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.Skip to next paragraph
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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.