Have you had “the talk” with the older adults in your life?
No, not the one about the birds and the bees. The one about long-term health care plans.
If you haven’t gone there, you really need to or you’ll risk financial ruin and a poor end-of-life experience for a loved one, experts warn.
In a decade, older adults are projected to outnumber children for the first time in U.S. history, according to the Census Bureau. There will be 77 million people ages 65 and older in 2034, compared with 76.5 million under 18, it said. By 2060, nearly 1 in 4 Americans will be 65 and older, the number of 85 and over will triple, and the country will add a half million centenarians.
With this expected surge, America will probably see greater demand for health care, in-home caregiving and assisted living facilities. But the cost of that care is staggering. The median price tag for assisted living is $54,000 a year, a private nursing home room costs $108,405, and basic home care aid for five days a week, eight hours a day runs $56,160, according to a Genworth Cost of Care Survey from 2021.
According to National Health Expenditure projections, home health care spending will increase 83% from 2018 to 2027, while spending for nursing homes and other continuing care retirement communities increase 58%.
“This could be the next public health crisis,” said Michelle Griffith, senior wealth advisor at Citi Personal Wealth Management.
Medicare and supplemental insurance, or Medigap, pay only for short-term acute care, typically for injuries, illnesses, urgent and emergency needs, and for recovery or rehabilitation after surgery.
They don’t cover long-term care because it isn’t considered medical care. Instead, it’s categorized as “a range of services and support for your personal care needs” to assist with everyday living, according to Medicare.gov.
Only Medicaid will pay for nonmedical, long-term nursing home care, indefinitely as long as there’s a need. But Medicaid is only for people with limited finances, which leaves a huge swath of Americans to fend for themselves.
If you’re rich, paying out of pocket might be OK, but most Americans aren’t so lucky. Half the population is middle-income, according to Pew Research Center using 2021 data.
“The forgotten middle,” said Narda Ipakchi, vice president of policy at The SCAN Foundation, an independent public charity focused on care for older adults. “They’re particularly at risk. They don’t qualify for Medicaid and are paying out of pocket, which is prohibitively expensive.”
Right now, friends and family are picking up the slack. More than 50 million U.S. adults are unpaid caregivers to family, friends, and neighbors, The SCAN Foundation said. They’re the “invisible backbone” of U.S. health care, each spending roughly $7,000 a year on out-of-pocket costs related to caregiving, such as household and medical expenses, it said. AARP also estimated their unpaid work was worth $600 billion a year.
“If we don’t keep these millions of people who do free care for loved ones at home, there’s no way our health care system can cover their absence,” said Randy Wolfe, one of those unpaid caregivers who took care of his aging parents and who himself is a senior, soon to be 70 years old.
