An Alarming Study From The Consumer Bankruptcy Project Reveals The Facts
The number of older Americans showing up in bankruptcy court is growing. The rate of seniors age 65 and older filing for bankruptcy has tripled since 1991. That statistic comes out of a new study from the Consumer Bankruptcy Project, a research collaboration funded by several universities. Deborah Thorne of the University of Idaho is the study's lead author.
The study reports that between February 2013 and November 2016, there were 3.6 bankruptcy filers per 1,000 people 65 to 74, compared to 1.2 in 1991. At the same time, 12.2 percent of filers are now 65 or older, up from 2.1 percent in 1991. The significant rise seems to be driven by a 30-year shift of financial risk from government and employers to individuals. The effects of this change include longer waits for full Social Security benefits, the replacement of employer-provided pensions with 401(k) savings plans, and increasing out-of-pocket healthcare expenses. The problem is worsened by the shrinking incomes of many seniors all across the country.
The financial squeeze on older Americans has just gotten tighter and tighter and tighter as we have weakened the social safety net that they can depend on. And here's the pickle for them, is that they're older, so they cannot recover. They cannot go back to work at 65 and 70 years old and recover the money that they've lost. - Deborah Thorne of the Consumer Bankruptcy Project
The study also found the next generation nearing retirement age is filing for bankruptcy in greater numbers as well, and the average age of filers is climbing. As the study states, "When the costs of aging are off-loaded onto a population that simply does not have access to adequate resources, something has to give, and older Americans turn to what little is left of the social safety net — bankruptcy court"
The signs of potential trouble — vanishing pensions, soaring medical expenses, inadequate savings — have been building for years. Driving the surge, the study suggests, is a three-decade shift of financial risk from government and employers to individuals, who are bearing an ever-greater responsibility for their own financial well-being as the social safety net shrinks.
When Seniors Face Financial Stress Where Do They Turn?
By the early twentieth century the financial risks to growing older in America was diminishing. Americans began to view the welfare of the elderly as a collective responsibility and policy was enacted to reflect that view. However by the mid-1980s that began to change. In just a few decades, privatized citizenship and individual responsibility began to replace the concept of an American social welfare system overseen by the government. With the “privatization of retirement responsibility,” seniors’ Social Security, retirement, and healthcare protections began to come under attack. With longer waits for full Social Security benefits, the replacement of employer-provided pensions with volatile 401(k) savings plans and more out-of-pocket spending on health care the financial predicament for so many seniors has gotten worse. Declining incomes leading up to retirement have compounded the problem. With inadequate income, insecure and failing private retirement plans and unmanageable costs of healthcare many seniors have little choice but to declare bankruptcy.
The Solution To The Growing Problem Of Senior Bankruptcy
For most older Americans, bankruptcy as a solution is too little too late. Although free from the strain of debt, their past wealth has vanished and at an advanced age there may not be enough years to get back on their feet. So how must we as a nation address the problem?
At the conclusion of the Consumer Bankruptcy Project study the authors come to this conclusion: “At the core, the lessons of prior decades show that aid to older citizens must originate with our government. Community and charitable organizations, while having the best of intentions, are inadequate. Comprehensive policies led by our government will ensure financial stability for all elderly citizens. We appear to be in the midst of an old-fashioned game of tug-of-war. On the one hand, many Americans believe that providing a strong social safety net for our older citizens, a net that reduces their individual financial risks, is part of our collective responsibility. On the other hand, there are those who insist on policies that continue to unravel that safety net, leaving older Americans to fend for themselves.”
Says Deborah Thorne “We would hope that policymakers would decide to make this a priority and provide some security, financial security through more affordable medical care and more security in how older people manage their retirement accounts. And we hope the policymakers will step up and shift policy so that there's more protection for older Americans.”
To view the report “Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society”, visit the Social Science Research Network (“SSRN”) website.
The enormous cost of caring for patients with Alzheimer’s disease
The cost of caring for those with Alzheimer’s disease and other forms of dementia is expected increase $20 billion this year compared with last year, totaling more than $277 billion in 2018, according to a report released by the Alzheimer's Association.
The report, “2018 Alzheimer’s Disease Facts and Figures” showed that of the $277 billion cost, $186 billion will be paid by Medicare and Medicaid, , $60 billion will be out-of-pocket costs and $30 billion will be related to other costs.
What is perhaps even more startling is that this enormous cost of caring for patients with Alzheimer’s disease does not include the cost associated with Unpaid Caregiving. The topic of Unpaid Caregiving is one much discussed here on Senior Home Search.
Healthcare, long-term care and hospice care for people with Alzheimer's and other dementias are projected to increase to more than $1.1 trillion in 2050 - Alzheimer’s Association
In a sobering statement, Keith Fargo, Ph.D., director of scientific programs and outreach for the Alzheimer's Association said “Soaring prevalence, rising mortality rates and lack of an effective treatment all lead to enormous costs to society,” and relating to the effect on all of us he revealed “Alzheimer's is a burden that's only going to get worse.”
What can be done to reduce the tremendous cost of Alzheimer’s care?
Early diagnosis of Alzheimer's during the mild cognitive impairment stage of the disease could save the country as much as $7.9 trillion in healthcare and long-term care expenses, according to an accompanying special report titled “Alzheimer's Disease: Financial and Personal Benefits of Early Diagnosis,” which highlights new economic modeling data.
“The disease is better managed, there are fewer complications from other chronic conditions and unnecessary hospitalizations are avoided,” Fargo said. “The sooner the diagnosis occurs, the sooner these costs can be managed and savings can begin.”
Earlier diagnosis could save individuals approximately $64,000 each, but costs still would average $360,000 per person, according to projections.
Also in the reports:
- Deaths from Alzheimer's disease increased by 123% between 2000 and 2015. By contrast, the number of deaths from heart disease, the top cause of death in the United States, decreased 11% during that time.
- An estimated 5.7 million Americans of all ages have Alzheimer's dementia now, and 5.5 million of this total are people who are at least 65 years old.
- The number of people aged 65 or more years with Alzheimer's is estimated to increase by almost 29% to 7.1 million by 2025. The number of people aged 65 or more years who have Alzheimer's may almost triple to 13.8 million by 2050, barring the development of medical breakthroughs.
How Should We Address The Rising Cost Of Alzheimer’s And Dementia ?
Around the time of the release of this startling information about the rising cost of Alzheimer’s care, a group of 14 senators led by Sen. Susan Collins (R-ME), founder and co-chair of the Senate Alzheimer's Task Force, and Sen. Amy Klobuchar (D-MN) have asked President Trump to boost funding allocated for Alzheimer's research in the fiscal year 2019.
The Law Will Require Development Of A Strategy To Recognize And Support Family Caregivers
In January, Congress passed and President Donald Trump signed the RAISE Family Caregivers Act. The law creates a strategy to support millions of people who help loved ones remain in their homes.
Here is what the new law will require.
- Require HHS to develop, maintain and update a National Family Caregiving Strategy, offering resources and education opportunities to family caregivers in the United States;
- Require HHS to convene a Family Caregiving Advisory Council to advise it on recognizing and support family caregivers;
- Promote greater adoption of person and family centered care in all health and long-term services and supports settings; and
- Ensure older adults with disabilities and illnesses receive high quality care in their homes.
Senators Susan Collins (R-Maine) and Tammy Baldwin (D-Wis.) and Representatives Greg Harper (R-Miss.) and Kathy Castor (D-Fla.) spearheaded the legislation.
The bill as it moved through congress was also backed by AARP. “Family caregivers are the backbone of our care system in America,” said Nancy A. LeaMond, AARP’s chief advocacy and engagement officer. “We need to make it easier for them to coordinate care for their loved ones, get information and resources and take a break so they can rest and recharge."
These family caregivers have a big job, but some basic support — and commonsense solutions — can help make their big responsibilities a little bit easier.
We are grateful to Congress and “This is forward progress, but it should not be the end of the journey. - Charles Fuschillo, Jr., President and CEO of the Alzheimer's Foundation of America
Across America, family caregivers help parents, spouses, children and adults with disabilities and other loved ones to live independently. They prepare meals, handle finances, manage medications, drive to doctors’ appointments, help with bathing and dressing, perform complex medical tasks and more — all so loved ones can live at home.
So What Will The RAISE Family Caregivers Act Really Do?
The RAISE Family Caregivers Act requires the U.S. Secretary of Health and Human Services (HHS) to develop, maintain and update an integrated national strategy to support family caregivers. According to the Act, HHS will create a national family caregiver strategy by bringing together federal agencies and representatives from the private and public sectors (like family caregivers, health care providers, employers and state and local officials) in public advisory council meetings designed to make recommendations. The agency will have 18 months to develop its initial strategy and then must provide annual updates.
So we can say that the aim of this new law is certainly needed, well intentioned and could be of great help to the 40 million family caregivers with an elder or disabled loved one at home. What could be wrong with that?
What We See Is Wrong With The RAISE Act
Funding, simply put. Implementing any national strategy will create a large cost that our polarized Congress is unlikely to fund. The RAISE Act is supposed to help family caregivers keep working outside the home. The question is: Who is going to pay for the replacement caregiver when the family caregiver goes back to work? Respite options are to be included as part of the Act. That means that the family caregiver gets time off to rest. And what happens to the elder or disabled person when the family caregiver is getting that break? Someone has to pay for the actual cost of placing the care recipient in a facility temporarily or paying someone by the hour to care for them temporarily. We have no such national programs now. Strategizing about programs is not the same as paying for programs.
Age Related Illness and Disease
Alzheimer’s disease and Dementia are affecting seniors in growing numbers. The result is literally millions of people become family caregivers and are quitting their jobs to care for their loved ones part time or full time. Passing a law requiring an integrated strategy is fine, however funding research to find a cure for the sixth leading cause of death in the U.S., Alzheimer’s disease, is hugely important. Caregiving for a loved one with Alzheimer's can last 20 years.
The RAISE Act is an important step toward more fully recognizing the impending crisis in caregiving as the aging population continues to grow. As improved guidelines and policies develop from the legislation, funding will be required to relieve the 2015 AARP estimate of $470 billion in unpaid care and the 2016 AARP estimate of $7,000 in out-of-pocket expenses provided annually by family caregivers. - Kathleen Kelly, Executive Director - Family Caregiver Alliance
We have not seen as part of this new law, any mechanism for Funding caregiver relief, disease research, housing assistance for seniors or any other important caregiver related need. Referring this lack of funding, Charles Fuschillo, Jr., President and CEO of the Alzheimer's Foundation of America is quoted in a press release from GlobeNewswire: “We are grateful to Congress and “This is forward progress, but it should not be the end of the journey.”...This encouraging development is only the tip of the iceberg. A dire need remains for the federal government to pass a Fiscal Year (FY) 2018 budget which includes $2 billion—up from the current amount of $1.4 billion—for Alzheimer’s disease research at the NIH." (National Institutes of Health).
Caregiver Training, Medical Assistance And Financial Relief
According to AARP, family caregivers “commonly experience emotional strain and mental health problems, especially depression, and have poorer physical health than non-caregivers.” And they rarely receive training in providing care.
And 78% of them incur out-of-pocket costs due to caregiving, spending $6,954 a year, on average, according to AARP. That’s estimate of $470 billion in unpaid care each year. Recognizing and strategizing about this with a new law is not the same as funding a solution.
What Concerns Me Is What’s Missing In This Law
To be effective and not just a list Advisory Councils, Strategies, and Unfunded Departments, I see several main things that could be put in place rather quickly and which would provide much needed help for families faced with a senior caregiving situation. Consider the following:
- Allow family caregivers an amount stipulated on their tax return that funds their lost wages in regards to social security. In other words fill those gap years in their ss earnings with a stipend so they do not lose benefits they will need when they themselves retire.
- Congress needs to pass a law allowing Medicaid funds to be used to pay for Adult Foster Care Homes and not just nursing homes. These homes cost on average ½ of the cost of a nursing home, which is the only option open to those whose funds have run out. The care in these homes as good and many times proven to be better than traditional nursing homes. The smaller environment can be a great benefit to patients with forms of dementia and Alzheimer’s disease and the staff to patient ratio usually much better. Just ask, me I am a huge advocate for these homes.
- Allow family caregivers who leave work to care for a loved one to draw a caregiver wage from the government if they meet certain income requirements. If a person cannot financially leave a job to care for someone, that person ends up in a nursing home and that cost the government and the economy on average 8-10,000 per month per resident! Again you could pay a family caregiver a fraction of that, save money and the patient gets better care! It’s a win win solution.
For the first time in history those 65 and over are expected to exceed the number of children in U.S.
By the year 2035, Americans age 65 and older are forecast to outnumber kids for the first time. The U.S. Census Bureau has projected that the population of older adults will surpass children by almost two million in 2035, after increasing almost five million to 78 million. The growth rate of the population of children, those under age 18, is projected to be much slower.
The U.S. will join other countries with large aging populations - Jonathan Vespa, U.S. Census Bureau
This change in demographics is now developing in the U.S., however the trend in other countries, notably Japan and some nations in Europe, is already well underway.
Some countries in Western Europe have populations that are older than in the U.S., especially in Germany, Italy, France and Spain. Countries in Eastern Europe are even further along and, within a few years, many of their populations are projected to begin shrinking.
Why Is This Age Shifting Happening
In the past higher fertility rates and significant international migration have helped stave off an aging population and the country has remained younger as a result. But this appears to be changing. Americans are having fewer children and the baby boom of the 1950s and 1960s has not yet been repeated. Fewer babies, plus longer life expectancy, equals a United States that is aging faster.
The driving force behind America’s aging is the baby boomers - They swelled the ranks of the young when they were born and then the workforce as they entered adulthood.
Now, the Baby Boomer generation will expand the number of older adults as they age. Starting in 2030, when all boomers will be older than 65, older Americans will make up 21 percent of the population, up from 15 percent today.
By 2060, nearly one in four Americans will be 65 years and older, the number of 85-plus will triple, and the country will add a half million centenarians (over 100 years old).
The Results Of The Senior Shift
With this swelling of the number of older adults, the U.S. could see greater demands for healthcare, in-home caregiving and assisted living facilities, nursing homes and other senior living options such as Adult Foster Care homes and Board and Care homes. It could also affect Social Security. It is projected that there will be three-and-a-half working-age adults for every older person eligible for Social Security in 2020. By 2060, that number is expected to fall to two-and-a-half working-age adults for every older person.
By 2030, it is projected that more than 60% of this generation will be managing more than 1 chronic condition. Managing these chronic conditions, along with a patient’s level of disability, will increase the financial demands on our health care system. The cost of health care may increase with the number of chronic conditions being treated, taking into account the expected twice as many hospital admissions and physician visits for Baby Boomers by 2030. There are certain health conditions that are expected to be a challenge to our health care system with the increasing aging population. These conditions include cancer, dementia, increase in the number of falls, obesity, and diabetes.
Another result of the Senior Shift will be a historic increase in the number of deaths every year.
Deaths are projected to reach more than 3.6 million in 2037, 1 million more than in 2015. As the nation’s baby boomers age, the number and percentage of people who die will increase dramatically every year, peaking in 2055 before leveling off gradually.
Other results of an aging America will present challenges to labor markets, government tax collections, government spending and the wider economy.
And as this trend of increased percentages of older Americans continues, the U.S. is fast heading towards a demographic first. It will become grayer than ever before as older adults outnumber kids.
See The Census Bereau Story HERE
More and more of us are living longer, and we need a Long-Term care solution more than ever.
"About half of all senior citizens will need to spend about $138,000 for personal care over two years"
Yet, for one in seven, five years of care becomes necessary, and the cost "is far beyond the ability to pay.” This according to Howard Gleckman of the Urban Institute. And that five-year cost can exceed $250,000.
Now a nonpartisan group, the Long-Term Care Financing Collaborative, has called for a push for a new national universal policy for just that – Long Term Care for Seniors. The Urban Institute is a part of that Collaborative.
With a goal of getting employers to automatically enroll their employees in long-term care insurance policies at work, with employees paying regularly toward insurance from each paycheck, businesses would get insurance companies to offer long-term care insurance again after fleeing the market during the last few years, and getting people to enroll in more affordable insurance than has been offered previously.
Many Americans do not realize that Medicare and other health insurance plans will not cover long term care such as bathing, dressing and other help seniors often end up needing as they become frail or suffer debilitating diseases like Alzheimer's later in life. Referred to as ADL’s or "Activities of Daily Living", this is care that seniors and their families can be left with, often becoming a crushing financial burden.
The group emphasized that family responsibility will continue, but the collaborative wishes to lessen the burden. The Urban Institute has estimated that services delivered by family members total about $470 million each year.
"A woman in her 50s who leaves a job to care for aging parents loses an average of $300,000 in lifetime income," the collaborative reported. "Unpaid family caregivers lose an estimated $3 trillion in lost lifetime wages and benefits," while employers suffer $17 billion to $33 billion in lost productivity and absenteeism.
According to the group's research, about half of all senior citizens will need to spend about $138,000 for personal care over two years. Yet, for one in seven, five years of care becomes necessary, and the cost "is far beyond the ability to pay," said Howard Gleckman of the Urban Institute. The five-year cost can exceed $250,000.
What about Medicaid and Long-Term Care?
It’s true, regular health insurance doesn’t cover Long-Term care, and neither does Medicare. The Medicare program covers only short nursing home stays or limited amounts of home health care when a senior requires skilled nursing or rehab. It does not pay for custodial care, which includes supervision and help with day-to-day tasks. So will Medicaid fill that gap? Not necessarily. You can get help through Medicaid, the federal and state health insurance program for low-income people, but only after you’ve exhausted most of your savings, depleting a retirement nest egg quickly. The median cost of care in a semiprivate nursing home room now tops $80,000 a year, according to Genworth’s 2015 Cost of Care Survey.
And if you have to rely on Medicaid, your choices will be limited to the nursing homes that accept payments from the government program. Medicaid does not pay for assisted living in many states.
And so it is easy to understand why groups such as the The Long-Term Care Financing Collaborative see such an urgent need to address this growing problem, a lack of adequate and affordable Long-Term Care insurance. What is seen as a failure of policy makers to reach agreement on viable solutions has pushed the issue to the forefront.
Today, 10-12 million adults require supports that help them maintain the best possible quality of life, supports and services such as non-medical assistance and help with food preparation, personal hygiene, assistive devices, transportation, as well as help with activities such as bathing and eating. And the number is expected to double by 2030.
What is the Long-Term Care Financing Collaborative?
The Collaborative brings together national experts and stakeholders who cross ideological divides in pursuit of a common goal: to improve the way Americans pay and prepare for the non-medical care needed by our frail elders and people living with disabilities to live with dignity and autonomy through consensus-based, concrete policy recommendations. – Convergencepolicy.org
For more about the groups efforts, and a list of the groups participants, you can follow this link to the Long-Term Care Financing Collaborative.
Long-Term Care for Seniors is a need that is growing fast. It's good news to see this kind of effort toward finding a long term solution.