Managing the Impact of Long-Term Care Needs and

Expense on Retirement Security Monograph

The 65 Plus age Wave and the Caregiving Conundrum: The often Forgotten Piece of The Long-Term Care Puzzle

By Sandra Timmermann, ED.D.

Copyright 2014 by the Society of Actuaries.

All rights reserved by the Society of Actuaries. Permission is granted to make brief excerpts for a

published review. Permission is also granted to make limited numbers of copies of items in this

monograph for personal, internal, classroom or other instructional use, on condition that the foregoing

copyright notice is used so as to give reasonable notice of the Society’s copyright. This consent for

free limited copying without prior consent of the Society does not extend to making copies for general

distribution, for advertising or promotional purposes, for inclusion in new collective works or for resale.

The 65‐Plus Age Wave and the Caregiving Conundrum: The Often Forgotten Piece of the Long‐Term Care Puzzle SandraTimmermann,Ed.D. It’sdifficulttodiscusslong‐termcare(LTC)needsandexpenses

withoutfactoringinthearmyoffamiliesandindividualswhoprovide

thecaretothegrowingnumbersofpeoplewhorequireit.Caregivers

provideawiderangeofservicesandassistanceforpeoplewhohavea

widerangeofneeds.Mostcaregiversarefamilymembers,andothers

arepaidbyagencies,byfacilities,orbyfamilies.Dependingonthe

situation,theymaysimplyhelpoutwithdrivingandgroceryshopping;

or,atamoreintenselevel,theymaybeneededtoprovidehands‐oncare

withactivitiesofdailylivingsuchasgettingdressedandeating.They

mayalsoprovidecompanionshipandsupervisionforpeoplewith

Alzheimer’sdiseaseordementiawhocannotbeleftalone.

Caregivingandwhatitentailsareoftentheforgottenlinksinthe

LTCdiscussion,andtheissuessurroundingthemneedmoreattention.

Onereasonwhycaregivingissoimportantisthatitisanintegralpartof

theLTCdeliveryandfinancingpuzzleandneedstobeincorporatedinto

anyproposedLTCsolution.Severalintertwinedfactorsarenow

bringingtheseissuestotheforefront,andfourtrendsstandout:

1. Familiesprovidethelion’sshareofcare,buttheyarestretched

asaresultofthecaretheyprovide,notonlyphysicallyand

emotionallybutalsofinancially.Familymembersjugglework

andcaregiving,figuringoutthebestpathfortheirlovedones

andprovidingcarewhileholdingdownajob.Manyspend

moneyoutoftheirownpocket,orleavetheworkforce

prematurely,impactingtheirownretirementsecurity.

2. Theaging‐in‐placemovement,basedonthepremisethatmost

peoplewouldprefertogrowoldintheirhomesand

communitiesratherthanmoveintonursinghomesorother

facilities,hasgainedtractionandwillcreateagreaterneedfor

caregivers.Agingathomeandreceivingcaretherearenotonly

preferredbythepublic,butalsohavegainedsupportfromthe

agingfield,backedandpromotedbythegovernment.The

expectation(perhapsafalseassumption)isthatitwillallowa

betterqualityoflifeforolderpeopleand,atthesametime,will

reducegovernmentexpenditurespreviouslydirectedto

nursinghomeoccupancy.However,theinfrastructureand

fundingonthecommunitylevelaren’ttheretoprovidetheLTC

andsocialsupportthatwouldalleviatetheburdenonfamily

caregivers,createcaregiverjobs,andmakethisideafully

operational.

3. Thereisashortageofpaidcaregivers—thepersonalcare

assistants,theCNAs,thehomehealthaides,theLPNsand

otherswhodothedifficultdailyworkofcustodialandsemi‐

skilledcare—andthesituationisprojectedtoworseninthe

nearfuture.Thejobsarelow‐paying,rarelyhaveacareer

ladder,andarephysicallyandemotionallyexhausting.While

manyofthosewhodothisworkarecompassionateandcaring,

theturnoverishighandthepotentialforelderabuseandfraud

isalwayspresent.Familymembersoftenhavetostepindueto

thedifficultiesoffindingadequatepaidcarefortheirloved

ones.

4. LTCcostscontinuetoriseatasteadyrate,butfamilieshave

notpreparedsufficientlyforthepossibilitythattheymayneed

care.LTCinsurancepenetrationcontinuestobelow,leaving

manyinthemiddlemarketwithlittlechoicebuttospend

downassetsandcobbletogetheracareplan,andrelyontheir

familytofinancetheircareout‐of‐pocket.

Theconvergenceofthesefourfactorsiscreatingaperfectstorm,

notonlyforthecarerecipient,butalsoforthefamilieswhodotheirbest

tocarefortheonestheylove.Thepatchworkcaregivingsituationis

symptomaticofbiggerLTCissuesahead.Boomersarenowintheir50s

and60s,caringfortheirparents.Itwon’tbelongbeforetheymoveinto

oldageandfindthemselvescaringforaspouseorpartner,orneeding

carethemselves.Thetimeisrightfornewthinkingandnewsolutions.

1.TheCaregivingBackbone:It’sAllintheFamily

TheSituation

Thefamily,howeverdefined,continuestostepuptotheplate

whenitcomestocaregiving.Whilesomeclaimthattheyounger

generationsaremorecallousabouttheirlovedonesthanearlier

generationsweretowardtheirparentsandotherlovedones,recent

researchindicatesthatfeelingsofresponsibility,concernandlove

remainstrong.1BoomersandmembersofGenXandGenYexpectto

1MetLifeMatureMarketInstitute,Multi‐GenerationalViewsonFamilyFinancialObligations:AMetLifeSurveyofBabyBoomersandMembersofGenerationsXandY,January2012:https://www.metlife.com/mmi/research/mulit‐generational‐

helptheirparentsastheyage.Infact,whenaskedhowmuchofa

responsibilitydoyoupersonallyfeelabouthavingaparentlivewithyou

ifhe/shewasnothealthyenoughtolivewithoutsomecaregiving,58

percentindicatedstrongresponsibilityand26percentmoderate

responsibility,withonly15percentindicatingnoorslight

responsibility.Theyarealsowillingtohelpoutfinancially.

Thenumberoffamilycaregiversissurprisinglylarge.65.7million

caregiversmakeup29percentoftheU.S.adultpopulationproviding

caretosomeonewhoisill,disabledoraged.2Researcherscalculatethe

economicvalueoffamilycaregivingat$450billionandrising.3Most

adultchildrenareworking,andmanyliveatadistancefromtheir

parents.Thisputsacarerecipientatrisk,oftenlivingalonewithno

consistentcareproviderorforcedtomoveprematurelytoacare

facility.

Caregivinghasahiddenimpactontheemployerintermsoflost

productivity.Thetotalestimatedcosttoemployersrangesfrom$17.1

billionto$33.6billionduetocaregiverabsenteeism,crisesincare,

workdayinterruptions,unexpectedtimeoff,unpaidleave,reductionof

views‐family‐obligations.html#findings.2TheNationalAllianceforCaregivingandAARP.CaregivingintheU.S.,NationalAllianceforCaregiving,2009(UpdatedNovember2012):https://caregiver.org/selected‐caregiver‐statistics.

3AARPPublicPolicyInstitute,FactSheet,ValuingtheInvaluable:2011Update,TheGrowingContributionsandCostsofFamilyCaregivingin2009:http://assets.aarp.org/rgcenter/ppi/ltc/fs229‐ltc.pdf.

hours,andreplacementcosts.4Amorerecentsurveyestimatesthatthe

U.S.economyloses$25.2billionperyearinlostproductivityof

caregivers.5And,perhapsmorecompelling,asemployerslookforways

toreducerisinghealthcareexpenses,astudyreportsthattheestimated

averagehealthcosttoemployersis8percentmoreforthosewith

eldercareresponsibilitiesthanfornon‐caregivingemployees,costing

U.S.business$13.4billionperyear.6

Forthecaregiversthemselves,thefinancialimpactisgreaterthan

meetstheeye.Somewhatolderdataindicatethattheaveragefamily

caregiverforsomeone50yearsorolderspends$5,531peryearonout‐

of‐pocketcaregivingexpenses.7Manyofthosewhoareprovidingcare

decidetoleavetheworkforceearlyorreducetheirhoursasthe

expensesandstressappeartooutweighthebenefitsofworking.

Researchindicates,however,thatthereisasignificantimpacton

individuallostwealth.Conservativeestimatesshowthatcaregiversfor

agingparentslose$303,880overalifetime,factoringinlostwages,

savingsandSocialSecuritybenefits.Thefigureisjustthetipofthe

icebergasitdoesnotincludemoniesthatmighthavebeenaccumulated

4MetLifeMatureMarketInstituteandNationalAllianceforCaregiving,TheMetLifeCaregivingCostStudy:ProductivityLossestoUSBusiness,2006:www.maturemarketinstitute.com.5PfizerandReActGallupPoll,July11,2011:http://www.gallup.com/poll/148670/caregiving‐costs‐economy‐billion‐lost‐productivity.aspx.6MetLifeMatureMarketInstitute,TheMetLifeStudyofWorkingCaregiversandEmployeeHealthCareCosts,2010:www.maturemarketinstitute.com.7AARPPublicPolicyInstitute,FactSheet.ValuingtheInvaluable:TheEconomicValueofFamilyCaregiving,2008Update.

through401(k)plansorpensionbenefits,andfocusesonlyonthose

overage50+whocareforagingparents,notforothers.8

Despitethecompellingfactsandfigures,progresshasbeenslow

infiguringouthowtohelpcaregiversontheirjourney.Yettheyarethe

backboneoftheLTCdeliverysystem,whichishardlyasystematall.A

betterdescriptionwouldbeamosaicofscatteredservices.

PresentActions,FutureDirections

Workingcaregiverswhoareemployedinlargecorporations

usuallyhaveaccesstosomeservicesthroughtheirwork‐lifeprogram,

suchascaregivercoaches,websiteswithinformationaboutcare

choices,andinsomecases,geriatriccaremanagement,caregiver

supportgroupsandFamilyMedicalLeaveActextensions.Asnoted

earlier,caregivers’healthcanbeatrisk,andtheyaremorelikelyto

reportdepression,hypertensionandpulmonarydiseasethannon‐

caregivers.9Wellnessprogramsandstressreductiontoolsareoften

availablethroughtheemployer;thoughnotnecessarilytargeted

specificallytocaregivers,theycanbeanimportantcomponentin

overallcaregiverhealth.

Foravarietyofreasons,thereislowutilizationoftheseprograms,

buttherecontinuetobeeffortstoinvolveemployersinprovidingthe

work‐lifebalancetoolstotheircaregivingemployeessotheycanbe

healthierandmoreproductive.Interestingly,someoftheuniversally

8MetLifeMatureMarketInstitute,TheMetLifeStudyofCaregivingCoststoWorkingCaregivers,2011:www.maturemarketinstitute.com.9MetLifeMatureMarketInstitute,TheMetLifeStudyofWorkingCaregiversandEmployeeHealthCareCosts,2010:www.maturemarketinstitute.com.

acceptedlow‐costworkplaceadjustmentsforallemployeessuchas

flextimeortelecommutingaretheonesthatbenefitthecaregiversthe

most.

Therearesomegovernmentprogramsthatarehelpingcaregivers,

buttheeffortsonlymakeadentinsolvingthecaregiverconundrum.

Becausethereisno“one‐stopshop”forcaregivers,theyoftenspend

hourstryingtofigureoutwhattodowhentheyrealizetheirparentsor

otherlovedonesneedhelp.TheFamilyCaregiverSupportAct,apartof

theOlderAmericansAct,wasenactedtocreatetheonesourcethat

familiescancontacttofindoutabouttheresourcesinthecommunity.

Oneunderutilizedresourceisadultdaycarecenters,whichprovide

peoplewithdementiaandotherfrailelderswithday‐longorhalf‐day

programs,socializationandhealth‐relatedservicesinasafe

environment.Theyarealower‐costalternativetopaidhomecare,and

canmakethedifferencebetweenfamilymembersleavingajoborbeing

abletocontinuetowork.

Thereareanumberofcommunityservicesthatcaregiversmight

tapfortheirlovedones,suchashome‐deliveredmeals,seniorvolunteer

programs,andtransportationtodoctor’soffices;butdespitethe

legislativeinitiative,theyremainapatchworkforfamilies,betterin

somecommunitiesthanothersandmostlydifficulttonavigate.

Tohelpcaregiverspayforout‐of‐pocketcostsandlostwages,

somestateshaveenactedcaregiversubsidies.Whiletherehasbeen

somemovementinregardtocaregivertaxcreditsandseveralstates

thathavepassedtaxcreditbills,intimesofcutbacks,theseinitiatives

arenotlikelytogainmomentum.

Forthosewhoarewillingtopayforhelp,moregeriatriccare

managersarehangingouttheirshingle.Theyaregenerallysocial

workersornursesbytrainingwhochargeafeetoassistfamily

membersnavigatethesystemand,atanextracharge,managecare

plans.Newerentrepreneurialoccupationsarecaregivercoachesor

caregiverconciergeswhoconnecttheirclientswitharangeofservices,

includinggeriatriccaremanagersbutalsotopetsitters,home

remodelers,moversandotherswhocanenablepeopletoage

comfortablyandsafelyathome.

TheLTCandhealthcareinsuranceindustryhaslookedinto

caregiverinsurance.Asenvisioned,thisinsurancewouldenable

policyholderstoinsureagainstbecomingacaregiver,providingmoney

andcaregiversupportwhenacaregiver’sparentorotherlovedone

needsservices.Thoughearlyversionsofthisproductwerenot

financiallyviableforinsurers,theconceptisanintriguingone.

2.TheAging‐in‐PlaceMovement

TheSituation

People,whenasked,overwhelminglyindicatethattheywantto

ageintheirownhomes.AccordingtoAARP,90percentofolderadults

wanttoageinplace,and82percentstillwanttoremainathomeevenif

theyneedassistancewithday‐to‐dayactivitiesorareinpoorhealth.

Only9percentchooseafacility,and4percentchoosemovinginwitha

familymember.10Thispreferenceisbeingreflectedinpolicydecisions

10AARPdata,sitedinInYourHome:RemodelersforAginginPlace,FactsandStatistics:http://www.iyhusa.com/AginginPlaceFacts‐Data.htm.

andamonginfluencersingovernment,academia,andprofessionalswho

workwitholderpeopleandinthecommunity.Inadditiontoquality‐of‐

lifeissues,onedriveristhepotentialtocontaincostsbyreducing

nursinghomeadmissions.

Thedemandforaginginplace,however,hasn’tkeptpacewiththe

supportservicesandhousingthatareavailableforlow‐incomeeldersas

wellasforthoseinthemiddlemarket.Housingstockandapartments

areoftenolder,invariousstatesofdisrepair,andarenotaccessiblefor

thosewithfunctionallimitations.Perhapsmostimportant,theneedfor

servicesdoesnotmatchthelivingarrangements.Manylow‐income

olderadultsarefacedwithhavingtomoveinvoluntarilyfromtheir

apartmentsandhomesastheybegintorequiresupportiveservices,

accordingtoapaperpreparedbytheAmericanAssociationofHomes

andServicesfortheAging(nowLeadingAge).Asthepaperpointsout,

“…therearefewviablealternativesthataddressthedualneedsfor

affordablequalityhousingandservices.”11Theresultispremature

admissiontoafacility,andextrapressureonfamilymemberstostepup

andprovidecare.

Tovaryingdegrees,thesamemightbesaidofthemiddlemarket

andthepopulationasawhole.Thoseindividualswithfinancial

resourcescanhirepeopleandagenciestohelp,iftheycanfindwhat

theyneed,butthoseinthemiddlemightbeabletostayintheirhome

withouthavingtorelyontheirfamilycaregiverswithacombinationof

11AmericanAssociationofHomesandServicesfortheAging(LeadingAge).TheCaseforDevelopingEffectiveLinkageswithHealthandSupportiveServices.PreparedfortheNationalSummitonAffordableHousingwithServices,Washington,D.C.,May25,2010.

privatepayandcommunitysupports—iftheywereavailable.

CurrentActions,FutureDirections

Whilenottheonlyanswer,especiallyforlow‐incomeadults,new

modelsofcommunitypublic‐privatepartnershipsarespringingup

throughoutthecountry,manywithacommunityfocusthatcould

alleviatethestrainonmiddlemarketfamilycaregiversandultimately

benefitlower‐incomefamiliestoo.Thepreferredterminologynowis

AginginCommunity,abroaderconceptthatembracestheimportance

ofcreatingacaring,livableenvironmentwithintegratedservicesthat

makeitpossibleforpeopletoageintheirownhomeswithhigher

qualityoflife.Elementsofanage‐friendlycommunityincludehousing,

healthcare,walkability,transportation,socialinteractionandsafety,to

nameafew.

Oneinterestingmodelthatsupportsthedecisiontoagein

communityistheVillage‐to‐VillageNetwork.Olderpeopleintownsand

citiesthathaveembracedthismodelpayamembershipfee,usually

$100to$1,000peryear,andhaveaccesstoaconcierge‐typeservice

thatgivesthemaccesstoaffordableservices(bothpublicandprivate),

includingtransportation,healthandwellnessprograms,homerepairs,

socialandeducationalactivities,andtrips.Theycanalsobeconnected

tovetted,discountedproviders.12Villagesareinitiatedatthegrass‐

rootslevel,formedbyvolunteersincooperationwiththeirlocal

12www.vtvnetwork.org.

communities.Therearenowabout200Villagesinoperationorin

formation.

Onebarriertoaginginplace,asnotedabove,islackof

transportation.Manycaregiversfindthemselvesleavingworkearlyto

driveMomorDadtodoctors’appointments,takethemshoppingor

enablethemtogotosocialevents.Anumberoftownsandcommunities

subsidizeseniorvanservicesforessentialtravel,buttheservicesare

limitedbecausetheyarecostlytooperateandtheydonotprovideallof

aperson’stransportationneeds.Aninterestingnationalnonprofit

organization,ITNAmerica,hasbeenformedtomeetthisunmetneed.

ITN’smissionistoprovidesustainable,community‐based

transportationservicesbybuildingaseniortransportationnetwork.

Olderpeoplecantradetheirvehiclesforridecredits,andvolunteer

drivers(theycouldbeadultchildrenwholiveatadistancefromtheir

parents)canearncreditsforthemselvesortheirlovedoneswholivein

otherlocationsfortransportationservicesITNprovides(ortheycan

donatetheircreditsforridesforlow‐incomeolderpeople).Thereare

over25ITNmajormetropolitanareasthroughoutthecountryincluding

Boston,Chicago,CincinnatiandSarasota,withmoreindevelopment.13

Whilethenumberissmall,themodelhaspromiseforitdoesnotrelyon

governmentmoneyandmeetsoneofthebiggestneeds.

Intheory,community‐basedmodelslikethese,combinedwiththe

varietyofnewhometechnologies,cancreateavirtualfamilyand

supportnetworkforthosewhosefamilymemberscan’tbe“oncall”or

13www.itnamerica.org.

whodon’thaveafamilytorelyon.Vettedservicessuchashomecare

cangivethefamilypeaceofmind.Technologyandtele‐healthmodels

arebeingintroducedatlightningspeed.Thesearedesignedtoenable

peopletolivesafelyathome—sensors,emergencyresponsedevices,

medicalmonitoringandmanyothers.Manycaregiverswouldliketheir

parentstousethemtobesuretheyaresafeandwell,butthe

penetrationiscurrentlylow(thoughthepotentialisthere)andthe

infrastructureisnotwell‐developed.

Theresultofthesenewdevelopmentsseemspositivesofar,and

shouldgoalongwayinsupplementingthecarethefamilycanprovide.

Thejuryisout,however,asthemodelsarenewandresearchisneeded

tofindouthowtheyareworking,howeffectivetheyare,ifolderpeople

aregettingwhattheyneedinthewayofservicesandsupport,andifthe

familycaregiversbelievethattheyaremakingadifferenceintheirloved

ones’lives.Also,scaleandconsistencybecomebigissuesasthese

modelsarecommunity‐based,labor‐intensive,andrequiregrass‐roots

support.Theyalsoarereachingasmallnumberofpeoplecomparedto

thegrowingneed.

3.ShortageofPaidCaregivers

TheSituation

Atthetopofthelistforjobgrowthinthenextdecadeare

personalcareaides,thepaidcaregiverswhoprovidecaretoolder

peopleandothersinneedofassistance.Citingprojectionsfromthe

BureauofLaborStatistics,aNewYorkTimesreporterwritesthatthe

occupationsthatareexpectedtogrowbetween2012and2022are

personalcareaides(580,800newpositions),homehealthaides

(424,200jobs)andnursingassistants(312,200jobs).Thisaddsupto

morethan1.3millionnewcaregiverswhowillbeneededtomeetthe

demandoverthenext10years.14

Onthesurface,thesefigurespointtopromisingoutcomes,both

fortheeconomyandforthefamilycaregiversandcarerecipientswho

relyonpaidassistance.Theproblemis,however,thattheneedwon’tbe

metbecausetherewillbeaseriousshortageofwomenormenwillingto

fillthejobs.Inthearticle,JoshuaWiener,directoroftheaging,disability

andlong‐termcareprogramatRTIInternational,notes“Thereisn’t

goingtobeabigincreaseintheworkforcethattypicallyfillsthese

jobs—poorlyeducated,lowincome,usuallyminoritywomen—overthe

nexttenyears.”Itappearslikelythatthewageswillremainlow,with

fewbenefitsandopportunitiestoadvanceinacareer,andthejobswill

continuetobehardtofill.

Familycaregiversoftencan’ttakeonthefullresponsibilityof

providingcarebecauseoftheirownfamilyandworkresponsibilities.

Theavailabilityanduseofpaidcaregiversmakesitpossibleforafamily

tosupplementthecaretheyprovide.Iftherearen’tenoughpaid

caregiverstomeettheneeds,familieswillbeundermorepressureto

findqualifiedcandidatesandtomakesuretheirparentsorlovedones

arenotvictimsofabuse,ortheywillendupleavingtheirlovedonesat

14Graham,Judith.AShortageofCaregivers,NewYorkTimes,Feb.20,2014:http://newoldage.blogs.nytimes.com/2014/02/26/a‐shortage‐of‐caregivers/.

riskordoingmoreoftheworkthemselves,perhapsleavingtheirjobsto

doso.TheironyisthateventhosewhohaveLTCinsurancewillbe

impactedasapprovedagenciesandfacilitieshavedifficultiesfinding

goodcandidates,sothisbecomesaproblemfortheindustryaswell.

CurrentActions,FutureDirections.

Clearly,somecreativethinkingisneededtoalleviatethepending

shortageofcaregivers.Trainingandmentoringprograms,wageand

careerladders,benefits,andbetterworkingconditionsarethe

keystonesbutonlythebeginninginthedrivetorecruitandretaina

qualifiedandcaringworkforce.

Therearesomeinterestingconceptsthathavebeenfloated,

thoughtheyareonlyaddressingthetipoftheiceberg.Onerecruiting

ideaistoencouragematurepeople,perhapsthosewhohavebeen

caregiversthemselves,toconsiderafull‐orpart‐timejobasapaid

caregiver—atypeofencorecareer.Ajob‐searchwebsiteforolderjob

seekers,Retirementjobs.com,issupportingthisidea,andlocaljob

initiativesarespringingup.Forthosewhoneedextraincome,who

wantsomeflexibility,arewillingtoworkpart‐timeorvariedhours,or

whowanttomakeadifferenceinsomeone’slife,thismightbeagood

option.Therealsoareanumberofcaregivingwebsitesspringingup,

suchasCarelinx.com,thatmatchcaregiversseekingworkwiththose

whoarelookingforacaregiver.

Anotherconceptthathasbeendiscussed,andwasposedina

RandreportandcitedinarecentMarketWatch/WallStreetJournal

publication,isthatimmigrationcouldeasethecaregivershortage.

Foreign‐bornworkersrepresent21percentofdirectcaregiversinthe

UnitedStates.Becausenoemployment‐sponsoredvisasexistfor

direct‐careworkers,theyusuallyenterthecountrythroughfamily‐

sponsoredvisas.Inaddition,anestimated1in5careworkersis

undocumented.Whilepotentiallycontroversial,acreativesolution

suggestedinthereportistofollowtheexampleofCanadawhereby

immigrantsworkaslive‐incaregiversfortwoyears,afterwhichthey

areeligibleforpermanentresidency.15

Collegestudents,accordingtoacollegerecruitingpublication,

mayalsohelptosolvethecaregivingshortfall.16Nearlyhalfofall

undergraduatesworkwhileenrolledincollege,andapproximately10

percentareemployedatleast35hoursperweek.Caregivingjobscan

providetheflexibilitythatisneededsostudentscanpaytheirbillsand

alsoattendschool.Thejobsprovidethemwithexperienceforfuture

employmentandalsotheintangiblebenefitsthatresultfroman

intergenerationalrelationshipbetweenanolderpersonandacollege‐

agestudent.

Theremaybeadditionalnewideasabouthowtorecruitpaid

15O’Brien,Elizabeth,ImmigrationCouldEaseCaregiverShortages,MarketWatch/WallStreetJournal,Nov.6,2013.16Rothberg,Steve,myCNAJobsPredictsCollegeStudentsMayHelpAlleviatetheImpendingCaregiverShortage,collegerecruitercom,Sept.24,2012:http://www.collegerecruiter.com/blog/2012/09/24/mycnajobs‐predicts‐college‐students‐may‐help‐alleviate‐the‐impeding‐caregiver‐shortage/

caregivers,butit’simportanttostartwiththebuildingblocks—decent

wages,adequatebenefitsandregularhoursaccompaniedbycaregiver

supportandlearningopportunities.Paidcaregivers,likethefamily

caregivers,arethe“feetontheground,”andprovidethecarethat

makestheLTCsystemworkonahumanlevel.NoLTCprogramwill

workunlesstherearewell‐trained,caringindividualswhocanprovide

thecarethatwillbeneededandwhocanbetrustedsothereisnofear

ofelderabuseandfinancialfraud.

4.TheRisingCostofCareandtheLackofPlanning

TheSituation

LTCcostshavebeenrisingsteadilyforthepast10ormoreyears.

A2012surveyreportsthattheaveragecostofaprivateroomina

nursinghomeisnow$240perday,or$87,500peryear.17Assisted‐

livingbaseratesroseto$3,500permonth,or$42,000peryear.Home

careisoftenconsideredlessexpensive,butdailyorround‐the‐clock

carecanbeasexpensiveasinstitutionalcare.Home‐carerateshave

increasedtoo,withhomemakerservicesnowat$19perhourandhome

healthaideservicesat$20.Thiscanbecomeanalmostinsurmountable

financialburdenifthepersonneedingcaredoesnothavethefunds,

didn’tpurchaseLTCinsurance,orneglectedtoputawaymoneyincase

carewouldbeneeded.Asaresult,caregiversmayfindthemselves

spendingdowntheirparents’hard‐earnednesteggs,dippingintotheir

17Genworth2014CostofCareSurvey:https://www.genworth.com/dam/Americas/US/PDFs/Consumer/corporate/131168‐032514‐Executive‐Summary‐nonsecure.pdf.

family’sinheritance,orusingtheirownmoneytopayforthecarethatis

needed.

Despitethehighcosts,thepenetrationrateoflong‐termcare

insuranceremainslow.AccordingtoarecentarticleinHealthAffairs,

thereareapproximately8millionprivateLTCinsurancepoliciesin

force;citinganearlyLTCIndex,1in6peopleage65orolderwithan

annualincomegreaterthan$20,000havesuchcoverage.18 Bythetime

acarerecipientneedstheinsurance,itislikelytobetoolateto

purchaseit.Butitshouldbeawake‐upcallforindividualswhobecome

caregivers,andwhoarethereforemoreawarethattheymaysomeday

needcarethemselves.

Theauthorsofthearticlegoontosaythatthenumberofpolicies

soldinthepastseveralyearsdidnotliveuptotheprojectionsofthe

pastdecade.Withcarriersexitingthebusiness,across‐the‐boardrate

increases,andtheupsanddownsoftheeconomy,itmaynotbe

surprisingthattheratehasslowedconsiderably.Ontheotherhand,the

needforpreparingforLTCisincreasinglyontheradarofboomers

transitioningintoretirementand,infact,isweighingontheirminds.

Whentheoldestboomerswereaskedwhattheirmajorconcernwas

aboutretirement,providingforyour/yourspouse’s/yourpartner’sLTC

needscameoutontop.19

18Stevenson,DavidC.etal.,TheComplementarityofPublicandPrivateLong‐TermCareCoverage,HealthAffairs,January2010,Vol.29,No.1,pp.96‐101:http://content.healthaffairs.org/content/29/1/96.full.19MetLifeMatureMarketInstitute.TheMetLifeReportontheOldestBoomers,2013:www.maturemarketinstitute.com.

Thecontradictoryelementofthisisthat,despiteconcernsabout

retirement,peopledonotplanforthepossibilityofneedingLTC,or,for

thatmatter,fortheirretirementsecurity.Ithasoftenbeensaidthatthey

spendmoretimeplanningforavacationthanplanningfortherestof

theirlives.Inonestudyofpre‐retireesages50to70,nearlyhalf(48

percent)hadspentninehoursorlessovertheprevioussixmonths

gatheringinformationonplanningforretirement.20

Thepossibilityofbecomingacaregiverisrarelyconsideredin

retirementplanningandcanderailasoundfinancialstrategy.

Caregiversincurexpenses,oftenfromtheirownpocket.Theymight,in

fact,bepayingdirectlyfortheirparents’care.Inaddition,theyareoften

underemotionalandphysicalstressandmayleavetheworkforce

beforetheyexpectedtoorchoosepart‐timework.Asmentionedearlier,

leavingtheworkforceprematurelycanimpacttheiroverallfinancial

wealth.Acaregivermightbebetteroffpayingforcareeventhoughthe

costsseemhighandinsteadcontinuetogenerateincome,savingsand

anycompany‐matchcontributionstoa401(k).Andthecaregiverswho

expecttogobacktoworkwhentheircaregivingresponsibilitiesend

mayfinditmuchmoredifficulttore‐enteratacomparablesalarylevel,

reducingtheamountofmoneytheymighthaveaccumulatedfor

retirement.

CurrentActions,FutureDirections

LTCplanningstillremainstheelephantintheroom.Thoughit

maybetoolateforthecarerecipient,thereistimeforcaregiverstoplan

20MetLifeMatureMarketInstitute.BestCaseStrategiesforaFlexibleRetirement,2011:www.maturemarketinstitute.com.

fortheirownoldage.Someprogresshasbeenmadeinhelpingpeople

saveandprepareforretirementthroughemployerprograms,simplified

401(k)plans,educationalcampaigns,andWeb‐basedtoolsand

calculators,butLTCisoftennotontheradarunlessLTCinsuranceis

offeredasavoluntarybenefit.SavingforLTChasreceivedsome

visibilitythroughtheattempttoincludealong‐termcomponentinthe

AffordableCareAct.ThoughCLASSwasnotaviableoption,aLongTerm

CareCommissionhascreatedsomeattention,alongwiththeincreasing

awareness,totheissues.Whilenoeasyanswerisapparentforcurrent‐

daycaregivers,planningmaybecomemorecommonplaceforthe

caregiversofthefuture.

Onecurrentsolutiontofinancecareistotapintohomeequity.

Therecentprotectionsandchangesinthereversemortgageproductare

worthconsideringasfamilieslookintowaysthattheirlovedonescan

remainintheirhomeandpayfortheservicesandsupportstheyneed.

Andthefamilycaregivers,manyofwhomhaven’tsavedandare

concernedaboutoutlivingtheirassets,mightconsiderthistoolfortheir

ownretirement.

Becausethepossibilityofbecomingacaregiverisrarelyincluded

inaretirementplan,financialadviserswoulddowelltofactoritin.As

mentionedearlier,caregiversincurexpenses,oftenfromtheirown

pocket.Theymightbepayingdirectlyfortheirparents’care.Orthey

mayleavetheworkforceprematurely,forgettingaboutthelostwealth

theycouldhaveaccumulated.Thesemightbeconsideredhiddencosts,

anditwouldbeimportanttoincludetheminretirementplanning

discussionsandWebtools.

PullingitAllTogether:BlueSkyStrategiesandSolutions

Thequestionsomanyleadersinthefieldofcaregivingandaging

haveaskedovertheyearsis:Howcanthegrowingneedforcaregivers

duetotheprojectedincreaseoftheoldest‐oldpopulationrisetothetop

ofthenationalagenda?Herearesomethoughtsandideasthatmay

stimulatethinkingifwearetosolvethisimpendingcrisis:

Explorethecaregiverinsuranceconceptfurther,perhapsasa

ridertoanLTCpolicydesignatinganadultchildorotherfamily

memberasthecaregiverofthepolicyholder(thepotentialcare

recipient).Anotherconceptisashort‐termcaregiverstand‐alone

product,focusedonthewaitingperiodbeforeacarerecipient’s

LTCbenefitsbegin.Athirdideaistofocusonafixednumberof

hoursofgeriatriccaremanagementandanunlimitedamountof

caregivingcoachingbuiltintoanLTCpolicy;whilesome

companiesprovidesometypeofconsultativeservices,thiswould

beamorerobustversiondesignedtohelpthecaregivermake

decisionsalongtheagingcontinuumandmanagethecareplan.

Considerwaystousehomeequityasatooltopayforcaresothat

lovedonescanageathomeandfamilycaregiverscanhirepaid

caregiversasneeded.Developnewmodelsandsupporteducation

aboutreversemortgagesandhowtheycanbepartoftheLTC

solution.

IncludequestionsaboutcaregivingintheHealthRisk

Assessmentsadministeredbyemployerstotheiremployees—if

theyarenotincluded—andcorrelatethedata.Sinceemployers

wishtoreducethecostofprovidinghealthinsurancefortheir

employees(andwithpreviousdataindicatingthatcaregiversare

lesshealthyandincurmorecoststhantheworkforcepopulation

asawhole),thiscanserveadualpurposeofgeneratingmoredata

andstimulatinginterventions.Employersandthevendorswho

providework‐lifesolutionscouldpackageaneldercareservices

pluswellnesssolutioncustomizedfortheworkingcaregiver.The

ReActconsortium,sponsoredbyPfizerandcomposedofmajor

corporations,isinagoodpositiontojumpstarttheseandother

initiativesonabroaderscale.

SimilartoITNdescribedearlier,startaNationalCaregiving

Network,perhapsbasedonlocalCaringCollaborativemodelsthat

bankvolunteerhoursthatcanbeusedbytheminthefutureor

canbegiventofamilymemberswhoneedthem.Whilethismight

notbeapplicabletothosecarerecipientsneedingintensecare,it

couldalleviatefamilycaregiverburdenswithvolunteershelping

outwithdriving,shopping,respitecareandotherservices.

Basedonthestatisticsabove,homehealthwillbeamajorsource

ofjobsintheyearsahead,andtherewillbefewpeopletofillthese

jobs.ANationalCaregiverJobTrainingandCareerAdvancement

initiativeisneededthatwouldnotonlyprovidetrainingbut

wouldalsoprovidesupportforcaregiverstolearnEnglishif

needed,earnaGED,highschooldiploma,orcommunitycollege

degree,andprovidecareercounselingandemotionalsupport.It

couldalsobefocusedonhelpingmid‐lifepeoplewhopreviously

workedinmanufacturingjobsorwhosejobsareobsoleteretool

foranewvocation.

Workmorecloselywiththehealthcareindustryoncaregiving

solutions,buildingonthenewrealitythathospitalswillpaya

penaltyifpatientsareunnecessarilyreadmittedaftertheyare

released.Thefamilybearstheburdensofadministeringcatheters,

dressingwounds,andothertasksthathealthcareprovidersonce

performed,andifdoneincorrectly,canresultinreadmission.Now

thatthehealthcareindustryhassomethingatstakeandneedsto

revamphowshort‐termlong‐termcareisdelivered,thetimeis

righttodevelopmoreintegrativeacute‐chroniccaremodelsthat

helpthecaregiveraswellasthecarerecipient.Thoughchanging,

themedicalmodelhasnotsufficientlyrecognizedtherolethe

familycaregiverplays.

Tomakesurethatfamiliesandtheirlovedonesareprotected

fromelderabuseandfinancialfraudbycaregiversinthehome,

initiateanationalelderabuseregistry,similartoasexoffender

registry.Thiswouldalsobeofvaluetohome‐careagenciesthat

mustdotheirowninvestigationsoftheiremployees.Adequate

fundingisneededfortheElderJusticeAct(includedinthe

AffordableCareActbutnotfullyfunded)toincreaseAdult

ProtectiveServicesfunctionsonthestateandlocallevelandother

servicesthathelptopreventelderabuse.

Supportthecreationanddevelopmentofnewmodelsof

integratingserviceswithhousingsopeoplecanageinplaceand

continuetohavequalityoflife.TheVillage‐to‐VillageNetwork,co‐

housingandsharedhomesareexamplesofinnovationsthatcan

helpkeeppeoplelivinginthecommunitylongerandshouldbe

encouraged,promotedandscaledup.

Createentrepreneurshipopportunitiesforthosehands‐on

practitionerswhohavesmallbusinessesorwanttostartthemto

servethegrowingaging‐in‐placemarket,especiallygearedto

thoseinthemiddlemarket.Thismightincludehomeremodelers,

carecoordinators,seniormovingservices,financialservice

professionals,handymen—allthoseservicesthatcansupplement

thetasksthatcaregiversdotohelptheirparentsandotherloved

ones.

Embracenewtechnologiesandstart‐upsthathaveenteredthe

caregivingmarketplace,assistingtheentrepreneursin

understandingthemarket,connectingthemwithcommunity

resources,andcreatingsomenewwaysofthinkingabout

recruitingandmatchingcaregiversandcarerecipientsand

workingtowardnewsolutions.

MakeAgingintheCommunitythethemeofthenextWhiteHouse

ConferenceonAging(writtenintotheAffordableCareActbutnot

fundedasofthiswriting)sothatmoreattentionispaidtothe

agingofthepopulationandthosewhocarefortheminafocused

way.Onerecommendationmightbetocoordinatethevarious

elementswithinthefederalgovernmentthatfacilitateagingin

place,includinghealthcare,agingservices,housing,jobprograms,

etc.Anotheristobringtheprivatesectorintothediscussionina

meaningfulwaysothatnewproductsandservicescanbe

developedandtheycanbecomeatruepartnerinscalingupthe

age‐friendlycommunitymovement.

EngagetheFinancialPlanningAssociation,theRetirement

IncomeIndustryAssociation,theAmericanCollegeandother

associationsthatsupportthefinancialservicescommunityinan

initiativetoencourageholisticplanning,whichincludesplanning

notonlyforLTCbutalsoforbeingacaregiver.Adviserscanhelp

theircaregivingclientsidentifypublicbenefits21andresources

thattheirparentscouldtapinto,understandingthecostand

qualityofhome‐careagenciesandLTCfacilitiesintheareawhere

theirparentslive,findingoutaboutthecostandeffectivenessof

newhomemonitoringtechnologies,identifyingprivateservices

suchasbill‐payingservicesorgeriatriccaremanagementthat

wouldalleviatesomeofthecaregivingtaskstheyarerequiredto

perform,gettingabettergraspoftheirparents’homeequityvalue

andconsideringhowtobestutilizethat,andhelpingthemcost

outthefinancialimpactiftheyweretoleavetheworkforce

prematurelytoprovidecare.22

Summary

Whenitcomestocaregiving,weareallinthistogether—families,

thegovernment,nonprofitsandtheprivatesector.Familycaregiversdo

21BenefitsCheckUplocatesbenefitprogramsthatcanhelppayformedications,healthcare,utilitiesandmore:www.benefitscheckup.org.22MetLifeMatureMarketInstitute,PlanningTips:FinancialConsiderationsforWorkingCaregivers,2011:www.maturemarketinstitute.com.

notcareforlovedonesinavacuum.Theyneedthesupport,

infrastructure,andfinancialtoolsandresourcestoenablethemto

continuetoloveandcarefortheirlovedoneswithoutjeopardizingtheir

ownhealthandretirementsecurity.

Caregivingmaybearolethatnoneofuspreparedfor,butoncein

it,wewanttodoourbest.Whenthechipsaredown,familiesand

friendswillcomethroughfortheirlovedonesandcontinuetoprovide

carethatnofinancialserviceorgovernmentcan.That’swhycaregiver

supportshouldbeanintegralpartofanyLTCfinancingsolution.