Subscribe to this BlogAging boomers face caregiver shortage
More or less buried in the massive debate over what our health care system should look like is a provision to create a national long-term care insurance program. The Community Living Assistance Services and Supports (CLASS) Act would allow people to pay an average $65 a month and, after five years, be eligible for between $50 to $100 a day in benefits. Insurers oppose the CLASS Act — clearly, it would cut into their sales of long-term care insurance, which haven’t been all that great to begin with. Other criticisms of the act: The government doesn’t need to be expanding programs even further than it already is, and low benefits would give people a false sense of security.
While $100 is better than nothing, I can tell you from experience that it doesn’t cover very much. It would pay for about six hours of daily care from the home aides I hired recently to help my mother recover from surgery. It certainly wouldn't cover assisted living or nursing homes, which run into the tens of thousands of dollars per year.
Whether through private long-term care insurance or a public plan, it’s clear this country needs to do a better job thinking about how we’re going to care for ourselves (and our parents) as we get older and frailer. Few of us have saved enough money or bought insurance to cover whatever care we need in our later years. But there's another aspect of the long-term care problem that people have overlooked: A looming "caregiver crunch," in the words of Ken Dychtwald, a gerontologist and president of the consultancy Age Wave.
Typically the responsibility for care falls on a family member — if not a spouse, then adult children. Before the baby boomers, says Dychtwald, families had an average of four children, meaning that a lot of sons, daughters and their spouses could share the care burden. But the boomers now turning 65 have averaged only two children each — kids who most likely don't live close to their parents anymore. Another difference: In 1950, just 38% of women aged 45 to 55 were working outside the home, so they had plenty of time after the kids left the nest to look after mom and dad. But today, 80% of women in those potentially prime caregiving years are working, says Dychtwald. How many times can we take off from work to take mom to the doctor? Throw in the higher divorce rate, and even more parents are likely to need their children to pitch in.
“If you ask older adults, ‘What worries you about your family?’ they say, ‘I don’t want to be a burden to them,’” Dychtwald says. “People are increasingly coming to realize that in the absence of some other way of providing for care or funding, that care that will fall on the family.”
Dychtwald says the issue came home for him when his parents, now in their late 80s, became ill with a variety of conditions that made it impossible for them to get around on their own. They do have long-term care insurance, which provides an aide six days a week; a coordinator manages all their treatments and activities. “If it weren’t for that protection and care," he says, "there’s a high likelihood my mom and dad would have spent all of their savings, my brother’s or my life would have to have been completely adjusted, and … the life they’ve had together would essentially be over.”
Dychtwald is a big proponent of long-term care insurance, and not just because Genworth, an insurer that's one of the biggest sellers of long-term care policies, is paying him to discuss the subject this week.
The most important thing, he says, is to have some kind of plan. How do you want to live when you’re 80? What kind of relationship do you want with your children? What do your parents want? “Families are intertwined in helping each other get through their lives,” he says. “We can either be the deer in the headlights or we can try to make sense of it.”
I would like to comment on Lisa's assertion that quality long term care can not be had for $50 to $100/day. In-home care and assisted living are not the only two options for senior care.
Adult Day Services can provide quality care in club-like centers while letting loved ones stay in their homes. In a national study by MetLife, adult day care centers are opened ten hours a day and charge on average $65/day.
Adam Griff
Excellent article.
One of the most unfortunate aspects is that for most people, the issue of caring for an aging parent comes as a surprise. Whether it is our fear of thinking about it or our inability to discuss the matter with our parents- the common scenario for a family, is that the subject is only dealt with when something "bad" happens. Often a parent has falen, has been hospitalized and now the Dr. tells us – he/she cannot be on their own anymore and we are strapped to figure out solutions, and the more difficult part – how to pay for them.
Planning for how to pay for care for your self or your parent is something that should be started much earlier (just like we plan for money for college for our kids…)
For more advice and thoughts about how to pay for senior care. you can check out http://www.ourparents.com/finance
The aim of the CLASS Act is not to create a new government entitlement program. It will be funded by the premiums of the participants (similar to Medicare Part B). And the $50 per day "average benefit" will only cover a small portion of the $60,000 per year most Americans pay right now for in-home care. Most people who want to protect their savings will still need to purchase long term care insurance to supplement the CLASS Act benefit.
The biggest problem we face is that most Americans still think that Medicare or their medical insurance covers the cost of long term care. The CLASS Act addresses this problem by making a very clear statement: You have to pay for your own long term care. You either have to pay for your own long term care by using your savings, the meager $50 per day CLASS Act benefit, long term care insurance, or a combination of all three.
Most of the ten million Americans who own long term care insurance, own it because they've seen friends or family have to spend down their assets before qualifying for Medicaid. The CLASS Act will help alert the rest of the country to the fact that they need to financially plan for their future long term care needs.
Scott A. Olson
http://www.LTCInsuranceShopper.com
I'd like to correct a few misconceptions about the CLASS Act which actually will likely boost sales of private long-term care insurance. That's because this really is a plan for those who can not health qualify for insurance. The new provisions (at least in the bill passed by Congress) require the plan be fiscally sound. As a result, you are likely to see premiums closer to $100+ a month (or $2,400 a year for a couple). One will still be able to get far better coverage on an independent basis. The real problem with CLASS is that it creates a new underfunded entitlement plan which won't become a burden on taxpayers for 10-to-15 years (a benefit for boomers … and a real tax liability for anyone 45 or under today).
Jesse Slome
Executive Director
American Association for Long-Term Care Insurance
Great read.
We've taken the perspective of applying and leveraging technology to try to ease this process. While we've heard from the perspective of older adults that they don't wish to be a burden, we've also learned that the caregiving process can actually be a collaborative experience that brings families closer when technology reduces the tactical tasks and anxiety that is so often associated with it. Specifically, when families have information and documents centralized and accessible, they tend to want to do more, learn more, and ask more questions because they have more time to do so. We would love to get more opinions from others on the application of technology to aid this process.
Best,
Todd Chu