Long term care is expensive. Aging parents may own a home but cannot provide the care for a partner or on their own. Home care is not always an option either. It too can be expensive and there is a shortage of home care workers. Millions of people take care of their aging loved ones in their home and are paid nothing for it. Or they move in with parents to help and are paid nothing for it.
The average nursing home resident is a woman, because wives tend to outlive their husbands. Whereas husbands benefit from their wives caring for them, when their widow becomes frail, she often has nobody to help. Sometimes widows need only minimal assistance, primarily just companionship for a few years until they require more care than can be provided in the home. That is how it was with a family member. Care was minimal for seven or eight years but a daughter living there likely reduced the need for assisted living by seven or eight years. However, at some point, many older people need continual help with activities of daily living. That is, help with bathing, dressing, eating, cooking, using the bathroom and getting in and out of bed.
Unpaid caregiving is enormous according to analysts who have studied the issue. One estimate place the total at $873.5 billion annually. That is more than is spent paying others to provide long-term care. The total expenditure on long-term care is $467.4 billion annually. Another way to look at it is that for every $3 dollars of care provided to seniors, $2 are uncompensated.
Who pays? More than two-thirds of long-term care (~71%) is publicly funded. About 15% is paid for with private insurance or “other private” whatever that means. Just under 14% is paid out-of-pocket.
Policymakers face a dilemma. Long-term care is expensive and about 70% of long-term care is already a burden on taxpayers and, primarily through Medicaid. It would be a huge benefit if there is a way to keep frail seniors out of Medicaid nursing homes by compensating family caregivers at rates much cheaper than institutional care. The problem is that policymakers cannot afford to pay family members who would otherwise care for their parents for free. Currently to qualify for public assistance seniors must have liquid assets of more than $2,000. There is also a 5-year lookback period to prevent families from disposing of assets to qualify for Medicaid.
The Kaiser Family Foundation reports that some states have programs to financially assist families providing care to loved ones:
If you’re caring for a loved one in retirement, or will be, you’ll probably find it to be a drain on your finances — roughly $7,200 annually, on average, according to AARP. But what if you could get paid for your time and effort?
Family caregivers often face financial hardships when caring for their loved ones as they cut back on their jobs and take on caregiving expenses. There are about 44.6 million caregivers in the U.S. performing the equivalent of about $873.5 billion worth of labor each year, according to a study by Columbia University Mailman School of Public Health.
It is not easy to qualify for compensation for caring for a loved one. If you are financially responsible for them, you are unlikely to get paid. Medicare also generally will not pay for caring for a spouse.
“There is a mind-boggling array of complexity when it comes to exactly how the states will allow you to become employed as a family caregiver,” said Guerrero. “Medicaid has a lot of gotchas when it comes to paying family members for care.”
There are programs in California, Colorado, Connecticut, Delaware, Maine, Massachusetts, Maryland, Minnesota, New York, New Jersey, Oregon, Rhode Island and Washington and numerous others. Forty states are on a waiting list for waivers. The Department of Veterans Affairs has a program of Comprehensive Assistance for Family Caregivers. Programs and eligibility vary state by state.
Read more at KFF Health News: Caregiving can be a financial drain on family members. Want to get paid for it?