Colorado Families Grappling with Increased Long-Term Care Costs

Colorado is not immune to a growing aging population and a greater demand for long-term care services and supports. The added concern of COVID-19 infection and outbreaks places pressure on Colorado families and their loved ones who need extended health care.

The state has taken steps to assist long-term care facilities with their coronavirus infection problems and the high turnover in staffing they have faced. Colorado has also revised how these facilities get inspected, emphasizing infection control protocols.

The problem of long-term health care is not new in Colorado. People require long-term care services due to an illness, accident, or the impact of aging. According to the CDC, the number of adults in Colorado with some type of disability is less than the national average.

Aging and Health Declines Increasing Number of People Needing Extended Care

The number of people in Colorado with serious cognitive problems is 9.3%, less than the 11.4% reported as the national average. Disability costs in health care expenditures are $4.4 billion per year, much of that in long-term care costs.

Aging and changing health as we get older is a major factor. According to the Colorado Health Institute, one in seven Coloradans (13.8 percent) is age 65 or older. The number of people aged 65 and older will increase to one in five by the year 2050. Between 2010 and 2015, Colorado had the 3rd fastest 65+ growth rate in the United States at over 29%.

Family Members Often Become Caregivers

Today, family members often become the first and primary caregivers, especially with a lack of advance planning. Caregiving is physically and emotionally demanding and includes lifting, bathing, delivering meals, taking loved ones to doctor’s visits, handling problematic behaviors, and managing medications. Family conflicts are common.

According to the Bell Policy Center, by the year 2030, Colorado is expected to have an 115,000-person caregiver gap. The number of older adults in need of care services and supports are growing at a faster rate than those in the age group most likely to be able to provide that help.

As more people require help with daily activities or supervision due to memory decline, more family members in Colorado find themselves in the role of a caregiver. Being a caregiver is physically and emotionally demanding. However, these caregivers, often a daughter or daughter-in-law, face other consequences as their careers and family responsibilities are also affected by their role as caregivers.

This informal family caregiving has a financial impact on the caregivers and their families as they have foregone wages and benefits, expenses, and medical costs. According to an analysis by the Colorado Health Institute, the cost to caregivers totals $4.4 billion.

The problem in Colorado and elsewhere is while the role of caregiver is stressful and burdensome, the job results in lost work hours or lost jobs, high stress, and severe declines in physical and mental health. Caregivers often have a decrease in the quality of their physical, emotional, and social well-being.

Paid Long-Term Health Care Increasing in Demand and Cost

Paid care is often sought to provide long-term care services, either in-home or in various facilities, including adult day care centers, assisted living and memory care facilities, and nursing homes. Professional care can be costly, and these costs are generally not paid by traditional health insurance, including Medicare and supplements. While Medicaid provides long-term care services, you must have low income and few assets to qualify. Colorado spends 22% of its Medicaid budget on long-term care.

Long-Term Care Insurance will pay for this type of care; however, it must be purchased when you have relatively good health, usually in your 40s or 50s - well before any need of care exists.

Ken Jenson, who operates Amada Senior Care in Colorado Springs, says in the last eight years, in-home care services have increased substantially. Now they are facing staffing shortages as demand increases.

"With the minimum wage going up and changes in regulations, I have seen our charges go up quite a bit. Now we are battling the loss of caregivers. All these things will make home care in the future cost even more," Jenson explained.

Colorado will face higher costs for long-term care services in the years ahead. According to the LTC NEWS Cost of Care Calculator, the costs in Colorado are higher than the national average for all levels and types of long-term care.

LTC NEWS Colorado Cost of Care Calculator.

The Boulder area is the most expensive, on average, in Colorado. However, no matter if you live in the Denver area, Fort Collins, Pueblo, Glenwood Springs, or places in between, expect high costs for extended health care and the consequences it will have on your family and finances in the decades ahead.

Colorado LTC Partnership and Tax Benefits

Colorado does participate in the Long-Term Care Insurance Partnership Program. If you own a qualified partnership Long-Term Care Insurance policy, you qualify for dollar-for-dollar asset protection if you ever exhaust all the benefits from the policy. 

There are tax benefits if you own a qualified Long-Term Care policy in Colorado. The state income tax credit is equal to the lesser of 25% of premiums paid for an LTC insurance policy, or $150 per policy. There are limitations, so be sure to check if your tax advisor. Federal tax benefits exist as well. 

There are three types of available products to help pay for long-term health care in Colorado. Traditional insurance (including partnership certified plans), asset-based (hybrid) policies that combine life insurance or annuities with long-term care, and limited duration or short-term plans.

A qualified specialist can assist you in determining which type of plan will be affordable and helpful for you and your family to address the costs and burdens that come with changing health and aging.   

Reverse Mortgages Available in Colorado Can Offer Help

Reverse mortgages are available in Colorado and can be used in several ways that benefit families. Unlike a standard loan, you do not have to make any loan payment with a reverse mortgage. Usually, the loan does not become due until you die, sell the home, or move out.

A reverse mortgage allows a homeowner to convert a portion of their home's equity – the value of your home minus any outstanding debt on the property – into cash. This type of mortgage is one way to fund either Long-Term Care Insurance or the care itself if your need is immediate.

There are rules. You must be at least 62 years or older and live in the home as your primary residence. Plus, you must have sufficient equity in your home to qualify.

Think Long-Term Care When You are Younger

Too many people in Colorado think their families can provide their future care. That is unrealistic. Some people think the government pays for long-term health care and are surprised when they discover that is not the case for most people.  

Medicaid will pay for those with little or no income and assets. Otherwise, unless you own Long-Term Care Insurance, you will either self-fund the cost of care or depend on your family to provide the care.

Experts suggest investigating Long-Term Care Insurance in your 40s and 50s when premiums are much lower, and your good health makes it easier to obtain coverage. Premiums, however, can vary over 100% between insurance companies. Be sure to seek the advice of a qualified LTC Insurance specialist to help you find the best coverage at the best value.