The Future of Caregiving

The need for care, our ability to pay, and why Family Caregiving is the path forward.

Greg Moore
Apr 28, 2018 · 8 min read

This is the fourth post in a series about Family Caregivers. Start with my first post 👉 Helping Family Caregivers

I find myself thinking about what caregiving will look like in the next few decades quite regularly. Specifically, I’m curious what the demand will be and how we’ll make sure we’re able to provide the level of care that is required. When trying to picture what care will look like I usually ponder three main questions; how long will we live? How much money will we have? and how will we pay for care? These three questions are by no means the only questions I should be asking myself but they’re always at the forefront of my mind.

How long will we live?

The age we expect to live to is a huge consideration when trying to determine how to plan for and afford care. However, it’s rarely discussed as life expectancy feels like something that’s hard to anticipate. While I definitely don’t have any super natural means of knowing how long somebody will live I do believe that we can rely on data to help inform how we think about this topic.

According to the Social Security Administration a man reaching age 65 today can expect to live, on average, until age 84.3. A woman turning age 65 today can expect to live, on average, until age 86.6. And those are just averages and about one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95. [1]

It’s clear we’re living long lives which is very exciting! However, considering that one out of every four 65-year-olds today will live past age 90, I’m curious what our healthcare system will look like once we hit that level of demand for care.

How much money will we have?

Closely related to life expectancy is the average age of retirement. Retirement age helps us understand how much money we’ll have entering the period of life that most commonly requires a form of care. In the United States the average retirement age is currently 63 years of age. [2] Following the life expectancy assumptions mentioned above, a woman retiring today will live a little over 20 years after she stops working. As covered in my previous post on why Family Caregivers exist, the average retirement savings is $170,000 in the US today. While being admittedly simplistic, with 20 years to live and $170,000 saved, that offers approximately $8,500 a year to spend.

With the high costs of care in mind, less than ten thousand dollars annually is unfortunately not a viable option when it comes to affording care. Lack of funds has traditionally forced most families to rely entirely on federal programs for care or unregulated sources of caregivers such as Craigslist.

How will we pay for care?

There are four main payment methods today…

Option #1: Pay Out of Pocket

The care recipient pays for their care individually. This is commonly referred to as “Private Duty” or “Private Pay”. Roughly 75% of the home care industry is private duty. Paying for care out of pocket is surprisingly common for basic forms of care, however, is increasingly rare as care becomes more complex which brings higher costs.

Option #2: Long Term Care Insurance.

The Motley Fool has a great primer on Long Term Care Insurance…

Most health insurance covers things like hospital stays, medical procedures, doctors’ office visits, and prescription drugs. However, the cost of long-term services such as nursing home stays is generally not covered. Even Medicare will only cover short stays in nursing homes, or some in-home care, but only under specific conditions.

Long-term care insurance is designed to cover these types of expenses. In addition to nursing home stays, long-term care insurance can cover things like a home health aide to assist with bathing, dressing, or eating.

The average annual premium for a 60-year-old couple is $3,490 for a plan with an initial benefit of $150 per day for up to three years and a 90-day elimination period. [3] In the U.S. only approximately 8.5 million people are covered by Long Term Care Insurance. Unfortunately, the high cost of long term care insurance puts it out of reach for the vast majority of folks.

Option #3: Medicare

Medicare is a government health insurance program administered by the Centers for Medicare & Medicaid Services (CMS). There are a number of things you need to qualify, the most common being 65 years of age or older. Medicare does not cover nursing home care, the costs of assisted living facilities and adult day care. Medicare does, however, help pay up to 100 days of skilled nursing or rehabilitation care immediately following a three-day inpatient hospital stay. [4]

Option #3: Medicaid

Medicaid is a public health-insurance program largely for low-income people, although some middle-class disabled and elderly people also qualify. States and the federal government share the cost. The qualifications and coverage differ on a state by state basis. Many long term care services are covered by Medicare, however, not all service providers accept Medicaid. [5]

It’s clear that none of our options are perfect. Paying for care out of pocket or purchasing long term care insurance are the best options but they only make sense for the wealthy. Medicare is the easiest government program to qualify for but it doesn’t cover long term care. Medicaid does cover some long term care services but the qualification requirements are extremely specific and not all providers accept the program. Sadly, the effort required to navigate payment and qualification options are so cumbersome that some families never figure it out and go without the care they need.

It’s easy to feel a bit hopeless with all of this in mind. It can feel like we’re doomed to live long lives that will end with us not being able to afford nor easily qualify for the care we need to see through our golden years in comfort. If that’s the case, what else can we do if the system (or our bank accounts) are unable to support us? Getting the necessary care from non-traditional sources is one option.

The Tech Disruptors

Technology companies have worked hard to “disrupt” the long term care industry over the past decade. Home care has received particular attention. Caregiver marketplaces such as Honor, HomeTeam, and Carelinx have popped up to provide on-demand caregiving services. Most were dubbed the “Uber for homecare” at one point. Similarly, Craigslist has become an extremely common source of caregivers.

The new tech companies are a highly debated topic within the traditional long term care industry because the marketplace concept has been tried by the legacy companies and abandoned. There are a myriad of reasons why it was unsuccessful in the past but the reason most cite is quality of care.

Regardless of care quality, price is the largest concern with the new online marketplaces. The online caregiver marketplaces charge well north of $25 per hour for care. The national average is between $15 and $20. Unfortunately, the cost of tech enabled care can easily surpass what the majority of the country is able to afford.

Note: Costs vary based on the marketplace. The cost data I reference within this post was gleaned from a survey program I conducted in the last six months.

So for those keeping score, we’re still without a universally viable option for getting the care we need in an affordable and convenient manner. Thankfully, there is one final option and it’s more common than most would think… you can become the caregiver.

An estimated 65 million people have adopted the role of caregiver in the US today. Close to 20% of the US population is caring for a sick, elderly or disabled loved one and these people are called Family Caregivers.

Why Family Caregivers make sense…

  • The care is “free”. Admittedly, there’s way more complexity to this but the care is free or at the very least extremely inexpensive as a professional is not hired.
  • The care quality is extremely high. It’s unheard of that a professional nurse, doctor or caregiver would dedicate their career to one care recipient. Family Caregivers can do that and that provides them a far better view into the care recipient’s health thus increasing the quality of care.
  • It’s a long term solution. A Family Caregiver can learn new skills as care needs evolve. It’s common for care recipients to outgrow their existing care provider. To the point that a Family Caregiver is able to learn new care techniques, the care recipient will receive care from the same person until they pass away.

Why Family Caregivers don’t make sense…

Adopting the role of caregiver does solve most to all of the problems we’ve discussed. It’s extremely low cost. The quality of care is very high and it’s a long term solution as caregiving skills can easily evolve as care needs increase.

I believe Family Caregivers are the unrecognized foundation of our medical system and will only grow in prominence over the next decade. I’d bet that the prevalence of Family Caregivers will always keep pace with the costs of care and unfortunately we’re in no danger of healthcare becoming significantly cheaper any time soon.

One of the biggest advantages of adopting the role of caregiver is allowing the care recipient to age in their own home. It’s estimated that north of 90% of the elderly want to age in place. [6]

While there are many advantages to becoming a Family Caregiver there are just as many disadvantages. I would argue that the disadvantages far out weigh the advantages currently. Becoming a Family Caregiver is in many ways a life changing decision. It leaves most in a very dangerous predicament because there are so few resources available to help them survive the caregiving journey.

Support and education are the two biggest themes within the family caregiving community. Each theme has a specific set of needs that are unmet today. Unfortunately, Family Caregiver’s largely struggle in silence today. Most lose contact with friends and other family members because of the time commitment caregiving requires. Similarly, most Family Caregiver’s are forced to make up solutions to caregiving problems day by day. There are very few affordable or free sources of education for caregivers which is extremely surprising as most do not have a medical background.

Unfortunately, Family Caregivers often find themselves having to trade their personal life, mental and physical health, and career aspirations in order to provide care to their loved one. While it does solve the monetary issues it often leaves those that take on the role of caregiver in an extremely fragile personal state that leaves them at serious mental health risk.

Time to help

I think many of the issues plaguing Family Caregivers can be solved. In fact, I am dedicated to solving them. Becoming a Family Caregiver makes sense on so many levels and the fact that taking on the role leaves those that do worse off than before is unacceptable. I believe those that step up to care for their loved ones are modern day superheroes and we need to help them.

In my next and final blog post I’ll be sharing how I intend to solve this problem. Stay tuned and thank you for reading!

P.S. I have a podcast where I interview Family Caregivers. Listen here ->

Greg Moore

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I love to make new things ✌