COVID-19 Shines Spotlight on Long-Term Care
The death toll that COVID-19 has exacted on long-term care facilities lays bare the need for new solutions to provide care to aging retirees.
By Neil Lloyd, Head of US Defined Contribution and Financial Wellness Research, Mercer
The COVID-19 pandemic has impacted us all greatly, but maybe none more tragically than the families of nearly 40,000 people who died from the disease at long-term care facilities as of May 29, 2020, according to the Kaiser Family Foundation. Thirty-nine US states have reported deaths at such facilities, representing 43% of the total. While long-term care has always been a challenging post-retirement issue, it now is squarely under the spotlight.
Anna Rappaport chairs the Society of Actuaries Committee on Post-Retirement Needs and Risks and researches the challenges facing Americans in retirement. I took the opportunity to talk to her about recent work she has been doing researching COVID-19 and the long-term care crisis.
Neil Lloyd: What are some of the concerns regarding long-term care, and how has COVID-19 exposed them?
Anna Rappaport: The Society of Actuaries Committee I chair has conducted extensive research on individuals age 85 and over as well as an online conversation among a multi-disciplinary group about the implications of COVID-19 for retirement risks, and their concerns and experiences. Our report, Impact of COVID-19 on Senior Housing and Support Choices[1], provides an overview of the issues linked to housing and support.
Our research with individuals age 85[2] and over indicated that most people eventually need some assistance and family members are often the first source of aid. Although most people prefer to age at home, their need for support often increases gradually over time. They may have no choice but to consider moving to a senior community that includes activities, meals and transportation, and offers the potential for more extensive or specialized help.
The COVID-19 pandemic has uncovered systemic vulnerabilities in senior communities. With congregate dining rooms and activities, they offer the potential for rapid spread of the disease. The data on the spread in nursing homes has confirmed that indeed this has led to tragic outcomes — for residents and caregivers alike.
NL: How have these communities responded to the outbreak, and what has been the reaction of the residents and their families?
AR: Most senior housing facilities are discontinuing all community activities and dining and require residents to stay in their own rooms with meals being delivered. This can be very difficult for the residents’ well-being.
Many such communities have banned all visitors, including family members who help with the care of their loved ones. This is particularly challenging if the resident has dementia or is hard of hearing, and the family member has been serving as their advocate. While some of the residents are able to communicate independently with friends and family members using cell phones and video technology, others can do so only if they have help.
Some long-term care communities were allowing residents to leave and visit family but were requiring a two-week period of quarantine upon return. This has been very difficult for the residents, and some families have taken their family member out of the senior residence.
NL: Did unexpected financial issues surface in your research or discussions?
AR: Yes, some of this housing combines a variety of levels of support in single communities, or Continuing Care Retirement Communities (CCRCs). They have an array of financial arrangements and have traditionally allowed for prepayment of long-term care through the use of substantial entrance fees. Many people view these arrangements as offering a guarantee of long-term care, but it does not always work out that way. My essay, Are CCRCs and Senior Housing Communities a Good Choice?[3] provides insights into the risks, regulation and due diligence needed for such communities.
NL: Anna, you mentioned that providing home care for seniors also has challenges, but that the pandemic may actually make them worse. Could you explain?
AR: Older family members living at home often are able to do a lot for themselves, but not everything. As a result of the pandemic, older individuals and particularly those with compromised health are encouraged to socially distance themselves. Many who are staying home with little contact with other people now lack basic support. For example, people who were once able to go shopping on their own may now need more help.
Family members who are helping older relatives may have competing responsibilities, placing them under greater stress. Furthermore, multi-generational households need to figure out how to appropriately social-distance, which can be problematic if some of the household members work in health care or are first responders.
In addition, some people have paid homecare support. During the pandemic, that support may have been discontinued, given COVID-19-carrier concerns. Providers may have become ill, or they may need public transportation to reach the person they are helping.
NL: Any ideas about the path forward?
AR: People needing help and support as they age is not going to change. Seniors who have families who can help will try hard to avoid long-term care residences longer than they might have previously. I see the cost of such residences rising as they need to do more to be careful about infection spread.
Decisions to go to CCRCs were often lifestyle choices, with the idea that they offered a great lifestyle and the assurance of care later on. Going forward, these decisions will need to follow a more robust, less emotive, due diligence process.
I also see families starting to make different decisions about housing and location, with more people choosing multi-generational solutions. More people may consider proximity to family when choosing where to live. Finally, I think people may be more concerned today about living in highly populated center cities and will opt to live where there is more open space.
NL: Thanks, Anna.
As an industry, we design solutions aimed at helping retirees meet the challenges they face in retirement. It has becoming increasingly clear that retirement is not simply solving a complex actuarial or engineering problem, but one where there are many uncertainties and human realities that we need to consider. The pandemic has clearly revealed many of the problems, in fact tragedies, facing aging people and children with aging parents. We may not have immediate solutions to such a complex problem as long-term care, but if our goal is to help people have a successful retirement, this is an issue we need to address with some urgency.
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[1] https://www.soa.org/resources/research-reports/2020/covid-19-senior-housing/
[2] Rappaport, Anna, Retirement Experiences of People Age 85 and Over, Society of Actuaries, 2019. https://www.soa.org/globalassets/assets/files/resources/research-report/2019/retirement-experiences-people-over-85.pdf
[3] https://www.soa.org/globalassets/assets/files/resources/research-report/2020/covid-19-aging-essay-rappaport.pdf
