How Rising Costs Are Destroying the Middle Class
The cost of home care and assisted living for older adults and people with disabilities has risen over the past five years, making it more difficult for middle-class families struggling to afford the program, AARP said in a March 12 report.
The AARP report said costs for the most common type of long-term services − home care and assisted living services − will increase nearly 50 percent from 2019 to 2024, far outpacing the 22 percent increase in income for older families.
The cost of some long-term services has also grown faster than the incomes of families who have to pay for this care without public assistance. Day care costs for the elderly have jumped 33 percent, while senior care costs have risen 25 percent, AARP said.
The report details rising costs for “long-term services and supports,” a broad category that describes supportive care such as food, bathing and clothing that people may need due to aging, illness or disability. The authors say the report underscores the unaffordability problem facing millions of families as the cost of services for the elderly and people with disabilities exceeds what families can afford.
“When this attacks, it hits families harder than they expect — and at higher costs,” said Alan Weil, director of AARP’s public policy center.
Families are not ready to pay for long-term care
More than half of adults aged 65 between 2021 and 2025 will need long-term care services in their lifetime, according to the US Department of Health and Human Services.
But families are often ill-equipped to handle the costs of caring for older adults, Weil said.
A 2022 AARP study said nearly half of adults age 50 or older mistakenly believe Medicare, the federal health insurance program for adults age 65 and older, covers nursing home care or home care from a home health aide.
Although Medicare does not cover such costs, Medicaid, the federal-state health program for low-income families, pays for nursing home care for millions of low-income seniors.
But for middle-income families who don’t qualify for Medicaid, costs can rise quickly. About 1 in 7 adults had out-of-pocket expenses of more than $100,000 in 2020, AARP said.
For families that cannot afford to hire home health aides, the burden of care often falls on unpaid caregivers. These caregivers, often family members, will contribute nearly $600 billion in caregiving by 2021, AARP said.
Why the cost of care has increased in this decade
The increase in costs during the five years of the AARP study followed a decade of rising costs of primary care.
States and the federal government have greatly increased Medicaid assistance for long-term care services during the COVID-19 crisis, according to long-term care experts not affiliated with AARP.
The public support was meant to deal with staff shortages in nursing homes and home care facilities during the worst days of COVID-19. Other factors include minimum wage increases that have increased the costs of low-wage workers, including nursing home workers and home health aides.
While many Medicaid payments have been reduced at the end of the pandemic, the Trump administration’s crackdown on immigration has pressured nursing homes and health facilities that rely on immigrant workers, said Marc Cohen, professor of gerontology and director of the LeadingAge LTSS Center at the University of Massachusetts, Boston.
“The people who care for our most vulnerable citizens are being locked out of the system,” Cohen said.
Cohen said the increase in nursing home and home health care often comes equally to people who pay for it themselves. This is because Medicaid often reimburses care at lower prices, and providers seek to offset lower public payments by shifting costs to consumers who pay their own way.
Cohen said it creates financial pressure on middle-class families. Other states like California are learning how to help families with high incomes to qualify for Medicaid but not enough to cover living expenses and the rising costs of long-term care.
“If they needed long-term care, they would be up in the river without a paddle,” Cohen said. “The pressure on the family support system is increasing.”
Families reach ‘breaking point’
The average annual cost of care ranges from $26,000 for day care services to more than $127,000 for an independent nursing home, says AARP.
These costs can be difficult for older adults living on an average Social Security benefit of $23,700 per year and an average annual household income of nearly $60,000.
The report also shows that the cost of services varies from state to state. Home health aide services range from $34,320 in Louisiana to $68,640 in South Dakota.
The report also measures affordability, taking into account how much the service costs and average household income. On that scale, home health aides are more affordable in Maryland and less affordable in Maine.
Weil said the purpose of the report is to highlight long-term home care services that have become less accessible as costs have risen.
He called it a “massacre” for families and caregivers.
“That’s really the problem this report shines a light on,” Weil said. “And I think we have to be honest that part of the problem is that people will go without services.”
This article first appeared in USA TODAY: The home care crisis: How rising costs are breaking the middle class
Reporting by Ken Alltucker, USA TODAY / USA TODAY
USA TODAY Network via Reuters Connect
