March 16, 2023

Racial Disparities Exist in Long-term Care

The types of long-term care located in various communities are largely driven by what their oldest residents can afford. This has created stark differences in what’s available to White and minority retirees, a new study finds.

Assisted living facilities, despite the high cost, have been the fastest-growing part of the long-term care industry over the past 20 years. In the cities and suburbs, where the vast majority of Americans live, more of these facilities are located in predominantly White communities. Adult day care centers, at less than half the price of assisted living, have also expanded but are concentrated in communities of color.

The research also revealed that bank redlining has contributed to the racial disparities. Historic discrimination in mortgage lending has made it difficult for Black and Hispanic workers to accumulate the home equity they can use later to finance more comprehensive forms of long-term care. Government programs also play a role in what’s available: some states get waivers to use federal funds from the Supplemental Security Income program to subsidize adult day care for low-income retirees.

The essence of this study is the contrast in long-term care facilities in White versus minority communities at a time the industry is increasingly privatized – and expensive. The options that are available in each community reflect to a large extent their residents’ socioeconomic status.

The best example is assisted living facilities in which older people rent an apartment and receive assistance with their activities of daily living – dining service and help with a wheelchair or personal care like housekeeping, showering, and dressing – that don’t require a nurse’s care.

The number of assisted living facilities without nursing has more than doubled since 2000, to 26,800 nationwide, the researchers found. Older people who can afford to live in these residences, which are concentrated in White communities in more populated areas, enjoy a comfortable living standard that includes a smorgasbord of scheduled activities, without having to rely on their adult children to take care of them.

The racial disparity in long-term care is starkest when comparing these permanent residences with a much more affordable option concentrated in city neighborhoods of color: adult day care centers. The centers are often a better choice economically for minority retirees, who tend to have lower incomes and more debt than Whites. Day care costs around $20,300 per year, compared with about $54,000 for assisted living. …Learn More

November 17, 2022

Spouse in Nursing Home Raises Poverty Risk

When nursing home care uses up a widow’s savings, the federal Medicaid program will kick in and cover her bills for care. But it’s more complicated for couples.

If one spouse moves into a nursing home and the bills start piling up, the person who is still living in their home can face serious financial hardship and even poverty.

This is a significant risk facing the one in three married people in their early 70s whose spouse will eventually wind up in a nursing home, researchers at RAND found in a study on the financial impact on couples rather than individuals.

It’s not unusual to pay roughly $90,000 for a year for a semi-private in a nursing home, though many people have relatively short stays. A common misconception about Medicare is that it covers all nursing home bills. It does not. The program pays for just 100 days of care in a skilled nursing facility and only after someone has been in the hospital and needs more time for recovery or rehabilitation.

High-income retirees pay directly for care that doesn’t follow a hospital stay, because in most states Medicaid kicks in only after couples deplete all but about $3,000 in savings to cover the cost of the nursing home. There is one significant protection for couples under Medicaid’s eligibility rules: their home does not count as an asset as long as a spouse continues to live there.

But if an unlucky couple has high out-of-pocket spending due to a long stay in a nursing home, the researchers found that it increases the chances they will run through virtually all of their savings and become impoverished. While poverty is far less likely for higher-income couples, they are not immune. …Learn More

October 28, 2021

Boomers Will Struggle with Care in Old Age

The bulk of care for the nation’s elderly is informally provided by spouses, adult children, and other family members. But if family can’t fill the need, will retirees be able to hire an in-home caregiver or pay for a nursing home in the future?

Just one in five 65-year-olds has enough family and financial resources combined to provide the support they would require in the event they develop the most severe care needs as they age, according to new research by the Center for Retirement Research. At the other extreme, more than one in three will have insufficient resources to cover even a minimal amount of care.

The study builds on previous report showing that most retirees will eventually need some care, though only one in four is predicted to have severe needs. And one in five will not need any care. The new study used data from a national survey of older Americans to determine how many total hours of care are required for three different levels of need – minimal, moderate and severe.

For example, 924 hours of family or professional care per year are used by the typical person who gets minimal assistance, such as housekeeping or cooking for a few weeks or months. But people with severe needs receive nearly 2,300 hours of care per year – with half supplied by family members. This would add up to more than 11,000 hours over a five-year period, which is the length of time the researchers used to define severe care needs.

Next, the researchers calculated how many hours of care could be covered informally by family and how many hours of formal care the retirees could purchase with their income and any financial assets. If the total hours of care they can cover with their resources fall short of what is required for a given level of need, then retirees have insufficient resources to meet that need.

Unmarried women are in the toughest position, because they lack not only a spouse to take care of them in old age but also the financial advantages enjoyed by married couples, who tend to be wealthier than single people. Over half of unmarried women will not be able to cover even minimal care needs. In contrast, only a third of couples could not provide for any future care.

There are also big disparities by race: nearly half of older Black Americans and two-thirds of Hispanics do not have the family and financial resources to provide at least minimal care, compared with only a third of whites. …Learn More

September 16, 2021

Retirees’ Need for Caregivers Varies Widely

Nothing causes dread in a retiree quite like the prospect of having to go into a nursing home someday or becoming dependent on someone who comes into the house to help with routine daily needs.

But media reports or studies with alarming predictions of infirmity in old age are not very useful to retirees or their family members. A new study provides a more nuanced picture of the various scenarios that can play out.

Researchers at the Center for Retirement Research estimated that roughly one in five 65-year-olds will die without using any care, and another one in five will need only minimal care.

But one in four will have such severe needs that they will require high intensity support for three years or more. The largest group of people – 38 percent – will fall somewhere in the middle: they are likely to need a moderate amount of care for one to three years. A strong indicator of how much assistance someone will require is whether they are healthy in their late 60s.

To determine future need, the researchers combined two dimensions of care: intensity and duration. The intensity of care varies widely. Many retirees can remain largely independent if they hire someone for a couple days a month to clean house or manage their finances, while others will need round-the-clock support.

The duration of care also varies. The researchers divided duration into three categories: less than a year, one to three years, and more than three years. Many retirees need assistance for only a few days or weeks after being released from the hospital. But others, including people who develop severe disabling conditions such as dementia, may need years of care.

The researchers used 20 years of biennial surveys of older Americans and data on caregivers to predict the share of 65-year-olds who will have minimal, moderate, or severe lifetime needs.Learn More

December 1, 2020

Caring for a Parent Can Take Financial Toll

Last spring, as COVID-19 tore through the nation’s nursing homes, many people agonized over whether to pull their elderly parents out and assume responsibility for the care.

The fall surge in the virus is no doubt causing more handwringing as adult children again weigh the challenges of home care against concerns about their parents’ physical and mental well-being.

One practical consideration is the impact on the work lives of parental caregivers, who are overwhelmingly women. Recent research has found that “there are long-term costs associated with caregiving reflected in [lower] earnings even long after caregiving has taken place.”

The research involved women in their 50s and 60s with at least one living parent or in-law, though they generally provided care to a parent rather than an in-law.

Workers sometimes downshift their careers in the years prior to retiring, but caregiving can affect whether older women work at all, the researchers found. Among the caregivers they followed, the share who were working fell by nearly 2 percentage points, to about 56 percent, after their duties began. And the caregivers who remained employed worked fewer hours after taking on a parent’s care.

Women also earned less over the long-term if they had spent time as a caregiver. They saw about a 15 percent decline in their earnings by the age of 65 – or nearly $1,800 per year, on average – according to an update of a study initially funded by the Social Security Administration with subsequent funding from the Sloan Foundation. …Learn More

December 10, 2019

Nursing Homes: Why They Cost So Much

One of retirees’ biggest fears is that they will have to go into a nursing home. This fear isn’t just psychological – it’s also financial.

Roughly half of older Americans will find themselves in a nursing home at some point, according to a 2015 estimate. These stays usually last months, but sometimes years, and the costs add up quickly for those who have to pay for them out of their own pockets.

At an average price of at least $225 per day for a semi-private room, a nursing home stay can put a big dent in retirees’ savings.

A new study in the journal Medical Care Research and Review on how much seniors pay out-of-pocket for facilities in eight states – California, Florida, Georgia, New York, Ohio, Oregon, Texas, and Vermont – found that prices across the board are rising at about two times the general inflation rate.

Some of the fastest price increases are in California and Oregon – 5 percent to 6 percent a year. There is also a large disparity between high- and low-cost states: the price tag for a typical New York nursing home is more than double the cost in Texas.

Yet little is understood about what’s behind the disparities. In this study, conducted for the Retirement Research Consortium, the researchers begin to uncover some of the things that determine whether an individual happens to live in a high-cost state.

One factor affecting the prices is the competitiveness of each nursing home market, which works in ways one would expect. When a small number of operators dominate in local markets, they can charge more. The results also suggest that prices are higher in markets where limited competition is combined with a high demand for beds.

Another important factor is who owns the nursing homes, and each state has a different mix of private and non-profit chains and smaller operators. For-profit companies own about 70 percent of U.S. nursing homes. More than half of the for-profit facilities are chains, and these chains charge the lowest prices.

The non-profit chains are the most expensive. Their prices, adjusted for staffing levels, location and other facility-level factors, are about 6.6 percent more than the for-profit chains – or about $4,160 more annually – the study found. …Learn More

May 16, 2019

Social, Economic Inequities Grow with Age

Retirement, as portrayed in TV commercials, is the time to indulge a passion, whether tennis, enjoying more time with a spouse, frequent socializing, or civic engagement.

Boston University sociologist Deborah Carr isn’t buying this idealized picture of aging.

“This gilded existence is not within the grasp of all older adults,” she argues in “Golden Years? Social Inequality in Later Life.” “For those on the lower rungs of the ladder,” she writes, retirement is “marked by daily struggle, physical health challenges and economic scarcity.”

Her book, which mines multidisciplinary research on aging, reaches the distressing conclusion that economic inequality not only exists but that it becomes more pronounced as people age and become vulnerable. And this problem will grow and affect more people as the population gets older.

Poverty has actually declined among retirees since the 1960s. But by every measure – health, money, social and family relationships, mental well-being – seniors who have a lower socioeconomic status are at a big disadvantage. They have more financial problems, which creates stress, and they are more isolated and die younger.

Throughout the book, Carr documents the myriad ways the disparities, which begin at birth, reinforce each other as people grow up and grow old.

“Advantage begets further advantage, and disadvantage begets further disadvantage,” Carr concludes. For the less fortunate, “old age can be the worst of times,” she said. …Learn More