This month is National Long Term Care Awareness Month. Based on thirty-five years working in the field of aging, I have reached some personal conclusions about long term care and its funding. Here goes.
Learning from my mom and dad's experience.
I grew up in the 1950s and 60s in a close-knit, hard-working family. My parents both worked full-time to pay the bills, send my brother and me to college while saving frugally for their own retirement nest egg. Still very much alive at 86 and 89, my mom and dad live in a retirement community in South Florida. I live 3,000 miles away with my wife and kids in California, while my older brother lives in New Jersey - near where we grew up.
Today, my dad has diabetes and heart disease and has been blind for a decade due to macular degeneration. While still sharp as a tack, and ready for a political argument 24/7, he can't drive, read or handle many of the normal activities of daily living without a full-time aide. My mom - who remains the "heart" of our family - also requires ongoing assistance. She has COPD - which means she must spend three hours a day on a nebulizer. In the past several years, she has had a heart bypass surgery, a hip replacement and is grappling with memory loss.
Around a decade ago, when it became obvious that living independently in their home was becoming difficult, my brother and I grew concerned because we saw that age and chronic disease were starting to take a deep toll. We knew that Medicare didn't pay for long term care and Medicaid was for the poor, so our anxiety was high. However, I was very relieved when my dad told me that they were going to activate the benefits of the long term care insurance policies they had bought five years before, to get the extra help they needed so they could continue to live independently.
The good news is they are currently living surprisingly normal lives in their own home, thanks to the services of their care coordinator as well as the terrific aide who comes to their house six days a week, helps manage their household, does the grocery shopping, prepares meals, takes them to their various doctors appointments, cares for them - and generally has allowed them to stay together in their home, just like they always wanted.
If not for their LTC policy, my folks (who have recently celebrated their 67th anniversary!) would most likely be living in some sort of institution - probably a nursing home. And because of their different conditions, they might have been forced into separate facilities. My brother would probably have given up his life in NJ to look after them, and my wife and I would probably be paying for their care which by now would have cost nearly $500,000 - a small fortune.
As a gerontologist, I know that paying out-of-pocket for eldercare can be very costly. The median cost for home care is $42,000/year and a private room in a nursing home costs on average $74,000/year (for information on the cost of care where you live, here's a helpful resource: www.genworth.com/costofcare). Some people have to sell all their assets to cover the cost of LTC - and many others become impoverished while paying for LTC expenses. I recently read how some social workers are advising elder men and women to divorce their spouse should their partner's health start to fail. By doing so, they can detach from the financial responsibilities of caring for their loved one - and have Medicaid pick up the tab. This is a shameful state of affairs.
My folks say that they purchased their policies so that they wouldn't be a burden on us - and while we would do almost anything for them, we are thankful for their proactive decision to purchase their LTC insurance years ago.
The Coming Caregiver Crunch
Over the past century, life expectancy has vaulted from 47 to 77....and it continues to rise. But, the longer you live - the longer you'll live. So a 65 year old today has an average life expectancy of nearly 85 years! For many, this is a terrific circumstance - more years to learn, work, play and enjoy time with those we love. However, with longer lives, there's also the increased possibility of health problems along the way. Nearly 70% of all people over 65 will need some long term care in the years ahead. And we're talking about our parents and soon us!
Today, three quarters of all care is provided informally by loving and supportive family members outside of hospitals, nursing homes and other institutions. This caregiving might involve grocery shopping, house cleaning or helping a loved one who is recuperating from surgery to bathe, dress or visit their doctor. Or, it might even require 24/7 care for a loved one with Alzheimer's.
But there will soon be a shortage of family caregivers for four reasons:
Long Term Care is not necessarily a comfortable topic...even for a gerontologist!
So, when my wife Maddy and I stopped to think about it five years ago, we considered what might happen to our lives if sometime down the road we needed extended care. While we realized that there were costs associated with purchasing LTC insurance, the potential financial and emotional costs to ourselves and to our children of not purchasing them were far higher. Although my folks bought their policies in their 70s, we decided to buy ours in our early 50s, when the rates are lower and the likelihood of qualifying is far higher. And, we also took advantage of the special discounts for couples. In addition, because we are small business owners, around ¾ of our premiums turned out to be tax-deducible.
After 35 years on the aging front lines, my personal rationale for why purchasing long term care insurance makes sense:
While I don't think everyone needs LTC insurance, I do believe that everyone should have a plan for how they're going to be looked after should they needed extended care, and how they're going to pay for it without burdening their family.
Some helpful resources:
I've just posted an audio recording for the media on this subject, which you might find helpful at www.agewave.com/Dychtwald_media_briefing_on_LTC/. And, I have found the following websites useful as resources to help craft a satisfying long term care plan: www.longtermcare.gov, www.caringtalk.com, and www.ResearchLTC.com.
I'd welcome all of your thoughts, ideas and questions about these themes.
Ken Dychtwald, Ph.D. is a psychologist, gerontologist and author of sixteen books on aging, life transitions, and retirement-related issues including Age Wave, The Power Years, and his new book, With Purpose: Going from Success to Significance in Work and Life (with Daniel J. Kadlec, Collins Life; 3/09). The founding CEO of Age Wave, he lives with his wife and children in the San Francisco Bay Area.
ConsumerReports.org - Long-term-care insurance 11/03: Long-term ...
Most people are aware that Boomers represent the largest demographic of residents in the U.S.. It should also be no surprise that most Boomers will hit retirement age within the next 5 years, reaching retiree totals that will peak in 10. When this happens, The Dept. of The Census says the population of US residents over 65 will exceed the number of US residents under the age of 5 for the fist time in history.
Recently, America has taken to depositing it's elderly into nursing homes, and similar facilities as soon as caring for them becomes cost prohibitive or socially obtrusive. This places a tremendous burden on facilities to meet the demand of bed space, and wastes space in medical facilities with residents who don't need high levels of constant medical care.
Unfortunately, we aren't close to accommodating all the seniors requiring adult day services which enable them to stay home, living independent lives with their families for as long as possible, and we are certainly not prepared to accommodate the massive number of retiring Boomers looming on the horizon.
This, and the need to improve the quality and level of care available, made me decide to do something about it. It is my sincerest wish that my prototype facility, The Golden Years, and the facilities which follow, will begin to satisfy some of those needs.
Sincerely,
Kurt
The big problem this article ignores is city design. The U.S. continues to build its cities so old folks like those described here are isolated, and, because they can't drive, are socially "disabled." That's suburban sprawl....
It is a comprehensive loss, too. Because driving is, by design, the only connection between things, the U.S. continues to be entangled in overseas resource wars. Peak U.S. oil production was in 1971, when we imported 30% of domestic consumption. Now we import 70% of our oil.
Imagine what it would be like to build neighborhoods where shopping, work and living spaces were within a walk of one another! Imagine what it would be like to build roads that invited pedestrians rather than excluding them. (True fact: In the Sacramento region the estimate of the cost to simply connect all the disconnected sidewalks: $50 million).... Imagine the possibility of working transit, rather than the third-rate orphan step-child subsidized systems that roll around a bunch of empty buses because riders simply can't walk to the stops!
Imagine the absurdity that is suburban sprawl, and the actual, if not moral, bankruptcy it induces as the population ages.
Why have our tax dollars go towards placing our older citizens in nursing homes at $74K/year (via Medicaid - after they've become impoverished) - when we can spend nearly half that amount to maintain a high quality of life for both an older and younger American?
I know many 20-, 30- and 40-somethings who would love to be a caregiver for $40K/year!
Great article and very timely. As you noted, life expectancy continues to rise. Not only are people living longer, but people are also living longer with long term care needs. While Long Term Care Insurance is probably the best solution for the first few years of a disability, seniors need to realize that a Long Term Care Plan is another invaluable tool for the senior. What happens when the senior exhausts their LTC policy? I'd like to see a blog post on the benefits of using an elder care attorney to create and implement a Long Term Care Plan either alone (when it's too late for LTC insurance) or in conjunction with a LTC insurance policy. There are still many options for seniors when they are willing to plan in advance. I'm glad that you are out there promoting this topic.
Eric Goldberg
As I wrote about in my blog several months ago (What's Wrong with Our Healthcare System and How to Fix It) , with the age wave coming, we must:
1) upgrade our focus on scientific research that could prevent or eliminate some of the horrible diseases of aging - such as Alzheimers;
2) elevate geriatric competencies among our physicians and nurses - who have received almost no training in geriatric-related medicine (only 10% of the medical schools in America have departments of geriatrics);
3) we need to take far more responsbility as citizens for living healthy lives. Let's face it - we're a shamefully gluttenous culture and then we get angry at healthcare providers if they can't magically make us young again.
4) we need to create a true continuum of care that is just as effective at dealing with chronic illness as acute illness - and I'd strongly recommend that we take far beter advantage of emerging information technologies to do so; and
5) we must establish palliative and hospice care as the model for a more humane and less costly end of life care.
(see http://www.huffingtonpost.com/ken-dychtwald/the-biggest-problem-with_b_216446.html - for the whole blog and commentary)
And while society's wheels are trying to turn toward solutions (at a frustratingly twisted pace), I strongly believe that everyone should have their own plan for how they're going to handle LTC, should they need it!
Ken
Laurie Orlov
All the best,
Ken
Wishing you all of the best,
Ken
7:11pm
Alexandria, VA
LTC insurance is a good idea.
I was recently a caregiver for an 86-year-old lady in Miami who wanted to stay in her home.
She had a hard time financially even though she didn't pay me much for the 24/7 care (I got 20hours off per week.)
7pm
Alexandria, VA
Good idea to get the LTC insurance.
I recently worked as a caregiver for a lady in Miami who didn't want to leave her home and I think it was quite a financial strain for her even though she didn't pay me much for the 24/7 care (I got 20 hours off per week.)
Finding quality caregivers, and resources is one issue... how to pay for them is yet another. We've attempted to help with the former at The Senior List.com. As for the latter, LTC insurance is an excellent way to mitigate the (lack of) attention this issue might get from any pending healthcare legislation, and is a great solution for many Americans today.
One report from the Commonwealth Fund (commonwealthfund.org) raises concerns about the ability of the U.S. healthcare system to cope with the needs of low income and middle income boomers (health needs, unstable insurance coverage, high medical costs, and debt). This caregiver crunch is a huge issue, and in the overall context of healthcare for aging Americans, it raises a whole spectrum of additional issues that we need our brightest minds to tackle. I had the pleasure of meeting Ken earlier this year, and he is undoubtedly one of those bright minds leading the charge!
Chris
The Senior List ®
http://www.theseniorlist.com
You bring up some very important points that I'd liek to build on.
Years ago - nearly all long term care was provided in nursing homes...and so when Medicaid was set up - it was oriented almost entirely toward helping lower income people be cared for in nursing home.
However, most people would much prefer to be cared for in their homes (I know I would).....and the LTC insurance industry has learned this lesson. If you look at the stats, currently 42% of LTC insurance goes to home care, 30% goes for nursing home care and 28% goes for assisted living.
And, as you mention, more and more home-based care services are emerging, partly in response to the fact the multiplying numbers of people are getting this serevice paid for with the LTC insurance that they have bought. I expect this trend to continue.
All the best,
Ken
Our health care debate went dead silent regarding elder care. But much more devastating to millions of families, including my own, is what I call the long “In Between Stage.”
Most of the major diseases today turn into chronic conditions. And with the tsunami of dementias approaching, as Boomers begin turning 64 next year, we can’t wait for them to run out of denial.
Our system is set up for exactly the results it gets. It excels in treating people with acute illness in the hospital, rewarding high-tech medicine and high priced-specialists, but it mostly fails in treating those with chronic or serious illnesses
who are sent home quicker and sicker to family members with no professional training, no financial support, and rarely any respite.
There is a devastating disconnect between acute care and long-term care.
I wish I had known sooner about palliative care. Medication is allowed and there is no deadline for how long one is expected to live, as there is with hospice. Many of the chronically ill live for years, even a decade or more.
The most humane aspect of palliative care, in my experience as my husband's caregiver, was this: it returns the power of choice to the patient. The geriatrician actually asks the patient what are his or her goals for this period of life, and then adapts the treatment, or lack of treatment, to those life goals.
Approximately 20% of baby boomer women had no children and so, if they find themselves single, unless they turn to siblings, they will have no family caregivers to turn to in their maturity should they need help. Of course, I also believe that in the years ahead, more and more women will form very potent social support groups - maybe even choosing to live together - as an alternative to the more traditional Noah's Arc setup.
I also have to believe that single, childless women would find LTC insurance of particularly high appeal - as it would guarantee care in a setting of their choosing, without having to scramble to find friends or nieces/nephews to provide the care.
Thanks - for the heads up about this CR
All the best,
Ken
We can pay now, or we will pay later! And the younger you are, the lower the premiums .