Broadcast Retirement Network’s Jeffrey Snyder discusses the stresses caregivers face and who should pay for adult care later in life with University of Michigan’s Sarah Patterson, PhD.
Jeffrey Snyder, Broadcast Retirement Network
Joining me now is Dr. Sarah Patterson of the University of Michigan. Dr. Patterson, it’s great to see you. Thanks for joining us this morning.
Sarah Patterson, University of Michigan
Yeah, thanks for having me on. I appreciate it.
Jeffrey Snyder, Broadcast Retirement Network
And I do want to congratulate the University of Michigan on winning the national championship. I did not watch the game because it passed my bedtime. I’m sure you guys must be excited.
Sarah Patterson, University of Michigan
So congratulations. Thank you. It’s been really fun.
I also admittedly, I don’t know if I can, but I also went to bed early.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, well, you have an important, we’re going to talk about the research that you all do there. I mean, this is very, and a good segue. So congratulations to all the folks watching this at University of Michigan.
Well done. We’ll see you again next year. Well, Dr. Patterson, you know, obviously you do a tremendous amount of research in this area. I guess I, you know, I know just from anecdotally from talking to other guests that caregivers are under tremendous amount of stress. And oftentimes they’re unpaid or they’re paid a small amount of money relative to the work they’re doing, but you’ve done a lot of research in this area. So let me ask you a baseline question.
Sarah Patterson, University of Michigan
Yeah.
Jeffrey Snyder, Broadcast Retirement Network
Who pays for caregiving?
Sarah Patterson, University of Michigan
Yeah. So family caregivers and friends and community members are providing a lot of care for older adults in our communities. We find that about 88% of care provided to an older adult is done by their family members.
And so they’re doing the bulk of it, but you know, I’ve done focus groups with caregivers in the community and I find that friends are pitching in, people from church are going to get groceries once in a while for someone. So it’s really a family and community based event. And what they find is that about, you know, $7,000 out of pocket per year is spent on older adults care by family members or friends or other people.
So older adults, even, you know, if they’re not getting a paid helper, so they’re not paying someone to come in, or they’re not in a facility that requires payment. Family members are often paying for medication, paying for somebody to come by and doing these things that cost money for them. They’re paying out of their pocket because there’s not a lot of support programs.
Jeffrey Snyder, Broadcast Retirement Network
Well, $7,000 to me seems like a lot of money. I would imagine just thinking about the average American income, that’s a big proportion of someone’s income. And let’s not even account for, I’m not an economist, you’re the professor and doctor, but there’s opportunity loss when you’re taking care of a loved one and you’re not, probably not getting compensated.
So that’s a lot of, that’s a big out of pocket expense.
Sarah Patterson, University of Michigan
Yeah, I think it’s a huge cost for people. And if an older adult needs more intensive care, so if they need to go to a nursing home, that can create even bigger costs. So locally here in Ann Arbor, Michigan, the cost to put an older adult in a nursing home that specializes in memory care starts at $12,000 a month.
And as you can imagine, that is a huge cost for many families, and often they’re going it alone.
Jeffrey Snyder, Broadcast Retirement Network
So how do they, I mean, do you take a, and maybe you didn’t look at this in the study, but do they take a reverse mortgage? I mean, how do you pay for something like that? Because $12,000 times 12 is $144,000.
I didn’t learn my multiplication tables, but that seems like a lot of money and it’s starting at that. How do they pay for that? I mean, does Medicaid, Medicare, long-term care insurance cover some of that?
Sarah Patterson, University of Michigan
Yeah, so it depends on what people have. If they have long-term care insurance that can help pay for it. If people are on Medicaid, that can also pay for it.
But I know that you’ve had other speakers on where they’ve talked about the fact that you have to spend down and you only have a certain amount of assets that you’re allowed to have, which then creates other financial problems for families. But oftentimes families, there’s not a lot of planning that goes into this often because people think it might not happen to them, or they’re just not sure. There’s a ton of information out there.
There’s a ton of things that can happen. And so I think it’s often hard to plan. And even people who make plans, things might come up, but really a lot of people, I think they either don’t pay for those facilities or they scrape by somehow by taking out loans and things like that.
So that’s what I would say, yeah.
Jeffrey Snyder, Broadcast Retirement Network
Yeah. And I don’t want to use the C word crisis because that’s often overused. But it seemed to me in an aging society of which we’re going to have more people that are age 65 than at any time.
I think they call it peak 65. We’ve got boomers. I’m Gen X, the millennials.
There’s going to be a lot of people that are going to be needing care. Are we at a tipping point where we need to come up with a national or at least state level solution to some of these major challenges with, look, getting old is great. You want to live long, but this is part of the challenge.
Sarah Patterson, University of Michigan
Right. Yeah. So I think just based on the number of older adults that we have turning 65 each day, which is estimated to be about 10,000 people a day, there are more needs among older adults in the community for families to take care of them.
And so what this means is that we are reaching again, like you said, crisis, you know, gets thrown around a lot, but for many families, it can be a crisis. So having to take on this care can impact their ability to work, which then impacts their own ability to save and have safety nets for themselves later down the line. It can impact their health, their emotional wellbeing.
So it can have a huge impact on the family caregivers that are providing this. And I think what you see is that it’s sort of a groundswell sort of situation where now there’s, this is becoming much more common. So before, you know, parents didn’t live that long, people are living much longer.
So we’re enjoying these experiences with our parents much longer. But, you know, basically we’re living longer with our parents and that’s allowing people to extend their life course with their family members. So then that means more years together where they’re needing care later in life, which is then putting that impact back on the caregivers.
Jeffrey Snyder, Broadcast Retirement Network
What about, you know, we have migration in this country where people move from, you know, I grew up in Baltimore, Maryland. I live in Charlotte. My parents still live in Baltimore.
Now that’s only a 45 minute or an hour or so flight, but there’s a distance now. We don’t have our families living. I mean, it may be in some communities that still occurs, but it used to be that the grandparents live with their children or one of their children, right?
So that creates, I think, another layer here.
Sarah Patterson, University of Michigan
Yeah. So in the US, you know, we’re a nation of independence. People want to live in their own home by themselves or with their partner long into later life.
And so what that means is that families move away, like you said, which causes a distance between being able to just, you know, go across the street to take care of your parent one day if they need something. But what we find is that, you know, even if children or other family members live far away, they’re still providing care for older adults in many ways. They’re helping to manage their health care, either through participating virtually or making calls.
They’re balancing their finances and tracking that they might be hiring somebody to come in and help take care of the older adult. So even if people are geographically dispersed, they’re often still caregiving from far away. But it does raise the question of, you know, who can help with what?
Because, for instance, you can’t help someone eat or bathe if you live a few states away. So it does create an issue for some families where there is, you know, a particular person who does that and then someone else does different tasks. But it does create an issue for older adults and caregivers.
Jeffrey Snyder, Broadcast Retirement Network
Well, certainly, you know, if you look at your research, I think there’s research by other academicians. There’s, I think, AARP just put out something in the not-too-distant past about the cost of caregiving. Some were, you know, quantifying opportunity lost.
So are there answers? I mean, you said there’s a groundswell of maybe, I’m paraphrasing you, but a groundswell of need or information. Is this where kind of the private sector and government, both state, local, federal, and, you know, try to work together to come up with solutions?
Because it seemed to me that, you know, you need to, if you’re a, you know, Gen Alpha, you need to start saving now for these challenges down the road.
Sarah Patterson, University of Michigan
Yeah, yeah, it’s for sure. And what we find in our research on people’s attitudes towards who should be primarily responsible for paying for older adults care, we found that over time, more and more people are saying the government should primarily help pay for these caregiving, for caregiving for older adults. And I think the tricky thing about that is that they’re not saying the government should do all of it.
People still really want their family to caregive for them. Families want to caregive for older adults. But really, I think it’s more that the public is saying, we need a little help and we need a partnership between the government and families and these sort of social safety net programs and families in order to take care of all the older adults that are going to need care into the future.
And that can look a lot of different ways. So for instance, it could be tax credits. I think tax credits are increasingly gaining popularity.
In polling of people, of Americans, you find that they’re highly supported. Both caregivers and the general public highly supports tax credits for caregivers. But there’s other options, right?
We could technically pay family caregivers out of different programs. But really, tax credits have shown themselves to be widely popular, as well as a few states have implemented them with great success.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, I think you’re right. Absolutely. I think this is going to continue to bubble up as we continue to get older.
This is going to be a strain, especially when there’s affordability challenges going on now with the price of gas, food, etc. Maybe some of those prices will come down. But at the end of the day, if more people are getting older and we have fewer caregivers, the cost of caregiving could really skyrocket.
Dr. Patterson, we’re going to have to leave it there. Great research. But look, we look forward to having you back on the program again very soon.
Sarah Patterson, University of Michigan
Great. Thanks. I look forward to joining again.