More women are impacted by long-term care compared to men. In 2018, the top insurance companies paid over $10.3 billion in benefits from Long-Term Care Insurance policies. A majority of those are women. Most caregivers start out being either wives, daughters or daughters-in-law because men generally need extended care before women.
Why are women impacted more than men? Longevity. The fact is women live longer than men do. Women also thrive in a care environment more than men. Women are the first caregivers. The bottom line is women are less likely to have a caregiver at home when they need it placing tremendous pressure on savings, income and lifestyle.
Life Expectancy Translates to Higher Risk of Long-Term Care
A longer life expectancy for women translates to higher rates of chronic health problems and long-term care. Many experts will tell you long-term care is a women’s issue and advance planning is essential.
It is true that life expectancy is usually considered a good thing. However, as longevity increases, the need for elder care continues to grow. Without advance planning the caregiving usually falls on the lap of a woman. This places a huge additional burden on women who are also in the workforce, have a spouse and children all at the same time. Many of these women are forced to cut back on working or leave the workforce entirely to be a full or part-time caregiver.
A new study, “Women Working Longer: Labor Market Implications of Providing Family Care,” by Sean Fahle, PhD, assistant professor in the Department of Economics at the University at Buffalo’s College of Arts and Sciences, and Kathleen McGarry, PhD, of the University of California, Los Angeles, found women caregivers were 8 percent less likely to work, and that after providing care, were 4 percent less likely to be working. The study was presented at the Women Working Longer Conference hosted by the National Bureau of Economic Research.
The study found that caregiving is increasing, meaning more current generations of women are more likely to provide care than women before them.
“Millions of people are providing care for their parents or parents-in-law.”Sean Fahle, PhD, assistant professor in the Department of Economics at the University at Buffalo College of Arts and Sciences
Fahle and McGarry used data from the Health and Retirement Study from the University of Michigan, which has been tracking participants for more than 20 years. The data used in the study from 9,498 people showed that about one-third of the women had provided care for an elderly parent, parent-in-law or spouse.
What Is Long-Term Care?
This long-term care involves helping a person with what are referred to as “ADL’s”- Activities of Daily Living. These activities such as eating, bathing or dressing. Caregiving for a parent peaks around age 56, while caregiving for a spouse does not become widespread until the late-60s.
With the aging American population, demand for care will increase, Fahle said. The U.S. Department of Health and Human Services say if a person reaches the age of 65 they will have a 70% chance of needing some type of Long Term Health Care service. Estimates suggest 20 percent of these people will need help for five years or more. And most of this help will come from wives and daughters unless those people what Long-Term Care insurance or substantial assets.
Doesn't Health Insurance and MedicarePay for Long-Term Care?
Health insurance and Medicare(health insurance for those 65 and older) will only pay for a small amount of skilled care and only if a person is improving. Most extended care is custodial (help with ADL’s or supervision due to memory) and health insurance and Medicarewill not pay for those costs. Medicaid, the medical welfare program, will pay for custodial care but only if you are poor or go through the Medicaid spend-down of assets. Long-Term Care insurance will pay for extended health care but too few people start shopping for a policy until they are older and less healthy … which is usually too late.
“People are living longer, Alzheimer’s is projected to increase, and meanwhile family sizes are shrinking, so the burden of caregiving is falling on fewer children.”
“Scenarios look somewhat gloomy in many ways going forward.”Sean Fahle
Other studies by insurance companies also show dramatic economic losses. The National Association of Insurance Commissioners reported this year that 10 percent of caregivers cut back on hours worked because of the demands of caregiving while an estimated 6 percent left paid work entirely. Seventeen percent of caregivers take a leave of absence, and 4 percent reportedly turn down promotions.
Figures from a survey by Genworth Financial (which sells Long-Term Care insurance) were even starker: 11 percent of caregivers lost their jobs due to caregiving, and 52 percent had to reduce work hours by an average of 7 hours per week, the study cited.
Cost of Long-Term Care Adversely Impacts Savings, Income and Lifestyle
Many experts suggest Long-Term Care insurance not only safeguards retirement income and assets but eases the burden on these women who often, by default, become caregivers. The cost of paid care services drain savings and reduce income and lifestyle The cost does vary depending on your location. The LTC NEWS cost of care calculator will tell you the current and future cost of long-term care services and supports. Click here to find your state.
The economic value of the care given by family members is astounding. A 2011 study by Reinhard L. Feinberg, A. Houser, and R. Choula, for the AARP Public Policy Institute, estimated the value of informal care in 2009 exceeded $450 billion, more than twice the estimated value of formal care.
The growing number of women giving care to their elders should lead to people planning for extended care options which benefit both the person who requires care and the family members who without an advance plan become default caregivers.
Long-Term Care Insurance is easy, affordable and rate stable income and asset protection. These policies are custom designed. Since premiums can vary over 100% between companies for the exact same coverage you should seek the help of a qualified Long-Term Care Insurance specialist. Find a specialist by clicking here.
Items to Discuss with a Long-Term Care Specialist:
- Partnership – Most states offer special policies that provide dollar-for-dollar asset protection. The Long-Term Care Insurance Partnership Program might be one of the best-kept secrets in retirement planning. Make sure the specialist explains this program and how it might help you.
- Tax incentives – There are federal tax incentives available for some people. If you own your own business be sure to ask.
- Health Savings Accounts – If you have an HSA you can use the pre-tax money in your account to pay for the premium.
- Asset-Based or Hybrid policies – These are life insurance or annuities with a rider for long-term care. Careful, only a handful are actually a long-term care benefit. However, one of these policies can provide you with the flexibility of both a long-term care benefit or a death benefit. They are expensive but can be paid with a single premium.
- Health and Family History - Make sure the specialist asks you detailed questions about your health, family history, and retirement plans. Underwritingcriteria varies with each insurance company. If they are not asking you detailed questions then find another specialist.
Research Starts with Knowing the Costs and the Impact on Your Savings
Take a moment and find the current and future costs of long-term care in the area you live in. This will help you decide the amount of coverage is appropriate for you in your situation. For example, if you have a defined pension when you retire the amount of benefits you would need for long-term care would be less than an individual who will fund their future retirement with earnings off investments. In that case, protecting the principal is essential since that will produce your future income.
Find your state and use the LTC NEWS cost of care calculator by clicking here.
It is always best to start planning before you retire. Once you have your plan in place you will enjoy peace-of-mind and your family will thank you decades from now.