Many seniors will turn 80 in 2025, burdening family members. Most people live longer because of medical research and technological advances, opting for non-institutionalized living. The reality is that families have been struggling to provide the best care for their aging parents, with a limited range of options available to most.
Howard Gleckman, a senior fellow at the Urban Institute, emphasizes that society must develop a plan to handle aging Americans’ growing demands. The higher the number of seniors who require health needs, the more the health and social system will be stressed to meet their needs. The quality of care available and the number of professionals to meet those needs are crucial issues for families of seniors to consider.
55% of Americans will have low to at least moderate long-term care (LTC) needs for medical reasons, according to The Center for Retirement Research at Boston College. Of this population of Baby Boomers, 25% will have medical conditions requiring more intensive healthcare, possibly involving stays in LTC facilities. Many seniors live in areas with a relatively small range of options available for more intensive healthcare needs.
These statistics provide helpful insights:
The Urban Institute’s analysis found at least 70% of Baby Boomers will need LTC after reaching 65. These needs may range from skilled nursing facility stays or home health care covered by government programs to assisted living that requires private funding. Some of these seniors will be living with multiple conditions requiring care.
In 2019, private nursing home rooms averaged $102,000, according to Genworth Insurance. This price tag exceeds what the average family can afford to pay. Without funding from private sources, many will lack recourse to this type of care.
According to Insured Retirement Institute, almost 50% of seniors lack funds for retirement. Most of these seniors have less than $100,000 in savings, which will not go far with chronic health conditions requiring a lot of care. Seniors’ lifetime healthcare needs can easily exceed this amount.
Long-Term Care for Baby Boomers
Access to needed health care and social services will only be available for some Baby Boomers turning 80 in the next two years. The burden will be the heaviest on their children. In some cases, grandchildren or other relatives may act as caregivers.
Most LTC providers are spouses, children, and other family members who may have to balance caregiving responsibilities with job responsibilities and raising children. Daughters are more likely to provide care than sons, presenting additional challenges to those that women already face in the workforce. Relatively few jobs provide the type of flexibility that many need to balance caregiving responsibilities.
As Baby Boomers have fewer children than their parents, there will be fewer informal caregivers to shoulder the burden. Solutions that involve caregivers outside the family will need to be part of the consideration. Payment for these services is a source of concern for many families.
There is a growing need for more expensive formal care to cope with the demands of seniors with chronic conditions. This might mean in-home care or institutionalized settings like nursing homes. Resources for these options may vary depending on the level of healthcare coverage available.
Studies on Baby Boomer Health Care
Gal Wettstein, a Center for Retirement Research at Boston College senior research economist, indicates that the need for LTC usually comes in a person’s mid to late 80s. Even though Boomers have not reached that age, many consider that need a severe concern as this demographic ages. Some Boomers develop LTC needs well before reaching this typical age.
Data from the Health and Retirement Study at the University of Michigan, one of the longest-running studies, finds that 20% of Americans will not require long-term care services. However, some of this group may still consider LTC needs planning in case their health needs change. Changes to such plans may arise very unexpectedly.
This study found that 33% of retirees lack resources for basic long-term care needs. Only one in five could afford four years or more of LTC needs for the most severe conditions. Paying for these needs could exhaust a retiree’s resources very quickly.
Medicaid and Paying For LTC Services
Public health payment systems must be better equipped to cope with future demand. Medicare’s system does not pay for long-term care services except for recovery from acute health problems. Private LTC insurance is out of reach for many.
Medicaid pays for long-term care only for those who have exhausted their financial resources or have none and usually only pays for nursing homes with semi-private rooms. Nursing homes are incredibly unpopular for almost everyone, with most seniors having a strong preference for in-home care.
Some states, notably California and Washington, have what is known as “Medicaid waiver” programs. These programs have been designed to fund community and in-home-based care that many seniors prefer and find more humane. Such programs could serve as models for other states that want to control senior care costs.
These programs are more popular overall than the present system, which places a higher priority on funding nursing homes. In many areas, nursing homes are the only viable option for rehabilitation. A stay in a nursing home for a patient unreceptive to this setting poses social problems for many seniors and families.
David Yeske, the founder of Yeske Buie and a certified financial planner, does not see a policy response for this issue coming to light soon. Political polarization is cited as the reason for this impasse. Yeske predicts that individuals and families will be most responsible for solving the problem.
During the 1990s and the first decade of the 21st century, long-term care insurance carriers severely mispriced premiums, resulting in premium inflation or the carriers leaving the business altogether. Wealthier Americans often buy these policies to hedge against future high-cost care needs. However, poor and lower-middle-class Americans lack this luxury.
Long-term coverage policies have stricter terms for how long the coverage lasts and how much coverage policyholders receive. Compared to 20 years ago, the number of long-term healthcare coverage policies available is a small fraction of the previous numbers. This trend suggests that increasingly fewer of these policies will be available.
Yeske points out that paying $100,000 annually will exhaust almost any retirement plan. The financial planner works with Boomer and younger clients to provide helpful information about LTC planning. As part of his work, he helps give clients realistic ideas about how to plan their retirement years.
Yeske’s strategy includes identifying the profitable costs and resources available and assessing alternatives. As much as he emphasizes the value of financial planning, he acknowledges that family members have tough decisions to make.
The Everyday Reality For Families
Beatrice Egger, whose husband broke his hip, is an example of a senior worried about care. Beatrice is a 91-year-old retired teacher, and she worries when her husband, William, a 90-year-old former principal, showers or she helps him dress.
William is tall, unsteady on his feet at times, and prone to falls. Although the couple lives in an Issaquah, WA, retirement home with aides who can help him get back up, Beatrice stays concerned because the aides cannot always be available.
A home health care aide during the day, if affordable for Beatrice and William, would provide the couple with a safety net in the form of a younger person to help. The couple’s pensions have given them a reasonable standard of living in their retirement community.
However, there is a genuine fear that Bill could suffer a fatal fall. If Beatrice no longer had Bill’s pension, the retirement community might not be affordable, and she might have to seek options that accept Medicaid.
Beatrice is part of the 43 million unpaid caregivers in the U.S., which will grow as Baby Boomers age. Scott Williams of Embracing Carers cites family caregivers as necessary in keeping the social and health systems from getting overwhelmed.
Embracing Carers conducted a study in 2017 that addressed some common unpaid caregiver issues. Almost half of the family caregivers live with depression, and 45% of caregivers self-neglect their health needs, increasing their risk of illness.
In 2002, Stanford University did a study that found 40% of caregivers for Alzheimer’s and dementia patients die before their loved ones. The most common cause of these deaths is stress-related disorders.
Another factor contributing to the problem is a need for more workers to fill paid caregiving jobs, which usually need better work conditions and adequate pay. Home, health, and personal care aides are two of the most rapidly-growing jobs, according to the Bureau of Labor Statistics, with as many as 1.2 million new jobs by 2026.
A paramount concern that many have is who will fill these jobs, which many Americans have yet to desire to take. An example is the 74% turnover rate in nursing homes.
Decision-makers must look closely at how other countries, such as Austria, have addressed their senior care issues for fresh ideas. Addressing America’s senior care crisis involves a degree of innovation and a clear vision of what senior care in America should look like.