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  • Writer's pictureNicholas Pihl

Notes on Long Term Care


"But to throw out one more statistic, more than half of all Americans over age 65 will need some level of significant long-term care before they die. So, you can sit down at the dinner table and look at the person next to you, and one of you is going to need this care. But you don’t know which one. And that’s the huge challenge here. Most people will get away with not needing very much long-term-care costs. But there’s going to be a fraction of people who are going to need a quarter of a million dollars or more in long-term care."

"About 80% of care is provided by family members, and most of that is provided by family caregivers without any paid help. So essentially, it is a spouse or an adult child who is taking care of their parent alone. I did it, and I should say in the support of my gender that actually about 40% of long-term care is provided by men. That number seems to be increasing a little bit....There was one study that was done some years ago that estimated that the lost lifetime income of a woman who leaves her job to care for a parent is $300,000. That means lost wages, lost Social Security benefits because you have those quarters you’re not paying into, a lower 401(k) because you have that period of time where you weren’t contributing. So, it’s a huge burden."

"But there are also multigenerational programs. There are things called cohousing, where you may get people of different generations all living in the same building. And part of what they’re buying into is the opportunity to help one another. So, you might have a situation where you have an older adult who maybe isn’t driving anymore but can help babysit some kids. And maybe the parents of those kids can in return say, we’ll go shopping for you. Can we pick something up at the grocery store? In a less formal way, there has been a rise in recent years of what they call senior villages. And these are people who are aging in place who are living in their communities, but they’ve gotten together in nonprofit organizations, where again, they agree to help one another."

"The biggest problem is the risk. The actuaries use this phrase they call tail risk, and it’s become a huge challenge for the long-term-care industry. Remember when we talked before about the fact that half of the population is going to need some care? The actuaries can figure that out pretty well. What they can’t figure out is how long people are going to need the care for. Cognitive impairment is one of those things. It’s hugely challenging to figure out how it’s going to progress. What’s happened is you had a population of claimants, of people who have long-term-care benefits, who are living much longer than the long-term-care industry ever thought they would. To pay those claims has cost the industry much more than it ever expected."

"More or less, rough numbers, 12 million people currently require long-term care, sufficient long-term care that they need paid assistance. Of that, maybe 700,000, 5% or 6%, are living in nursing homes. Another 5% or 6% are living in assisted living facilities. And we can talk about those because there’s a lot of confusion about what assisted living is, but they’re living in assisted living facilities. Everybody else, 85%, 90% of people who are receiving long-term care, are getting it in their homes."

"it can be very lonely. Imagine, again, a situation where you’ve lived in the suburban cul-de-sac, you raised your kids, you had friends in the neighborhood, and now your friends have all moved, or they’ve died, and you’re now living in this neighborhood and your neighbors are all different. They’re young families with kids and they don’t know you and you don’t know them. And your friends who may now live 20 miles away can’t drive anymore because they’re having trouble seeing. So, it becomes a very lonely existence. And there are good reasons why, at least in some cases, people might want to think about living in some alternative setting. And like I say, it may be independent living in a senior community, it might be just moving to an apartment, but something different than aging in place. Again, most of us can do it for a while, but there comes a time when many people just can’t."

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