We Can't Forget the Unpaid Caregivers

Loretta Belfiore, 61, of Altamonte Springs, Fla., was her mother's caregiver in the elder woman's final years; now she takes care of her husband, Tom, 77, who is dying of cancer Photograph by Hilda M.Perez/Orlando Sentinel/MCT via Getty Images

Big numbers grab attention. Like $450 billion. That’s the estimated economic value of unpaid work by some 42 million family caregivers in 2009, according to Susan Reinhard, a former community nurse who is now senior vice president for public policy at AARP. To put the sum in context, total Medicare spending in 2009 was $509 billion. Reinhard presented the number at the American Gerontological Society of America annual meeting in San Diego, Nov. 14-18. Some 3,600 researchers from 30 countries gathered to share information and data about aging, with sessions focusing on dementia, Alzheimer’s, nursing homes, risks of falling, and other issues associated with old age. (After two days of these presentations, it’s hard to avoid singing the Rolling Stones lyric “What a drag it is getting old.”)

How about a really big figure: Nearly $3 trillion, or $2,947,636,000,000. That number represents the lost wages, Social Security benefits, and private pensions for men and women ages 50 and over caring for their parents, according to research by the MetLife Mature Market Institute. During a presentation in a dark, cavernous ballroom at the San Diego Convention Center by John N. Migliaccio, director of research for MetLife’s institute, he figured the typical 50-plus caregiver loss averages $303,880 to $324,044 for women and $283,716 for men.

The chasm between the costs of caregiving and other challenges about aging presented at the American Gerontological Society’s annual meeting and the calls in Washington for sizable cuts in Medicare and Social Security as part of any deal for avoiding the so-called “fiscal cliff” is disconcerting. Of course, it’s a really bad idea to saddle an anemic economy with $500 billion to $700 billion in tax hikes and spending cuts starting in 2013. There are plenty of options for evading that unsavory outcome without tossing in entitlements.

Specifically, what about caregivers and their personal finances? After all, we know this for sure in an uncertain world: America’s population is aging. The leading edge of the massive baby boom generation is filing for Social Security and Medicare. More than 19 percent of the population will be 65-plus in 2030, up from 13 percent in 2010. Put somewhat differently, the projected 55 million people 65 and over in 2030 is the equivalent of adding together the current populations of New York and California. Imagine that the Golden State and the Empire State were giant retirement communities. You’d walk around New York City, Buffalo, and Syracuse, drive all over San Diego, Los Angeles, and San Francisco, and all you would see is people 65 and older.

Medicare doesn’t pay for most long-term care bills. Medicaid does pay more than 40 percent of long-term care, but it’s a means-tested poverty program. Middle-class families fall into impoverishment before they can qualify. Private long-term care insurance premiums are too steep for many middle-class family budgets. Families are stepping in at a huge personal economic cost. “Providing personal care can be a demanding task that is incompatible with a full-time job or with any type of paid employment,” according to a 2011 Organization for Economic Cooperation and Development report, Help Wanted? Providing and Paying for Long-Term Care. “Available jobs might not be flexible enough in terms of working hours or leave options to accommodate caring responsibilities. Caring duties might be unpredictable in terms of their intensity, leading to absences from work.”

The job isn’t easy. Caregivers spend time navigating and coordinating health care for their aging parents. The medical establishment has outsourced many traditional nursing tasks to caregivers, too, such as managing medications, administering intravenous fluids and injections, changing bandages and cleaning surgical wounds, and so on. It’s hardly surprising that mental health problems reported by caregivers are 20 percent higher than among non-carers across the OECD countries. The gap widens to some 80 percent in the U.S. for caregivers 50 years and up that spend 20 or more hours taking care of their elderly parents.

The financial price paid by caregivers is likely to grow in coming years. First, with the aging of the baby boom population, more people are likely to find themselves called on to be caregivers. Second, the lesson of the two bear markets and two recessions in less than a decade is that people need to work during the traditional retirement years. That said, what are the caregivers supposed to do? Turn their backs on their families? The ethical returns to caregiving are huge but the economic costs are substantial. Save more and work more isn’t realistic advice for them.

To be clear, there are no easy answers when it comes to health-care budgets, an aging population, and caregivers. For example, the voluntary national long-term care insurance program that was part of the Affordable Care Act has been suspended as unworkable. The Family and Medical Leave Act guarantees some workers 12 weeks of unpaid leave, but the combination of limited coverage and a tough job market has limited its impact. Many European nations deal with the issue through a mandatory universal public benefit financed with payroll taxes, premiums, and general tax revenue. The word “mandatory” is toxic in Washington following bruising battles over President Obama’s signature health-care reform legislation. Private long-term care insurance is too expensive and too complicated for the mass of middle-class families.

The likely outcome is that more health-care dollars will move away from high-cost treatments and expensive professional providers and more toward home health care, community resources, and caregivers. The money is available, especially considering the U.S. spends twice as much on health care as its peers among the major industrialized nations. The real limit isn’t the public purse. It’s how much more of the financial price family caregivers can absorb while taking care of their loved ones.

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