Tag: long term care insurance

CNN
 — 

For most of her life, Tammy La Barbera has been taking care of someone other than herself. First, it was her two children. Then, it was her brother and father, who both died after being diagnosed with cancer. Now, Tammy is taking care of her 90-year-old mother, Ada, who was diagnosed with dementia five years ago.

In recent months, Ada’s condition deteriorated so quickly that Tammy resigned from her job as an event manager to become a full-time caregiver.

“I don’t have help here, and I know it’s going to get worse,” she said.

Tammy, 53, struggles to provide her mother with the care she needs and would like to place her in a memory care facility equipped to handle the mood swings and outbursts that her mother has due to her condition. But Tammy says she doesn’t expect to ever have enough money to pay for that care.

Recently, she said, she looked into an assisted living facility near her home in Murrieta, California. She says placing her mother at the facility – or others like it – would cost between $7,000 and $10,000 a month out-of-pocket.

Across the country, millions of caregivers like Tammy are looking after a loved one – a relative or a friend. About 53 million US adults are caregivers, according to a 2020 report from AARP.

Sixty-three percent of US caregivers who look after adults said the person they were looking after needed care because of “long-term physical conditions,” the report says.

Since her mother’s diagnosis, Tammy’s life has been turned upside-down.

Ada cannot bathe herself or cook for herself. Most days, she doesn’t even remember who her daughter is.

“All her daily duties are done by me,” Tammy said, caring for her mother all day is like being a prisoner in her own home.

Sooner or later, she said, she will have to move her mother to a long-term care facility and do whatever she can to pay for it.

“I know that I’m reaching a crossroads with my mom’s care, and I’m trying to do this as long as I can,” Tammy said. “But I know the way things are going, and if she’s progressing pretty rapidly, I’m not going to have a choice.”

Ada La Barbera was a teacher for 20 years, so she gets a pension check each month. Tammy puts that money, along with her mother’s monthly Social Security checks, toward bills.

It’s just over $3,300 a month, and along with Tammy’s dwindling savings, it’s barely enough to keep them afloat, Tammy says. She can barely afford her rent.

It’s because of her financial struggles that Tammy has been putting off long-term care for her mother.

Where Tammy and Ada live in California, a home health aide would cost about $137 for one hour of care, according to an online calculator from AARP.

“When you’re on a fixed income, you can’t afford that,” Tammy said. “So I don’t have the luxury to do that.”

A long-term care facility is even more expensive. On average, it costs $10,830 a month to stay at a nursing home and $5,806 per month for an assisted living facility, according to the nonprofit National Investment Center for Senior Housing and Care.

Then there is memory care, where Tammy says her mother belongs.

Memory care facilities are the fastest-growing sector of the senior housing market, according to the National Investment Center. On average, memory care costs just over $7,500 a month, center COO Chuck Harry says.

These facilities offer more hands-on care for people with dementia. They can include special features like locked units that prevent wandering patients from leaving the facility unattended and enclosed outdoor spaces where patients can move about safely.

A nurse comes to see Ada at home every other week. During that 40-minute visit, Ada’s vitals are checked, and her medications are adjusted. Those visits are covered by Medicare, Tammy says.

Medicare is a medical health insurance program that is for people 65 years or older. But Medicare does not cover the cost of a long-term care facility.

And although Ada and Tammy are on a fixed income, Ada doesn’t qualify for other federal safety net programs like Medicaid because Tammy says they are not considered low-income.

For middle-income families, Medicaid goes into effect only after a family has gone through the process of “spending down” their assets until they qualify for the program.

“That is usually the path of anyone going into a nursing home for the long term: spending your own money – which is all out of pocket – and then reaching a Medicaid level of eligibility,” said Susan Reinhard, senior vice president and director of the AARP Public Policy Institute, noting that each state has its own Medicaid program and process.

Until a family qualifies for Medicaid, the program will only cover the medical costs of a stay at a long-term facility, not room and board.

Caroline Pearson, the lead author of a landmark 2019 demographic study called “The Forgotten Middle,” says most middle-income Americans find themselves in a position where they are too “wealthy” to receive Medicaid coverage for long-term care services but too “poor” to afford the out-of-pocket costs of that care.

So why does putting a loved one in a nursing home or an assisted living facility cost so much? Providing long-term care services is expensive, Pearson says, adding that the senior housing industry requires a large workforce of nurses and staff to support it. That is also expensive.

Additionally, as seniors sell their homes and move into these facilities, long-term care facilitators are essentially providing housing, she said. And housing is not cheap.

The senior housing industry also caters to a high-income population, according to Pearson, who is now executive director of the Peterson Center on Healthcare.

“The fit and finish at the buildings … [residents] expect to be really high-end. The amount of amenities and services that are part of that senior housing property … they expect to be high-end,” she said. “The market has seen good returns and then replicated that model.”

And the demand for high-quality, long-term care is only expected to go up as the baby boomer generation continues to age, according to Pearson.

“Most people don’t begin to need long-term care services until between 75 and 85. And so as the baby boomers hit those ages, that is where we’re going to see that demand really explode,” she said.

According to the US Census Bureau, baby boomers – people born from 1946 to 1964 – will all be over the age of 65 by 2030. The oldest members of that generation will be 84 at that point.

In 2019, there were about 8 million middle-income seniors – people 75 and older – living in the United States, Pearson says in her study.

She projects that there will be 14.4 million middle-income seniors in the US by 2029, with 60% expected to have mobility limitations and 20% expected to have “high health care and functional needs.”

“We are going to [have] double the number of middle-income seniors when the baby boomers age,” Pearson said. “Fewer of those baby boomers are going to have spouses or children who live nearby to provide unpaid caregiving support.”

Most family caregivers are spouses or middle-age daughters, the study notes.

At the end of the day, Pearson says, many Americans don’t think about aging until it’s staring them in the face.

“People [think] that they will live healthy and independently until they die, and sadly, that’s just statistically very unlikely for most people,” she said.

Tammy says her family thought they were prepared for the future.

In 1965, Ada married Tammy’s father, Peter “Jazz” La Barbera, an accountant.

“My dad was a very, very good saver, and he did have a little bit of savings,” Tammy said. “He was set just for the future, not for anything unexpected.”

In 1970, Tammy was born in Queens. She and her older brother, Peter Jr., grew up an hour outside New York City.

“We had a small house, and we lived in that house our whole lives, and … we were the perfect family,” Tammy said.

She eventually moved to California, where she had two kids. Her parents followed, along with her brother and his wife.

But soon after the move, Peter Jr. was diagnosed with cancer, and he died a year later. Two years after that, Tammy’s father received a cancer diagnosis and died within seven weeks.

Tammy believes that the physical and financial toll of taking care of her son and husband kickstarted her mother’s health problems. Shortly after her husband died, Ada had a minor stroke and was diagnosed with dementia.

“It’s almost like her grief was so overwhelming. Especially losing her son. I don’t think her brain had the capacity to deal with anything else anymore,” Tammy said.

The stress associated with taking care of a loved one full-time, or even part-time, can have negative consequences, research has shown.

Some of the physical symptoms associated with taking care of someone with dementia include higher levels of depression and anxiety, worse self-reported physical health, compromised immune function and increased risk of early death, the US Centers for Disease Control and Prevention reports.

Over half (53%) of caregivers indicate that a decline in their health compromises their ability to provide care, according to the CDC.

“I have sacrificed 10 years of my life being a caretaker, and I don’t have a life,” Tammy said. “It’s an honor to take care of my mother. But doing this every single day … it’s a lot.”

Tammy is preparing for her own future by taking part in genetic testing that will tell her whether she is more likely to develop dementia like her mother.

“I would like to prepare as much as I can, whether it’s medication or adjusting my life,” she said. “I just don’t want to put my kids through this.”

She would also like to see changes to the system.

Pearson says the solution to the cost issue is not simple and will probably be resolved only through a combination of incremental Medicaid expansion, changes to the senior housing industry and federal subsidies.

AARP’s Reinhard says tax credits for family caregivers could help people like Tammy get a break. Employers could also help by supporting workers who need to stop working to care for a family member or friend.

In September, the US Department of Health and Human Services, through its Administration for Community Living, announced a national strategy aimed at supporting family caregivers, highlighting nearly 350 actions the federal government will take.

The strategy also includes 150 actions that it says local governments, communities and private businesses can adopt to help build a more supportive system.

“Supporting family caregivers is an urgent public health issue, exacerbated by the long-term effects of the COVID-19 pandemic,” HHS Secretary Xavier Becerra said in a news release. “This national strategy recognizes the critical role family caregivers play in a loved one’s life.”

Gal Wettstein, a senior research economist for the Center for Retirement Research at Boston College, says it would be beneficial for middle-income Americans to speak to a financial adviser as early as possible and transfer assets to a family member if they think they might need to enter a long-term care facility in the near future.

This way, if their only option is to spend down their assets to become eligible for Medicaid, they hit that eligibility sooner.

Long-term care insurance is another option, but experts say it’s rarely sold anymore because it is typically more expensive than other kinds of insurance.

Pearson says Americans can plan ahead by investing in long-term care insurance in their 40s for it to benefit them when they will most likely need it, in their 80s.

Wettstein also recommends long-term care insurance.

“[Long-term care insurance] plans are getting harder and harder to sign, but they do still exist. Some insurers will still sell them,” he said.

Ultimately, covering the cost of senior care comes down to families and how much they save for the future, until changes are made by senior housing providers and policy makers.

“We are so far away from having any sort of swift and universal solution,” Pearson said.

For now, Ada is on a waitlist for a spot at a skilled-nursing home about an hour from where they live. If she moves there, her cost of living might be partially covered through a Medicaid program.

Tammy was told that Ada is one of more than 2,000 people waiting for a spot.

“We’re drowning. We’re care workers, and we’re drowning,” Tammy said. “We don’t have help.”