Good News – Longevity. Bad News – We are Not Prepared
If you are over 40 years old, nobody has to tell you that you are getting older. You feel it, and you see it. There are biological, social, and psychological changes that come with aging. The advances in medical science have become one of the crowning achievements we have seen in the past fifty years. The produced longevity presents significant challenges to families and their finances and as a society.
The National Institute of Aging reports that societal aging can affect economic growth. Aging will also change our work and retirement patterns. However, it is much more than just economics, work, and retirement.
The financial costs and burdens that come with an aging society will have an adverse impact on how our family’s function. It will affect governments and communities' ability to provide adequate resources for older adults with little or no resources. Interestingly enough, advances in medical science and the growth of longevity will increase the prevalence of chronic disease and disability.
Marcia G. Ory, Ph.D., MPH, is a Regents and Distinguished Professor in the Department of Environmental and Occupational Health at Texas A&M University. She writes in The Conversation that there are several reasons why people are living longer.
"It's certainly a little bit of our genes. We used to think that was the biggest factor, but that's not the biggest factor at all. It's about how we live, meaning our health behaviors. It's having a good diet. It's being physically active. These are the kinds of behaviors that will make a difference.
But the third leg of that is really where we live. We're now understanding that there are a lot of social determinants of health. Even your ZIP code, where you live, can be as powerful a predictor of mortality and morbidity as something that we think of traditionally, like smoking or obesity."
More Older People Due to Longevity and Fewer Children Being Born
Between 1950 and 1980, people aged 65 and older more than doubled, from 12.3 million in 1950 to 25.5 million in 1980. For those aged 85 and over, there was a 281 percent increase from 577,000 in 1950 to 2.2 million in 1980.
In 2019, about 16.5 percent of the American population was 65 years old or over. The number should reach 22 percent of the total population by the year 2050. Compare that to 1950, when only eight percent of the population was age 65 or over.
According to the U.S. census, between 2020 and 2060, the number of older adults will increase by 69 percent, from 56.0 million to 94.7 million. Now, the oldest of the old is expected to triple. While this group is smaller in size, it is rapidly growing. The number of people ages 85 and older should nearly triple from 6.7 million in 2020 to 19.0 million by 2060.
The total number of people who are age 65 and older in the U.S. has grown steadily during the past century and growth. The significant acceleration started in 2011, the year the baby boomers first started to turn age 65.
Women at the Center of Aging but Gap is Shifting
The vast majority of the oldest-old are women. Because of women's longevity, women face more health problems and the related social and economic problems of the oldest of the old.
Women do live longer compared to the average man, but in the United States, the gender gap among older adults has started to shift, especially compared to the rest of the world. Men in the United States smoking less and generally take better care of themselves than in past generations.
Still, women outlive men. The 2016 U.S. census shows more older females (27.5 million) than older males (21.8 million). The variation in numbers between the sexes increases with age. Of the 28.7 million aged 65 to 74, 15.3 million were female, while 13.4 million were male. There are about 2 million more females (8.1 million) than males (6.2 million) among the 75 to 84 age group. Nearly twice as many females (4.1 million) as males (2.2 million) were 85 and older.
Sex Ratio by Age
Men First to Need Long-Term Health Care -Women – First Caregivers
Men typically need long-term health care before women. Older females, usually the spouse, tend to become the default caregiver depending on the man's needs and the woman's overall health. However, it doesn't take long for the spouse to need help with caregiving. Without advance planning, a daughter or daughter-in-law usually steps in to help provide care.
Melissa Favreault from the Urban Institute and Judith Dey of the Department of Health and Human Services report that about half of all Americans will need a high level of long-term care services and supports at some time before they die.
What this means is the chance that you will need comprehensive paid long-term health care services when you get older are a flip of a coin - 50/50.
However, your gender matters when it comes to the potential risk of needing long-term health care during your lifetime. If you are female, the odds are about six in ten.
The study says a typical man will need a high level of help with daily living activities for about 1.5 years; a woman, however, will need care for 2.5 years. And while about 10 percent of men will require high levels of personal care for five years or more, almost twice as many women will need care for that long.
Caregiving is Tough – Physically and Mentally
The caregiver's role is physically and emotionally demanding, no matter who the default caregiver happens to be. Professional caregivers are often sought if the resources are available to help the family caregivers.
Health insurance, including Medicare and supplements, will not pay for long-term health care outside of a short period of skilled care. While Long-Term Care Insurance will pay for these extended care services, you can only obtain coverage before your health changes, and you get too older. It is impossible to purchase coverage once you need long-term care.
Paid care services, whether it be in-home care or some type of facility like assisted living, memory care, or nursing home, are expensive, and those costs continue to increase yearly.
The LTC NEWS Cost of Care Calculator shows the costs vary depending on location and type of service. Typically, the cost of care increases with labor costs; however, changing demographics and higher demand for services from an ever-growing elderly population may accelerate these costs, according to experts.
Dependency is Placed on Smaller Families
Not only are people living longer, but families have fewer children. More women have careers and maintain both a career and the role of spouse and mother. These trends are changing the shape of elderly dependency.
Older people are becoming dependent on others, primarily their families, especially when they have no other choice other than Medicaid. Medicaid, the medical welfare program, was never intended to pay for long-term health care. However, Medicaid has become the primary payer of long-term health care in the U.S.
To qualify for Medicaid, you must have little or no assets and income. Since Medicaid’s reimbursement is low, the quality of caregiver is sometimes suspect. When the choice is Medicaid or family caregivers, the family will attempt to maintain that role despite the stress and anxiety it creates.
Those with assets but without Long-Term Care Insurance will attempt to self-fund the costly care, but only after the family attempts to provide care for a parent. Often, adult children decide they are unable to handle the role physically, emotionally, and financially.
Adult children will start making decisions on paid care services and which accounts to liquidate first to pay for these services. In some families, the choices of care are driven by financial concerns in preserving future inheritance instead of quality and choice of care.
People who own Long-Term Care Insurance have tax-free resources to pay for their choice of care in the setting they deserve. The insurance helps reduce the dependence on family members and ensures quality care choices, including in-home care. At the same time, it protects income, assets, lifestyle, and legacy.
Morbidity and Mortality
With more people living longer than ever before the result will mean more people needing help with daily living activities and increased cognitive decline. With a higher percentage of people living with chronic disease, the needs for long-term care services in later life are likely to increase substantially. These costs will strain the budgets of both American families and federal and state government budgets.
Dr. Ory says that if there is a bigger focus on chronic disease prevention and management, it could affect the lifestyles and the living conditions of people could be reaching older age at a healthier stage, and "compressing their morbidity."
With more awareness of aging, planning for the costs and burdens of aging will reduce the burdens on loved ones, safeguard assets, and offer a better lifestyle as people get into their golden years.'
Long-Term Care Insurance is a Big Part of the Solution
Part of this planning should include affordable Long-Term Care Insurance. In forty-five states, Partnership Long-Term Care Insurance offers dollar-for-dollar asset protection - one of the biggest secrets in retirement planning.
Most policies offer case management to help families find appropriate care. Many LTC Insurance plans also provide additional resources for equipment and home modifications to help people stay in their homes longer.
Perhaps for many families are not the financial resources that come with a Long-Term Care policy. The benefit of planning is time. Your family will have time to be family. They will be better able to maintain their careers and other family responsibilities and spend more quality time with the care recipient, typically a Mom or Dad.
When preparing for longevity, think about affordability and health. LTC Insurance is medically underwritten, so you must purchase a plan before your health changes dramatically.
Several Factors Determine Premium
Premiums are based, in part, on your age when you obtain coverage. In addition to the total amount of benefits you wish to have in the policy, other factors go into the policy's cost. Most companies consider some family history as part of the underwriting process.
Experts suggest obtaining coverage, even if it is a small plan, in your 40s or 50s. Seek the help of a Long-Term Care Insurance specialist to guide you through the many choices available today. Plus, premiums can vary over 100% for the same coverage. Combination life/long-term care also exists, as does short-duration plans.
In addition to insurance, there are other considerations to keep a person independent when you get older or suffer health or disability. Once you get to age 50, you should review your home and possible downsizing, especially if the home is not age and disability friendly.
Denial is the Biggest Obstacle
An Associated Press – NORC Center for Public Affairs Research poll reported that most Americans today think that they can count on their family members to help care for them in the future. However, most (60%) have never discussed this with their family. In fact, 30 percent of Americans indicated they would rather not even think about getting older at all.
These numbers reflect denial. High percentages were unaware of how costly long-term health care is today or in the future. Many thought health insurance or Medicare paid for these services.
While the COVID-19 crisis might have shined a brighter light on this issue, the reality is too many people fail to understand or even agree that there is a problem. If there is no problem, there is no need for a solution.
There are solutions - affordable solutions that are available for many American families. However, you must understand the reality of the problem and take action early enough to address the problem.
You Will Get Care – But at What Price and at What Burden?
You will get care when you need it. It might not be the care you want; it might be more costly than you think. Planning will take this burden off your family and finances, and everyone will enjoy peace-of-mind knowing you will avoid a crisis when the time comes.
Don't ignore the consequences of your changing health, body, and mind. Aging does happen. Preparing will make it easier on you and your loved ones.