Thanks to incredible advances in medicine and a collective shift toward healthy living, people are living longer than ever. According to KFF Health News, the number of Americans aged 85 and up grew more than six times faster than the overall population between 1960 and 2021. By 2050, it will triple to nearly 19 million.
That would be good news if the country had a reliable system for long-term eldercare, but it does not — and in nearly all cases, families must shoulder a financial burden that all but the wealthiest households simply cannot meet.
“While people are living longer, they are not necessarily living better,” said Candace Dellacona, an elder law and estate planning attorney with the Offit Kurman law firm in New York City. “Diseases of the aged, like Parkinson’s, Alzheimer’s and dementia, mean that long-term care is an integral part of what it means to live a longer life. Because many of our older loved ones are living longer than they ever thought, they simply have not saved enough money to cover the cost of long-term care.”
Millions of seniors who need help with primary tasks like eating, getting dressed, walking and bathing can’t afford the 24-hour care they need. According to A Place for Mom, the average cost for a semi-private room in a nursing home is about $8,000 per month — $9,000 a month for a private room.
“The national median for a private room in a nursing home now tops $100,000 per year,” said Sleep Bubble lead writer Dr. Naheed Ali, an M.D. who completed Harvard Medical School’s lifestyle medicine training in 2012 before obtaining a Ph.D. in holistic health. “Even hiring in-home health aides can run $50,000 or more annually.”
Six-figure expenditures are the rule, not the exception.
“Individuals 65 or older have an almost 70% chance of needing some type of long-term care service or support, and while the average cost of long-term care for one person is $180,000, that doesn’t necessarily paint an accurate picture of how much a long-term care event could actually cost a family,” said Jeff Beligotti, vice president and head of long-term care solutions at New York Life. “20% of today’s population of those 65 or older will need long-term care support for over five years, and according to New York Life’s Cost of Care data, in-home care costs an average of $60,570 a year for 40 hours of help per week and a stay in a one-bedroom assisted living care facility averages $63,337 per year. The average cost of a year’s care in a private Medicare-certified long-term nursing home room totals $116,577.”
Going Broke Is the Key to Getting Help
If you’re expecting Medicare or private insurance to chip in for any of that, you’re in for a very unpleasant surprise.
“When it comes to preparing for these costs, many people are surprised to learn that Medicare does not cover long-term care,” said Beligotti. “Medicaid does cover some long-term care services, but you need to spend down most of your assets to qualify.”
In most states, middle-class people won’t get help from Medicaid until they empty their bank accounts, sell their property and prove they’ve gone broke paying for eldercare on their own — and very few are immune. An Urban Institute analysis found that more than four out of five middle-class people 65 and older who need long-term care for five years or more will eventually enroll, including nearly half in the upper-middle-class with more than $4.75 million in lifetime earnings.
There are no easy solutions for middle-class families, but early preparation can mean the difference between getting through it and going broke trying.
“The biggest mistake that people make when it comes to preparing for the cost of elder care is putting off making an actual plan to cover the costs,” said Margaret Pendergrass of Roswell Grief Counseling, a licensed clinical social worker and a certified grief counselor who specializes in supporting caregivers. “Many clients I have worked with hold incorrect assumptions about elder care, such as believing that Medicare will cover whatever they need or assuming they will always remain healthy and able to stay at home. Procrastination in learning the facts is called avoidance coping. When the facts are uncomfortable or anxiety-producing, we will consciously or unconsciously seek to avoid or put off learning all of the information. This way, it feels less real and we can hold onto hope that it will work out. Many people wait until a hospital admission makes additional care necessary before they think about things like in-home care or elder care facilities. Then there is no time to do thorough research and choose the most cost-effective option that still meets their needs.”
No matter how diligently they plan, most middle-class families will never be able to save enough, which leaves long-term care insurance as the only plausible option for most.
“This type of insurance is specifically designed to cover long-term services and supports, including personal and custodial care in a variety of settings such as your home, a community organization, or other facilities,” said Mike Breslin of ProMed DME, a durable medical equipment executive specializing in Medicare, Medicaid, payor audits and appeals.
But don’t expect any bargains there, either. According to KFF Health News, only “a minuscule portion of families buy long-term care insurance,” mainly because providers enacted enormous rate hikes after underestimating how many people would actually use it.
“The long-term care industry has undergone radical changes over the past couple of decades,” said Brian Gordon, president of Gordon Associates Long Term Care Planning. “Insurance companies found out they weren’t charging large enough premiums, and, because the lapse rate was much lower than they expected, the cost of care was higher. Today, there are fewer carriers in the marketplace, meaning higher premiums.”
According to the American Association for Long-term Care Insurance, the average annual premium for a 60-year-old man is $1,200 — $1,960 for a 60-year-old woman. Yes, $100 or $163 per month is a lot — but not compared to $297 per day for a private nursing home room.
With few options and insufficient funds, millions of Americans attempt to care for aging parents or other loved ones alone and in their own homes, part of what Dellacona calls “a rediscovery of intergenerational living.”
“Meaning, a senior loved one may sell his or her own home and move in with younger relatives,” she said. “This provides a built-in advocate and someone who might be able to pitch in for the care obligations.”
But “pitching in” is often the most taxing and expensive option of all.
“In reality, around-the-clock, long-term care services in the home cost more than living in a nursing home, assisted living, or memory care,” said Arvette M. Reid, client services director of Lifecare Affordability Plan. “Most people think staying home is cheaper than moving to a community, but they are only thinking about minimal help and not when they need 24 hours of care. And all of these expenses are out-of-pocket costs typically not covered by Medicare and Medicaid.”
Even so, it’s the only plan for those without a plan.
“A lot of people hope to rely on unpaid family caregivers, who provide care worth $470 billion a year and are keeping millions of people out of long-term care facilities,” said Gordon. “Even if there’s a spouse, child or other family member who’s willing to help a client with long-term care, it’s still not ‘free.’ Caregivers sacrifice work hours and personal savings to care for loved ones.”
The hard truth is that no matter how well you plan, long-term care is accessible only to the rich and the poor. Middle-class families simply can’t afford the cost for sustained periods and don’t qualify for assistance until they’ve spent themselves into poverty.
“Currently, there is no way for long-term care elder care to be affordable for the middle class,” said Barbara Huelat, a prominent dementia caregiving expert and author of “Taming the Chaos of Dementia: A Caregiver’s Guide to Interventions That Make a Difference.”
She concluded, “You need to be wealthy or with long-term care insurance, which is extremely expensive, to afford elder care. There is nothing for middle-class Americans. The system and Medicare need to change to make it affordable. Until then, the only recourse we have is care provided by family or to expend resources until one runs out of money and becomes eligible for Medicaid. The best we can do is to be part of the change.”
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