregivers for people over age 50 are employed full-time or part-time and two-thirds of those-about 45% of working caregivers report having to rearrange their work schedule, decrease their hours or take an unpaid leave in order to meet their caregiving responsibilities.
- A recent study estimates these people lose about $660,000 in wage wealth over their lifetime because of work sacrifices.
- Estimates of productivity losses to businesses because of time off for caregiving range from $11 billion to $29 billion yearly. The average amount of time informal caregivers provide assistance is 4.5 years but 20% will provide care for 5 years or longer.
Estimates of the number and percentage of elderly needing care:
- Nursing Home for the Aged 1.62 20.00% 4.40%
- Community Housing With Care 1.05 13.00% 2.90%
- Home Care for the Aged 5.40 66.90% 14.70%
- Totals 8.07 100.00% 22.00%
For Residential and Home Health Care, 40% of costs are currently defaulted to Medicaid (state based welfare), 24% are paid out of pocket from assets (though all Medicaid recipients will have already exhausted their own assets in order to become eligible for Medicaid) and only 6-8% of such costs are currently paid for by insurance benefits.
Based on independent analysis of yearly, one-on-one care hours, it is estimated that about 84% of all long-term care needs are not covered by government programs or insurance benefits. This falls primarily in the category of family-provided home care to help with activities of daily living, or help with maintaining a home, providing meals and support, or care services providing supervision or companionship or providing transportation and shopping services. Care not covered by the government is also care provided from family out-of-pocket payments in nursing homes and assisted living facilities. Families are also attempting to hire more and more aide services to help with care at home.
It is estimated that 71% of all long-term care hours are provided in the home by family. Most of this care is provided free of charge by family members, friends or volunteers. However some is provided by professionals or aides paid from family funds or from insurance. Multiplying the total number of home care hours times the average hourly cost for home health aides an estimated equivalent yearly cost of home care in this country is estimated at approximately $313.2 billion.
This is roughly 3 times the total current amount the state and federal government pays yearly for all long-term care services. If the federal government had to pay all home care costs in this country combined with what it already pays for long-term care, the cost would be the third largest single expenditure in the federal budget exceeded only by Social Security and defense.
Caregiving involves two groups of people who provide long term care. Roughly 60% of all care is provided by family members who receive no pay for their time. These individuals are usually called informal caregivers. The balance of care is provided by formal caregivers who are volunteers or paid professionals.
Even though long term care can be the greatest crisis an elderly person can experience, there is an appalling lack of preparation among older Americans. Scarce government funds and changing demographics make the need for planning even more critical than ever.
Approximately 11.1 million Americans of all ages are receiving formal or informal care at any given time, representing about 4% of the population. Approximately 9.5 million receive care at home or in the community and another 1.6 million reside in nursing or intermediate care facilities.
About 25.8 million family caregivers provide personal assistance to individuals 18 years or older who have a disability or chronic illness. Nearly one out of every four households (22.4 million households) is involved in giving care to persons aged 50 or older. Approximately 43% of those receiving care are under the age of 65 and are evenly spread between ages 18 to 64. Children under 18 and receiving assistance because of disability are often characterized under different criteria of caregiving.
A major concern of elderly Americans is the high cost of medical care. There are 35 million people over the age of 65 in this country and they comprise 12.8% of the population.
Despite the fact that the elderly comprise only 12.8% of the population, they consumed at least 24% of all health expenditures in 1997 in the form of Medicare and Medicaid outlays. This demonstrates that health care for the elderly is costing more per year on average than for younger age groups.
It is estimated that only about 9% of 65 to 69 year-olds are receiving help from a caregiver whereas about 50% of the age 85+ are receiving care. Approximately half of all nursing home residents are 85.
The need for receiving long-term care increases as a person ages.
Though most elderly people in this country focus on providing the means to pay the high cost of medical services and drugs, the potential, they tend to ignore the 6 fold higher potential cost of long-term care. With the growing budget constraints there is a high probability that government programs may not be able to provide them with as much help in the future.
People should shift their focus, at least in part, on providing the means to pay for the high cost of long-term care.
Informal Caregiving can be stressful and demanding. In the case of a healthy spouse or a child living with the disabled person at home, caregiving can be a 24 hour, 7 day a week commitment. But even for the caregiver not living in the home, looking after a loved-one or friend can consume all of the caregiver's free time.
Surveys and studies show that depression is a major problem with full-time informal caregivers. This is typically due to stress and fatigue as well as social isolation from family and friends. If allowed to go on too long, the caregiver can sometimes break down and may end up needing long-term care as well.
A typical pattern may unfold as follows:
• 1 to 18 months--the caregiver is confident, has everything under control and is coping well. Other friends and family are lending support.
• 20 to 36 months--the caregiver is taking medication to sleep and control mood swings. Outside help dwindles away and except for trips to the store or doctor, the caregiver has severed most social contacts. The caregiver feels alone and helpless.
• 38 to 50 months--Besides needing tranquilizers or antidepressants, the caregiver's physical health is beginning to deteriorate. Lack of focus and sheer fatigue cloud judgment and the caregiver is often unable to make rational decisions or ask for help. It is often at this stage that family or friends intercede and find other solutions for care. This may include respite care, hiring home health aides or putting the disabled in a facility. Without intervention, the caregiver may become a candidate for long-term care as well.
Since most informal caregiving is provided without training or counseling, individuals providing such care may not be aware of the inherent financial and emotional challenges.
Roughly 70% of all long term care is provided in the home primarily by a spouse, a daughter or daughter-in-law. More family caregivers are in the workplace or live far away and are finding it difficult to care for loved ones at home.
Do you know what, who, where you'll be when you need assistance?