The Societal Costs of Caring for Aging Parents

A glance at U.S. population statistics tells the story.  There are an estimated 10 million Americans over the age of 80, and close to 20 million in their 70s.  That's almost 10 percent of our now slightly greater than 300 million total population.  And who are these people?  In a nutshell: they are the parents of you and your friends.  Most importantly, as people age past 70, it gets harder and harder for them to take care of themselves financially, physically and spiritually.   So who is going to look after them?  You guessed it--you are (if you are not already doing so)!
           
Every day, at least 15 million Americans, and some experts estimate 30 million, provide unpaid help to adult family members (usually parents or grandparents) who can no longer bathe themselves, prepare meals, or do other daily tasks that most of us take for granted. An AARP study: Valuing the Invaluable: A New Look at the Economic Value of Family Care-Giving, found that the contributions of family care-givers often go unnoticed. In fact, however, their contributions are the backbone of the nation’s long-term care system with an estimated economic value of $350 billion in 2006.

That's a chunk of change!  $350 billion dollars is:

In every state, the value of family care-giving exceeds Medicaid spending for long-term care by a large margin, ranging from 1½ to 10 times as large.  Family care-givers play a vital role in providing care to adults living with serious illnesses, chronic conditions, and disabilities. They help delay or prevent the use of costly nursing home care and reduce pressure on both Medicaid and Medicare budgets.
           
The unpaid services that family care-givers provide are not without costs to the care-givers and society. Lost time at work, lost benefits, and declining health can add to the emotional and physical strain of actually caring for a loved one. The AARP study underscores the need to better support family care-givers through programs that provide respite (a break from caring), tax credits, information, and other supports

Many baby boomers also incur significant out-of-pocket costs to take care of their aging parents.  For some the expense is in lieu of being an unpaid care-giver, for others it is in addition to that role.  Right now an estimated 15 million of us pay all or part of our parent's housing costs, medical supplies and incidental expenses. Many costs are out of pocket and largely unnoticed: clothing, home repair, a cellular telephone.

According to a report by the New York Times, adult children with the largest out-of-pocket expenses are those supervising care long distance, those who hire in-home help and those whose parents have too much money to qualify for government-subsidized Medicaid but not enough to pay for what could be a decade of frailty and dependence.

The Times also reports that the burden is compounded by ignorance, and points to an AARP study, released in mid-December, which found that most Americans have no idea how much long-term care costs and believe that Medicare pays for it, when it does not.

The Times observes that families have always looked after their elderly loved ones, but then notes that never has old age lasted so long or been so costly. And it compromises the retirement of baby boomers who were expecting inheritances rather than the shock of depleted savings.

The Times quotes Dr. Robert L. Kane, a geriatrician at the University of Minnesota School of Public Health: “There is a myth out there that families abandon their frail elders.  Instead, across the income spectrum, children are sacrificing to care for their parents to the limit of their means and sometimes beyond.”

Researchers have documented the time spent by adult children, and others, caring for ailing relatives. But data is woefully inadequate on how much they actually spend, health economists say, because most people do not keep itemized entries as they write checks, use their credit cards or pocket money to meet the demands of the day.

Costs are astronomical for long-term, low-tech care, the sort most often needed by those who linger with Alzheimer’s disease or are too frail to get around on their own. Medicare is of almost no help, since it covers only acute episodes like a heart attack, cancer or repair of a broken hip.

That means the elderly and their families are left to pay for assisted living (which averages $35,000 a year), nursing homes ($74,000) or home health aides. Only the very poor receive Medicaid, which pays nursing-home bills nationwide but home care in only a few states (New York among them), and nothing toward assisted-living rent.

Nor does Medicare cover equipment like grab bars for the shower and incontinence supplies, which alone can run $2,000 a year, or travel expenses for an adult child responding to medical emergencies.
           
Only one authoritative survey, in 2004, has even asked adult children how much they contribute to their parents’ support. Half said they did, and the average monthly expenditure was $200. Respondents who looked after their parents at least 40 hours a week said they spent an average of $324 a month.

But those figures were based on “quick, top-of-the-head estimates,” said Gail Hunt, president of the National Alliance for Caregiving, which conducted the survey.

Knowing the extent of these expenses might inform public policy, some experts say, calling attention to a gap in the government safety net for the elderly.

“Should this burden fall solely on the individual and the family?” asked Judy Feder, dean of the Public Policy Institute at Georgetown University. “And can we really expect this arrangement to keep doing the job as a larger and larger population comes to grips with it?

Congress recently passed a poorly financed bill that would help family members who need a break to pay for substitute care of an ailing loved one. But the Bush administration, to date, has preferred a private sector solution, recommending long-term insurance and reverse mortgages.

For spouses, medical expenses are tax-deductible if they exceed 7.5 percent of adjusted gross income. But children cannot claim parental expenses unless they pay more than half of a parent’s support, which is often not the case when the parents are on Medicaid.

In many respects the out-of-pocket spending by adult children is not sensible, elder-care experts say, but the result of the awkward minuet of preserving a parent’s pride.

If families behaved logically, said Steven Schurkman, an elder-care lawyer in White Plains, all expenses would be paid from the parents’ money, which if depleted would entitle them to Medicaid. “What most of us do isn’t sound financial planning,” Mr. Schurkman said. “But it’s healthy for the family dynamic.”