Guide to Long Term Care Planning
July 30, 2014 | by Thomas Day
Family Caregiving for the Aged
Aging seniors and their family caregivers often become overwhelmed by the myriad of issues they face as their health declines and they lose their ability to remain independent. Losing independence generally happens gradually, but can come quickly without warning.
When health declines, less serious needs generally arise first. These may include maintaining a household, preparing meals, shopping, paying bills, visiting the doctor, and managing medications properly. Generally, these needs are met by the spouse, adult children, or close friends of the elderly. More than 65 million people in the United States provide help for free to an aging family member or friend and spend an average of 20 hours per week providing this assistance.1 Although somewhat manageable at first, family caregiving over time can produce a serious amount of stress and financial burden. The AARP Public Policy Institute2 reports that:
Caregivers can suffer loss of wages, health insurance and other job benefits, retirement saving or investing, and Social Security benefits - losses that hold serious consequences for the "career caregiver." A reported 37% of caregivers quit their jobs or reduced their work hours to care for someone 50+ in 2007 (70% of working caregivers suffer work-related difficulties due to their dual caregiving roles).
Formal Care for the Aged
The need for eldercare (or long term care) will likely happen to 3 of every 5 people. Accident, illness, dementia, stroke, depression, disease, or frailty will cause the aged to require personal care from others. Long term care refers to a broad range of supportive medical, personal and social services for people who are aging or unable to provide for their own needs for an extended period of time. These needs may include help moving about, dressing, bathing, eating, medicating or tending to the wants of nature.
Approximately 15 million individuals (over 65 in the U.S.) are currently receiving various types of formal eldercare from nursing facilities, assisted living, alternative residential care places, or home care services. The elderly and their informal caregivers often turn to these types of care providers when professional care is required and/or the burden of family caregiving has become too great. Formal care services are projected to be used by over 25 million people by 2050.3
Lack of Planning for Long Term Care
Over the years, the National Care Planning Council (NCPC) has spoke with many families in a crisis mode, struggling to find funds, services and ways to preserve assets for loved ones needing long term care. Nursing home care, for example, is extremeley expensive (the national average median cost of one year in a private nursing home room is $74,2084). When statistics tell us about 70% people will need long term care, it's appalling that less than 1/3 of americans over the age of 50 chave begun saving for the costs associated with long term care and only around 8 million americans own private long-term care insurance.
Funding long term care and understanding the resources available to help can be an invaluable asset to a family or spouse who are currently providing care or may eventually have to provide help for a loved one. Without preparation, long term care can wipe out a lifetime of savings and destroy equity in a home.
People generally think of five basic ways to pay for long term care: out-of-pocket, private long term care insurance, Medicare, Medicaid, or VA Benefits for veterans.
Research provided by the NCPC found that only around 16% of long-term care services are covered by the government. The other 84% are provided free of charge by family caregivers or provided by services paid for by long term care insurance or out-of-pocket by families or from those receiving care. The bulk of government care services are provided only after a care recipient has depleted all of his or her savings. The NCPC also estimates that at any given time approximately 22% of the population over age 65 is receiving some form of long term care support.
According to an Nancy L. Johnson (R-CT), Chairman, Subcommittee on Health of the Committee on Ways and Means,5
"...In 2004, according to CBO, approximately $135 billion was spent on long term care for the elderly. Sixty percent of this amount was financed through Medicaid and Medicare, one third through out-of-pocket payments, and the remainder by other programs and private insurance. This funding excludes the significant resources devoted to long term care by informal caregivers (primarily spouses and children). The CBO estimates that informal care is the largest single component of long term care...."
In conjunction with the spending estimates above, the NCPC has estimated the equivalent cost of care provided for free by informal caregivers to a staggering $313 billion per year in the U.S. This is almost four times the amount the federal and state governments currently pay for all long term care services nationwide. It would bankrupt the federal and state governments if they had to pick up the cost of these free services.
Guide to Long Term Care Planning
The "Guide to Long Term Care Planning", an online resource developed and maintained by the NCPC, was created for the purpose of helping aging seniors and their families address and fund these difficult issues.
This free, noncommercial source of information is the largest and most comprehensive work on long term care planning ever produced. Originally written to support the Long Term Care Consumer Awareness Campaign from the Department of Health and Human Services, this public-service, online publication contains over 670 printable pages including 96 charts and graphs. It is written by eight experts and organized into 35 chapters. The URL for this online publication is found at www.longtermcarelink.net/a13information_guide.htm.
Other books written by the NCPC on Eldercare, Medicaid, and Veterans Benefits are available to help aging seniors and their families.
1 - The National Alliance for Caregiving and AARP (2009), Caregiving in the U.S: National Alliance for Caregiving. Washington, D.C.] - Updated: November 2012
2 - AARP Public Policy Institute 2008: Valuing the Invaluable: The Economic Value of Family Caregiving
3 - The National Association for Home Care & Hospice
4 - Genworth Financial Cost of Care Survey, conducted by CareScout, April 2009
5 - April 2005 Congressional Hearing Press Release from Congresswoman Nancy L. Johnson (R-CT), Chairman, Subcommittee on Health of the Committee on Ways and Means