Group: Millions face overwhelming long-term care costs

Gail Marksjarvis
Chicago Tribune

With millions of baby boomers and their children at risk of being devastated by long-term health care costs, a nonpartisan group has announced that it is pushing for a new national universal care policy.

Among the possibilities considered by the Long Term Care Financing Collaborative would be getting employers to automatically enroll their employees in long-term care insurance policies at work, with employees paying regularly toward insurance from each paycheck. The goal would be to get insurance companies to offer long-term care insurance again after fleeing the market during the last few years, and getting people to enroll in more affordable insurance than has been offered previously. The government would play a role in covering the most drastic, or catastrophic, risks.

Most Americans do not realize that Medicare and other health insurance won’t take care of the bathing, dressing and other help seniors often end up needing as they become frail or suffer debilitating diseases like Alzheimer’s later in life. They and their families are left with crushing financial burdens.

“People solidly in the middle class are facing poverty,” said Sheila Burke of the Harvard Kennedy School, one of 25 members in the collaborative.

According to the group’s research, about half of all senior citizens will need to spend about $138,000 for personal care over two years. Yet, for one in seven, five years of care becomes necessary, and the cost “is far beyond the ability to pay,” said Howard Gleckman of the Urban Institute. The five-year cost can exceed $250,000.

Given the tremendous costs, relatives often pick up the burden of caregiving and can be injured lifting people, lose jobs and miss opportunities at work to accumulate their own retirement savings. The group emphasized that family responsibility will continue, but the collaborative wishes to lessen the burden. The Urban Institute has estimated that services delivered by family members total about $470 billion a year.

“A woman in her 50s who leaves a job to care for aging parents loses an average of $300,000 in lifetime income,” the collaborative reported. “Unpaid family caregivers lose an estimated $3 trillion in lost lifetime wages and benefits,” while employers suffer $17 billion to $33 billion in lost productivity and absenteeism.

“Families play an essential role,” said William Galston of the Brookings Institution. “They are on the front line and will remain on the front line.”

Various groups have been looking at the nation’s growing long-term care needs for years as seniors live longer and insurance companies have left the costly business of insuring them. States are facing alarming growth in Medicaid costs. Medicaid is the welfare program people enter when they have run out of their own assets. Medicaid spent $146 billion — 34 percent of its budget in 2013 — on long-term support and services for old adults and younger people with disabilities. While eligibility differs by state, the typical beneficiary is limited to $2,000 in assets and $723 a month in income.

Because of the tremendous costs involved with many long-term care proposals and political disputes about who should be responsible, groups studying the problem have walked away after initial policy meetings.