Caregiving and an aging population: How can government help?

An increasing number of older Americans will need long-term care at some point, with most of the care performed by unpaid family members. What types of public policy should be put in place to support an aging population and its caregivers? A recent webinar by The Harkin Institute looked at some options.

A 65-year-old has a 20% chance of needing high-level care for a period of 1-3 years over their lifetime, said Angie Chen, associate director of savings and household finance with the Center for Retirement Research at Boston College. Family members provide most of that care, even for those with intense care needs.

But many older Americans who need care may find themselves running short of resources to pay for their needs, she said. Even with informal support and Medicaid, between 34% and 46% of those 65 and older risk having their resources run short of their care needs.

Women are more likely than men to fall short of the resources they need for their care needs, she said. This is particularly true of married women, who are more likely to outlive their husbands who also had care needs during their lifetimes. Chen explained that a man who needs care during his lifetime is more likely to use up household resources for his care, leaving fewer resources for his widow.

How can government support caregivers?

Chen said the Center for Retirement Research surveyed caregivers and found that the public policy that would help them most would be direct payments from the government to caregivers for providing family caregiving to an older adult.

Other public policy initiatives that caregivers want include:

• Reimbursement for costs related to caregiving.
• Paid respite care.
• Receiving a “caregiver credit” toward earning Social Security benefits.
• A tax credit for caregiving an older adult.
• Paid family and medical leave or expanded paid sick leave.

Family caregiving isn’t free

Family caregiving comes at a cost, said Benjamin Veghte, director of the WA Cares Fund, Washington state’s public long-term care insurance program. He cited statistics that reveal:

• Almost half of family caregivers report a related financial setback.
• The average caregiver spends 25% of their own income on care-related expenses.
• Caregivers aged 50 and older who leave the workforce early due to caregiving responsibilities lose an average of $303,880 in wages and benefits.
• Two in three working caregivers said a program that pays caregivers would help their family.

“It destroys your own retirement security when you do this work for your loved ones,” Veghte said.

Even though family members take on the bulk of caregiving responsibilities, families are increasingly unable to meet long-term care needs, he said. The number of potential family members available for each person who needs care will drop to 3 to 1 in 2050 from 7 to 1 in 2010.

“This problem is only going to get worse,” he said. “The segment of the population ages 85 and up is expected to quadruple in 25 years. Family caregiving won’t fill the gap because there won’t be enough people ages 45-60 to perform the care.”

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.