Long-term Care, the Double-Edged Sword for Women in 2022

Long-term Care (LTC) is a need that will affect the majority of Americans aged 65 and older. However, long-term care is not just a story that affects retirees in general – it is the story of a double-edged sword that affects women specifically.

Twelve years ago, I wrote an article about the challenges that women face with regard to long-term care. However, over the last decade there has been more focus on helping women specifically with their financial goals – so I thought it might be time to look back and see what has changed regarding the state of long-term care, and any changes that could affect women planning for and living in retirement.

The average age to begin caregiving responsibilities has gotten younger in the past decade and is now 47 years old¹, an age in which people are still working. There is a unique opportunity for financial professionals to help women who foresee the potential of being a caregiver in the future – and with advanced thought and planning, help them ease financial challenges they may face as caregivers.

Men’s involvement in caregiving is changing

Twelve years ago, Family Caregiver Alliance reported that 75% or more of caregivers were women, and women continue to be the majority of non-paid caregivers – primarily to spouses and parents. Today, men are more involved with caregiving and now comprise 39% of caregivers¹. However, men are more likely to help with tasks such as paying bills and taking their loved ones to the doctor, while women caregivers are still more likely to be faced with providing the more difficult tasks such as personal care. It is interesting to note that men are more likely to be a caregiver if younger. Men between ages 18 to 49 comprise 42% of adult caregivers, while men between ages 50 to 64 only comprise 35% of caregivers¹.

A generational shift in caregivers

• Every five years, AARP publishes a study on caregiving and caregivers, and the following shows the change in generational caregivers between 2015 and 20201.
• Generation Z (born 1997 or after) has entered the role of caregiver for the first time, representing the smallest percentage at just 6%.
• Millennials (born 1981 to 1996) are 23% of the caregivers and should continue to trend up.
• Generation X (born 1965 to 1980) will continue to increase in the number of caregivers, now at 29%, as their Baby Boomer parents are beginning to need care.
• Baby Boomers (born 1946 to 1964) continue to represent the highest percentage of caregivers (34%), but their percentage as caregivers is decreasing as this population transitions to being the cared for.
• The Silent and Great Generations combined (born 1945 or before) are aging out of their role as caregivers at just 7%. This group, due to age, primarily represents the cared for.

Effects on income and job security for caregivers

Twelve years ago, it was estimated that the cost of balancing work with caregiving could cost a woman an average of $565,000 over her lifetime in lost wages, Social Security, and pension benefits². Today, that figure is around $324,000, which is still a substantial financial loss³.

A few explanations for the reduction in the loss of income could be that:¹

• Men have become more involved in the responsibilities of caregiving and are sharing in the loss of income
• Employers are more likely to be aware of their employee’s caregiving responsibilities and may show some flexibility
• Workplace benefits for caregivers have increased in availability, which could help spare caregivers from loss of income
  • Flexible paid time off – meaning a set number of paid days off are available for whatever the need is, (i.e. vacation, sick day, etc.) allows caregivers to take paid time off to tend to caregiving responsibilities.
  • The availability of paid family leave has increased substantially
• Flexible work hours and work from home opportunities are more available than 12 years ago, which may help a caregiver juggle caregiving duties with work responsibilities

However, despite many of the above improvements, some employees are hesitant to disclose caregiver status to their supervisor unless it would result in qualifying for caregiver benefits. Top reasons not to disclose caregiving status were

• Fear of losing their job
• Being unfairly discriminated against by their employer
• Being passed over for promotions
• Feeling their situation is private information they do not wish to share⁴.

It is also interesting to note that benefits that could be of help to caregivers were likely more available to men, younger employees, and persons of higher education and income⁴.

More caregiver information than in the past¹

Caregiving is a major challenge for many Americans, which has resulted in more studies designed to understand the effects of and changes in caregiving. In addition, there is more support available than 12 years ago to help caregivers handle their challenges, including online help that is far more advanced than it was in the past. For example:

• Caregivers can easily use the internet to search for services, facilities, and other help they may need with their care duties.
• The internet can also be used for managing and ordering the patient’s prescriptions and placing orders for groceries and supplies.
• Caregivers are using online videos to learn how to perform specific caregiving tasks

However, some online opportunities available to caregivers are also being missed or not utilized

• Caregivers are underutilizing the internet to connect with other caregivers – potentially a missed opportunity for emotional support
• Until the pandemic hit, only a few caregivers were taking advantage of online opportunities to help their patients virtually consult with doctors vs. in-person visits. Since the pandemic, online consultations are becoming the norm for caregivers as well as the general population – due to necessity.

Location of care

Another change we have seen over the last 12 years is that people receiving home-based care from a loved one are now more likely to be living in the same home as their caregiver¹.

But then some things don’t change. Men continue to be more likely to receive care at home – primarily because their spouse is there to help care for them¹¹. That old adage “men die married” still holds true for the majority of men¹¹. One reason that women represent over 70% of residents in facilities may be that their husbands have passed away – most of whom received care at home – leaving the widowed women without a spouse to care for them¹¹. Some women will choose to receive home-based care from family or a home health care service, while those with means may choose facility care offering more socialization such as a CCRC (continuing care retirement community). Other women may have no choice – nursing home care being their only alternative due to health reasons or reliance on Medicaid.

For years, LTC insurance companies have reported that just over 50% of claims began with home health care5. However, the pandemic has negatively impacted the occupancy of assisted living facilities, memory care facilities, and nursing homes while the demand for home health care has risen sharply.⁶ It will be interesting to see if in-home care reverts back to the old percentages if and when the pandemic-based risks and fears of facility care are eradicated.

More options for receiving care

There are more choices for care services than there were twelve years ago. More assisted living facilities, continuing care retirement communities (CCRC), and even alternative care services exist now, providing choices for more customized care.

For example: A individual or couple might want to size down and move into the independent living section of a CCRC where they can enjoy socialization, activities, and no more upkeep of a home. But should a need for help with their care arise, they may be able to contract with the CCRC directly for needed care services to be provided in their living unit, which in turn may allow them to remain in their current living situation longer, and delay or avoid going to assisted living.

The expansion of cash indemnity policies, where the insurance company places no restrictions on how LTC benefits are spent, have expanded the opportunity to use LTC benefits for alternative care services and has also made family care a more palatable option.

• Family members can be paid, resulting in less financial stress due to caregiving
• Family members may be more comfortable being paid by their loved ones knowing the money is coming from an insurance company benefit, not their loved one’s savings.

Long-term care is still a double-edged sword for women

The last twelve years have seen many positive changes in the LTC industry that have been helpful to women, but in the end, it is still a double-edged sword women should plan for – both as a caregiver and as the cared-for.

Women as caregivers¹

• Women caregivers are more stressed than male caregivers
• Women are less likely to be employed than male caregivers
• Women spend as much as 50% more time in caregiving than men⁷
• Women caregivers who work are more likely to earn hourly wages while male caregivers are more likely to be salaried. This creates a bigger financial impact on women who must cut down work hours to provide care.
• Women caregivers report a greater need to rely on friends and family than men who provide care
• Women are more likely than men to care for someone that is not a relative
• Women caregivers are more likely to report having no choice than men who are caregivers
• Women are more likely to be the primary caregiver

Women as the cared for

• Women live an average of 5 years longer than a man, which helps to explain why there are more women in need of LTC services than men⁸
• Women are 3 times more likely to live to age 90 – which helps explain why 80% of women are widows by age 90 (compared to only 40% of men)⁹
• Women comprise 64% of long-term care claims¹⁰
• Women are likely to be on an LTC claim 50% longer than men¹⁰

Helping clients plan for their long-term care needs

While the last 12 years have continued to see a downward shift in traditional LTC sales and the number of insurance companies selling traditional LTC products, there are also more choices than ever before to help clients find the right LTC funding solution. More companies are offering linked benefit LTC policies (also known as “hybrid” or “asset based”), which offers many of the popular features of traditional LTC policies, but with premium protection and guarantees. LTC riders on life insurance are also now abundant, allowing people to plan for the life insurance needs they have now with a policy that can transition later to LTC coverage to help pay for future LTC needs.
Long-term care protection is something everyone should consider, and it is especially important for a couple to understand that coverage for the husband is just as important as for the wife. LTC benefits received from a policy on the husband can be used to pay for the heavy physical caregiving a husband may need. This can help preserve the health and well-being of the wife, leaving her in a better place to attend to other caregiving tasks for her husband as well as remain engaged with family and friends.

Summary

As America continues to age, the challenges of long-term care will become more critical than ever before. By helping clients now in planning for a potential LTC event and how to help pay for it, financial professionals can help ease the physical, financial, and emotional stress faced by caregivers and care recipients – both more likely to be women.