AARP said in a March 12 report that the cost of home care and assisted living for older adults and people with disabilities has increased over the past five years, causing affordability for middle-class families who struggle to pick up the tab.
The AARP report says the cost of the most common types of long-term services — home care and assisted living services — is set to increase nearly 50% from 2019 to 2024, far exceeding the average income increase of 22% for senior families.
The cost of other long-term services also rose faster than the incomes of families who have to pay for this care without public assistance. AARP said adult day service costs increased by 33% and the cost of nursing home care increased by 25%.
The report details the rising costs of “long-term services and supports”, a broad category that covers how people may need supportive care such as eating, bathing and dressing due to aging, illness or disability. The authors said the report underscores the affordability crisis millions of families are facing as the cost of services for older adults and people with disabilities exceeds families’ ability to afford them.
“When it hits, it hits families harder than they expected — and at a higher cost,” said Alan Weil, director of AARP’s Public Policy Institute.
Families are unwilling to pay for long-term care
According to the U.S. Department of Health and Human Services, more than half of adults turning 65 between 2021 and 2025 will need long-term care services in their lifetime.
But families are often not prepared to assume the cost of caring for aging adults, Weil said.
An AARP survey in 2022 said nearly half of adults age 50 or older mistakenly believed that Medicare, the federal health insurance program for adults age 65 and older, covered care in a nursing home or home care from a home health aide.
While 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 adults.
But for moderate-income families who don’t qualify for Medicaid, costs can add up quickly. Nearly 1 in 7 older adults’ out-of-pocket expenses exceeded $100,000 in 2020, AARP said.
For families that are not able to employ home health aides, the burden of providing care often falls on unpaid caregivers. AARP said these caregivers, often family members, contributed nearly $600 billion in caregiving in 2021.
Why did the cost of care increase this decade?
Care spending increased modestly over a decade after cost increases over the five years studied by AARP.
States and the federal government significantly expanded Medicaid support for long-term care services during the COVID-19 pandemic, according to long-term care experts not affiliated with AARP.
The public support was intended to address labor shortages in nursing homes and home care settings during the worst days of COVID-19. Other factors include minimum wage increases that have increased expenses for low-wage workers, including nursing home employees and home health aides.
While more generous Medicaid payments waned at the end of the pandemic, the Trump administration’s immigration crackdown has put pressure on nursing homes and home health agencies that rely on immigrant labor, said Mark Cohen, professor of gerontology and co-director of the LeadingAge LTSS Center at the University of Massachusetts, Boston.
“The people who care for our most vulnerable citizens are being taken out of the system,” Cohen said.
Cohen said the rising costs of nursing homes and home health aides often fall disproportionately on those who pay for their own care. This is because Medicaid often reimburses care at lower rates, and providers seek to compensate for lower public payments by shifting costs onto consumers who pay their own way.
Cohen said this puts a financial strain on middle-class families. Some states, such as California, are studying how to help families who earn too much to qualify for Medicaid but not enough to afford living expenses and the rising costs of long-term care.
“If they needed long-term care, they would be in the bay without a paddle,” Cohen said. “The pressure on the family support system is increasing.”
Families reach ‘breaking point’
AARP said the average annual cost of care ranges from $26,000 for adult day services to more than $127,000 for private nursing homes.
These costs can be difficult to manage for older adults who live on an average Social Security benefit of $23,700 per year and a median annual household income of nearly $60,000.
The report also shows that the cost of services varies widely by state. Home health aide services range from $34,320 in Louisiana to $68,640 in South Dakota.
The report also measures affordability by taking into account the cost of a service and average household income. By that measure, home health aides are most affordable in Maryland and least affordable in Maine.
Weil said the report is intended to show that home long-term care services have become much less affordable as costs rise.
He called it a “breaking point” for families and caregivers.
“That’s really the crisis that this report highlights,” Weil said. “And I think we have to be honest that part of the breaking point is that people will be without services.”
This article originally appeared on USA TODAY: Home care crisis: How rising costs are tearing apart the middle class
Reporting by Ken Altker, USA TODAY/USA TODAY
USA TODAY Network via Reuters Connect