Facing financial ruin as costs soar for elder care

(Dying Broke)

Margaret Newcomb, 69, a retired French teacher, is desperately trying to protect her retirement savings by caring for her 82-year-old husband, who has severe dementia, at home in Seattle.

Feylyn Lewis, 35, sacrificed a career as a research director in England to return home to Nashville, Tennessee, after her mother had a debilitating stroke. They ran up $15,000 in medical and credit card debt while she took on the role of caretaker.

Sheila Littleton, 30, brought her grandfather with dementia to her family home in Houston, then spent months fruitlessly trying to place him in a nursing home with Medicaid coverage. She eventually abandoned him at a psychiatric hospital to force the system to act.

"That was terrible," she said. "I had to do it."

Millions of families are facing such daunting life choices - and potential financial ruin - as the escalating costs of in-home care, assisted-living facilities and nursing homes devour the savings and incomes of older Americans and their relatives.

The United States has no coherent system of long-term care. The private market where a minuscule portion of families buy long-term care insurance has shriveled. Labor shortages have left families searching for workers willing to care for their elders in the home. And the cost of a spot in an assisted-living facility has soared to an unaffordable level for most middle-class Americans. They have to run out of money to qualify for nursing home care paid for by the government.

For an examination of the crisis in long-term care, The New York Times and KFF Health News interviewed families as they struggled to obtain care; examined companies that provide it; and analyzed data from the federally funded Health and Retirement Study.

Despite medical advances that have added years to the average life span, federal long-term care for older people has not fundamentally changed since President Lyndon Johnson signed Medicare and Medicaid into law in 1965.

Medicare, the federal health insurance program for Americans 65 and older, covers the costs of medical care, but generally pays for a home aide or a stay in a nursing home only for a limited time during a recovery from a surgery or a fall or for short-term rehabilitation.

Medicaid, the federal-state program, covers long-term care, usually in a nursing home, but only for the poor. Middle-class people must exhaust their assets to qualify. If they go into a nursing home, they are permitted to keep a pittance of their retirement income: $50 or less a month in a majority of states. And spouses can hold onto only a modest amount of income and assets, often leaving their children and grandchildren to shoulder some of the financial burden.

"You basically want people to destitute themselves and then you take everything else that they have," said Gay Glenn, whose mother lived in a nursing home in Kansas until she died in October at 96.

Efforts to create a national long-term care system have repeatedly collapsed. Democrats have argued that the federal government needs to take a much stronger hand in subsidizing care. The Biden administration sought to improve wages and working conditions for paid caregivers. But a $150 billion proposal in the Build Back Better Act for in-home and community-based services under Medicaid was dropped to lower the price tag of the final legislation.

The boomer generation is jogging and cycling into retirement, equipped with hip and knee replacements that have slowed their aging. And they are loath to enter the institutional setting of a nursing home. But they face major expenses for the in-between years: falling along a spectrum between good health and needing round-the-clock care in a nursing home.

That has led them to assisted-living centers run by for-profit companies and private equity funds. Some 850,000 people age 65 or older now live in these facilities that are largely ineligible for federal funds and run the gamut, with some providing only basics like help getting dressed and others offering luxury amenities.

The bills can be staggering. Half of the nation's assisted-living facilities cost at least $54,000 a year, according to Genworth, a long-term care insurer. Specialized settings, like locked memory care units for those with dementia, can cost twice as much.

Home care is costly, too. Agencies charge about $27 an hour for a home health aide, according to Genworth. Hiring someone who spends six or seven hours a day cleaning and helping an older person get out of bed or take medications can add up to $60,000 a year.

In Seattle, Margaret and Tim Newcomb sleep on separate floors of their two-story cottage, with Margaret Newcomb ever-mindful that her husband, who has dementia, can hallucinate and become aggressive if medication fails to tame his symptoms.

She considered memory care units, but the least expensive option cost around $8,000 a month, and some could reach nearly twice that amount. The couple's monthly income, with his pension from a utility company and their combined Social Security, is $6,000. Placing her husband in such a place would have gutted the $500,000 they had saved before she retired from 35 years teaching at a parochial school.

"I'll let go of everything if I have to, but it's a very unfair system," she said. "If you didn't see ahead or didn't have the right type of job that provides for you, it's tough luck."

The financial threat posed by dementia also weighs heavily on adult children who have become guardians of aged parents and have watched their slow, expensive declines.

Claudia Morrell, 64, of Parkville, Maryland, estimated that her mother, Regine Hayes, spent more than $1 million during the eight years she needed residential care for dementia. That was possible only because her mother had two pensions from her husband, plus savings and Social Security.

Morrell paid legal fees required as her mother's guardian, as well as $6,000 on a special bed so her mother wouldn't fall out and more on private aides after she suffered repeated small strokes. Her mother died last December at age 87.

"I will never have those kinds of resources," said Morrell, an education consultant. "My children will never have those kinds of resources. We didn't inherit enough or aren't going to earn enough to have the quality of care she got."

The only true safety net for many Americans is Medicaid, which represents, by far, the largest single source of funding for long-term care.

More than 4 of 5 middle-class people older than 65 who need long-term care for five years or more will eventually enroll, according to an analysis for the federal government by the Urban Institute. Almost half of upper-middle-class couples with lifetime earnings of more than $4.75 million will also end up on Medicaid.

But gaps in Medicaid coverage leave many people without care. Under federal law, the program is obliged to offer nursing home care in every state. In-home care, which is not guaranteed, is provided under state waivers, and the number of participants is limited. Many states have long waiting lists, and it can be extremely difficult to find aides willing to work at the low-paying Medicaid rate.

Qualifying for a slot in a nursing home paid by Medicaid can be formidable, with many families spending thousands of dollars on lawyers and consultants to navigate state rules. Homes may be sold or couples may contemplate divorce to become eligible.

And recipients and their spouses may still have to contribute significant sums. After Stan Markowitz, a former history professor in Baltimore with Parkinson's disease, and his wife, Dottye Burt, 78, exhausted their savings on his two-year stay in an assisted-living facility, he qualified for Medicaid and moved into a nursing home.

He was required to contribute $2,700 a month, which ate up 45% of the couple's retirement income. Burt, who was a racial justice consultant for nonprofits, rented a modest apartment near the home, all she could afford on what was left of their income.

Markowitz died in September at age 86, easing the financial pressure on her. "I won't be having to pay the nursing home," she said.

Even finding a place willing to take someone can be a struggle. Harold Murray, Sheila Littleton's grandfather, could no longer live safely in rural North Carolina because his worsening dementia led him to wander. She brought him to Houston in November 2020, then spent months trying to enroll him in the state's Medicaid program so he could be in a locked unit at a nursing home.

Nursing home after nursing home told her there were no beds, or quibbled over when and how he would be eligible under Medicaid. In desperation, she left him at a psychiatric hospital so it would find him a spot.

"I had to refuse to take him back home," she said. "They had no choice but to place him."

He was finally approved for coverage in early 2022, at age 83.

A few months later, he died.

This article originally appeared in The New York Times.