Posts Tagged "elderly"

Tapping Home Equity – Retirees’ Relief Valve

Woman getting a prescriptionOne telling indication that retirees are in serious financial straits is when they take less of their medications or don’t fill prescriptions.

Nearly one in four low-income retirees has difficulty paying for medications, despite passage of Medicare Part D in 2006, which reduced out-of-pocket drug costs. Between 2011 and 2015, the average Medicare beneficiary spent $620 to $700 a year on prescriptions, and people with diabetes, lung disease, and cardiovascular disease spent more than $1,000 a year.

One way retirees can address such hardships would be to tap some of the equity in their homes. Although a homeowner probably wouldn’t use this strategy just to cover drug copayments, new research finds that older Americans who tap equity significantly increase their adherence to their medications – and this finding has broader significance for improving their retirement security.

Most older homeowners are, on the one hand, reluctant to pull cash out of their homes – often their largest asset – through a home equity loan, mortgage refinancing, or reverse mortgage. Yet many of them don’t have enough income to live comfortably and could put this asset to good use to reduce their debt or pay medical bills if they become seriously ill.

To test how home equity might help retirees, the researchers used a series of surveys between 1998 and 2016 that have data on older people’s finances and ask whether, at any time in the past two years, they took “less medication than prescribed … because of the cost?” The analysis controlled for various influences on financial well-being, including education, marital status, and cognitive health, as well as financial resources.

Extracting home equity improved adherence to medications in the short term, particularly for homeowners over 65 who have little wealth outside of their homes. Separately, the researchers showed that retirees who tapped home equity were significantly more likely to take their medications at a critical time – after experiencing a serious illness.

“Housing wealth can play an important role in reducing economic insecurity,” concluded the study, which was funded by the U.S. Social Security Administration. …Learn More

People in a nursing home

People Don’t Save for a Nursing Home Stay

About 13 percent of the older people in a recent study – average age 74 – who were initially living independently moved into a nursing home within five years.

Perhaps because they know their vulnerabilities, their expectations of whether they would one day need nursing home care helped predict their actual nursing home use, the study found.

In fact, the researchers said, the accuracy of the predictions showed that the older people must have taken into account personal information that went beyond what was apparent in the 1998-2016 survey data used in the study, which included details about their health, ease of functioning, and other influences on whether they need care.

However, foresight did not translate into facing up to the financial implications of a nursing home stay.

Nursing homes are expensive, currently averaging $7,700 per month for a room that is shared with another resident. The 10 percent of older people with a private long-term care insurance policy can pay for their care. Poor people’s nursing home expenses are covered by Medicaid.

It’s the people who fall outside these two groups who aren’t always clear about how to pay for a nursing home stay if they need it. Their lack of preparation for this expense was underscored in another of the study’s findings: the people who say they’re more likely to go into a nursing home were no more likely to have built up their savings to pay for it.

Of course, Medicaid is also a backup plan for nursing home residents who start out paying for their care but run through all of their savings. This study helps to explain why Medicaid covers six in 10 nursing home residents.

To read this study, authored by Padmaja Ayyagari and Yang Wang, see “Nursing Home Use Expectations and Wealth Accumulation Among Older Adults.”Learn More

Diverse Population Uses Nursing Homes Less

Son with father in wheel chair

Since the 1980s, the share of the U.S. population over 65 has grown steadily. At the same time, the share of low-income older people living in nursing homes has declined sharply.

New research by the University of Wisconsin’s Mary Hamman finds that this trend is, to some extent, being driven by an increasingly diverse population of Hispanic, Black, Asian, and Native Americans. They are more likely to live with an adult child or other caregiver than non-Hispanic whites, due, in some cases, to cultural preferences for multigenerational households.

Nursing home residence is also declining among older white Americans. However, in contrast to the Black population, whites are increasingly moving into assisted living facilities. This creates what Hamman calls a “potentially troubling pattern” of differences in living arrangements that might reflect disparities in access to assisted living care or perhaps discriminatory practices. Notably, the researcher finds that the Black-white gap in assisted living use persists even when she limits her analysis to higher-income adults.

Eight states have seen the biggest drops in nursing home use: Florida, Georgia, Louisiana, New Jersey, New Mexico, North Carolina, South Carolina, and Tennessee. Many of these states have experienced fast growth in their minority populations or have more generous state allocations of Medicaid funds for long-term care services delivered in the home.

Growing diversity is actually the second-biggest reason for lower nursing home residence, accounting for one-fifth of the decline, according to the study, which was funded by the U.S. Social Security Administration and is based on U.S. Census data.

As one might expect, the lion’s share of the decline – about two-thirds – is due to policy, specifically changes to Medicaid designed to encourage the home care that surveys show the elderly usually prefer. …Learn More

Home Care Reform’s Outcome a Surprise

Image of nursing home staff

Medicaid pays for care for six out of 10 nursing home residents.

To reduce the program’s costs, the Affordable Care Act (ACA) encouraged states to expand the care that people over 65 can receive in their homes or through community organizations. The hope was that they would delay or – even better for them – avoid moving into a nursing home if they had easier access to medical and support services.

Many states historically did not use Medicaid funding to pay for home care. The ACA’s Balancing Incentive Payments Program required the 15 states that chose to participate in the reform, including Nevada, Texas, Florida, Illinois, and New York, to increase spending on home and community care to half of their total Medicaid budgets for long-term care. By the end of the program, the states had met their goals of more balanced spending on home care versus nursing home care.

But four years after the reform went into effect in 2011, the states’ nursing home population had not changed, compared with the states that did not expand their services, according to a University of Wisconsin study for the Retirement and Disability Research Consortium. The researchers said one possible reason the reform didn’t reduce nursing home residence was that people who were never candidates for this care were the ones taking advantage of the alternative forms of care.

The analysis did find other unintended consequences of the shift in Medicaid funds to home and community care. First, somewhat more older people moved out of a family member’s house and were able to live on their own.

Second, as more people moved into their own place, costs may have increased for a different federal program: Supplemental Security Income (SSI) for low-income people. The increase had to do with how this program calculates financial assistance. SSI’s monthly benefits are based on an individual’s income. When retirees decide to live on their own, the housing, meals and other supports the family once provided are no longer counted as income. The drop in a retiree’s income means a bigger SSI check.

On the other hand, the Medicaid reform may have financial benefits for caregiving families, the researchers said.

The greater availability of home and community care for seniors – whether they live with family or on their own – frees up time for their family members to earn more money at paying jobs. …
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Nursing home sign

How COVID-19 Spreads in Nursing Homes

The coronavirus has pulled back the curtain on longstanding problems in nursing homes. In 2014, the Inspector General for the U.S. Department of Health and Human Services had reported that more than one in five seniors in skilled nursing facilities experienced “adverse events.” These included poor medical care, patient neglect, and inadequate infection control, which frequently sent residents to the hospital.

Now, some nursing homes have become COVID-19 hotspots. This has contributed to disproportionate numbers of deaths among people over age 70, who may also have weakened immune systems that make them more susceptible to the virus or underlying medical conditions that increase their mortality rate.  

Anthony Chicotel, a staff attorney with California Advocates for Nursing Home Reform, discussed what he’s seen in nursing homes in the months since the pandemic began.  

Briefly, Tony, name the big three underlying problems you feel caused the virus to spread. 

Chicotel: No. 1 is chronic understaffing to meet the needs of the residents and to perform all the basic functions required every day. No. 2 would be a tolerance for poor infection control practices. This flows from No. 1 because good infection control requires time, and it’s one of the things that gets cut when you’re pressed for time. No. 3 might be the practice of staff working in multiple facilities. Because they are often low-paid, it’s not unusual for them to work for two different companies that do nursing home care, or they might also work for an assisted living provider. This cross-pollination contributes to the spread of the virus among facilities. We’ve also learned that most of the staff who had the coronavirus have been asymptomatic.

The problems in nursing homes are not new?

Chicotel: I think we should’ve anticipated this. Coronavirus has brought all this out into the open but the Centers for Disease Control cites a a pre-pandemic study that found that up to 388,000 nursing home residents die each year resulting from poor control of infections such as Methicillin-resistant bacteria (MRSA) and urinary tract and respiratory infections. We’ve just accepted this staggering breakdown of infection control for a long time. I’m an advocate, and it wasn’t something I really focused on either. It’s been begging to be addressed in a significant way for some time.

Talk about infection control. In this pandemic, everyone is aware that hand washing is critical to stopping the virus. You cited a report by the Centers for Medicare and Medicaid Services (CMS) that 36 percent of long-term care facilities do not comply with hand-washing protocols and 25 percent do not comply with protocols for personal protective equipment (PPE).  Learn More

Retiree Living Standards, Ranked by State

How well you will live in retirement will depend on two things: your income and the local cost of living.

A new study that ranks each state based on how many of its retirees can meet a basic standard of living comes up with an interesting combination of places that are financially friendly – or not – to people over 65.

For example, who would expect Mississippi to be in the same company with California?

The cost of living in Mississippi is much lower than in California – and most states. But 31 percent of Mississippi’s retired single people and 24 percent of its retired couples fall into what the study calls the “gap” between being poor and having barely enough income to cover their basic expenses, according to a 50-state analysis by the University of Massachusetts’ Gerontology Institute in Boston.

Map of retired couples in the gap between poor and comfortableA general way to think about the people inhabiting this gap is that, while they are above the poverty line, they are still financially insecure.

“A lot of the folks who find themselves in the gap were middle class,” said Jan Mutchler, a U-Mass Boston professor and institute staff member. They have pensions or other income in addition to Social Security, she said, “and yet they’re still struggling.”

When the poor are added in, a total of 57 percent of Mississippi’s retired singles and 30 percent of its couples do not have the income required to pay for all of their essential household expenses, according to the analysis.

Like Mississippi, the share of older Californians who are feeling financially insecure is also one of the highest in the country: 34 percent of single people and 22 percent of couples. When poor retirees are included, the numbers rise to 54 percent and 27 percent, respectively.

Many people in California and Mississippi are having a difficult time – but for very different reasons. …Learn More

A drawing of a hand holding a heart

States Give Financial Help to Caregivers

On Jan. 1, Arizona residents caring for elderly or disabled family members became eligible for up to a $1,000 reimbursement from the state for expenses incurred in their caregiving responsibilities.

This is a trial program and the legislature allocated very little money – $1 million over two years – in a state with an estimated 800,000 residents caring for a disabled adult over 18.

But it’s a start.

Caregivers “aren’t asking for everything. They’re asking for a little bit to make their lives better,” said Elaine Ryan, vice president of government affairs for AARP, which has been on the forefront of advocating for such policies at the state level. “That’s the least we can do.”

Arizona’s program would defray a portion of caregivers’ spending. For older family members, this would cover technologies to aid older family members, such as hearing aids or computer programs, or shower grab bars and wheelchair ramps.

Graphic of caregiver expenses

Like Arizona, state governments around the country, as laboratories for policy experimentation, have passed a hodgepodge of programs to support caregivers. Other bills approved in recent years range from New Jersey’s tax credit for military families caring for wounded veterans to Oregon’s paid family leave program for workers taking care of aging spouses, parents and grandparents.

The programs are a tacit acknowledgment of the enormous financial strain caregivers face – a strain that is only expected to grow and, increasingly, to affect Millennials as their baby boomer parents age.

However, it’s not easy to pass bills that require states to approve financial assistance or tax credits, because the work done quietly by family caregivers is often invisible and under-appreciated by the general public and federal and state legislators. …Learn More