Coming to terms with long-term care
Some early, inclusive planning can help ease the financial task of
You could call it "sticker shock" of the worst type.
A few months ago, Ann Bollinger and her brother set out to find assisted-living housing for their father, who has good health but is in his 80s.
The cheapest plan, at a pleasant complex in Quincy, Mass., started at $32,000 per year.
But that would have been just for their father. If their stepmother accompanied her husband into the complex, the cost would jump to $39,000.
For a studio apartment.
A one-bedroom apartment started at about $37,000 for one person, or $44,000 if both husband and wife moved in.
"And that was just for basic services," says Ms. Bollinger, who lives just outside Boston and works for a nonprofit organization. "Anything extra involved much more money."
After a family discussion, her father and stepmother decided to stay where they currently reside, in a senior-citizen complex that costs a little under $500 a month.
Moving to an assisted-living situation would have likely wiped out her parent's assets within a couple of years, says Bollinger (not her real name).
Her situation is far from unique.
Thousands of families in the United States - and throughout the industrial world - are struggling to find appropriate and affordable long-term care for senior citizens unable to take care of themselves.
Some social scientists say an "elder-care crisis," now looms, especially for baby boomers with older parents.
In 1994 alone, for which the latest definitive records are available, some 7.3 million Americans required long-term care. That number is expected to jump to between 10 million and 14 million people by 2020, according to the US General Accounting Office.
Despite the increasing need for assistance, elder care remains a largely hidden issue, in terms of the national political agenda, says Neal Cutler, director of survey research for the National Council on the Aging, in Washington.
But that will change dramatically, he believes, as the baby-boom generation ages, and more boomers discover that they must not only support their children, many of them in costly college programs, but also provide care for their parents.
Dr. Cutler notes his own situation: He is in his 50s, with a mother - who recently moved into an assisted-living facility - in her 80s. Cutler says that he was able to put the financial resources together to pay for the needs of his parent. "But many families will unfortunately find that they just can't afford to do it," he says. "What will they do?"
Many adult children of elders looking for assisted-living or special-care facilities have already discovered costs can be enormous, exceeding discretionary income, and, too often, directly threatening family savings.
Home care alone can run between $12 and $25 an hour. Nursing-home care is more expensive, running up to $40,000 a year. Assisted living can run from $20,000 a year in some locations to a more typical $35,000 to $40,000 in large metropolitan areas.
The elder-care challenge calls out for greater action on three fronts, experts say:
1. Making affordable elder-care insurance more widely available.
2. Providing adequate financial help for elder-care needs.
3. Ensuring that there are affordable assisted- living or extended-care facilities in most metropolitan communities.
Total outlays for elder care in the US now run well in excess of $90 billion annually, and probably in the $100 billion range, say most studies.
Federal programs help cover some of the cost. Medicaid kicks in about one-third of the funding (about $29 billion). But to obtain Medicaid, elderly parents, or their families, must use up virtually all their savings.
Medicare pays about one-fourth of costs, about $23 billion. But that means that out-of-pocket payments by the elderly and their family members amount to roughly 40 percent of total costs, in excess of $39 billion.
Insurance is available to cover elder-care/nursing-home needs. But it can be expensive, especially for people in their 60s or older. That means you should "start buying when you are younger," says Don Kaufman, a vice president of the DeWitt Stern Group Inc., an insurance brokerage firm in New York.
He recommends people pick up a long-term health-care policy by the time they turn 50. A policy that pays about $200 a day in elder-care benefits costs about $540 a year for a 50-year-old, compared with about $930 a year for a 60-year-old, he adds.
If you buy insurance, make sure the policy has a low "waiting period," the number of days you have to be under care before benefits kick in. Mr. Kaufman says 20 days is a sound choice.
Also, get the longest-possible benefit period. Typically, a nursing-home stay runs under three years, he says. Also, buy through an insurance broker, he suggests, since they tend to deal with many firms, and you can find lower prices. More than 100 firms underwrite such policies, he says, although just a handful dominate the market.
Kaufman believes such policies are particularly important for boomers sandwiched between generations and having many obligations.
While in 1940 only 13 percent of persons aged 60 or over had an elderly parent still alive, today 44 percent of persons 60 or older have an elderly parent living, he says.
So far, "we're just seeing the tip of the iceberg," says says James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, in New Jersey. Much of the elder-care challenge is now being faced by adults who were "war babies" - born during World War II, he says. But just around the corner, he says, will be the baby boomers. The oldest boomers are now in their early 50s. Many of the boomers' parents, moreover, were teenagers when they married, which means they are still relatively young.
But in four or five years, there could be a confluence of more elders needing care, just as the boomers move into their mid-50s and toward their 60s - in other words, the very years in which the boomers should be salting away savings for their own retirement.
Those most caught up in the elder-care dilemma tend to be the adult daughters of aging parents. Studies show that they most often become the primary caregivers. The majority of these women also hold down jobs. Thus, they juggle long hours, seeking to balance the needs of their employers, children, spouses, and parents.
Some sociologists worry that this balancing act puts too much strain on homes and marriages.
For now, the elder-care debate remains largely dormant compared with issues such as reforming Social Security and Medicare. But elder care "could be an issue in some congressional districts in next year's elections," where there are concentrations of older people, says Cutler.
Still, the main policy thrust for elder care comes from the private sector, if what is happening in New Jersey - which has an elderly population perhaps a tad larger than most states - is a guide, Hughes says. "In a number of cities, assisted-living complexes are being built," he says.
Nationally, some large blue-chip companies such as Boeing and AT&T offer elder-care programs, including hot lines where workers can seek help or counseling.
But corporate America has a long way to go. Fewer than 1 percent of all US companies now offer such programs.
Where to go
to learn more
Here are selected Web sites and phone numbers for information on elder care:
*Children of Aging Parents
*National Council On the Aging
*National Association of
Elder Law Attorneys
*National Association of Professional Geriatric
(c) Copyright 1999. The Christian Science Publishing Society