Poll: Californians ill-prepared for the costs of aging

August 16, 2011

By Daniel Weintraub

California’s population is aging, but most older adults underestimate how likely they are to need help with daily living as they grow older, and few are prepared to handle the potential cost, which can be huge.

This disconnect has implications not only for individuals, who risk being left penniless and still needing care, but also for the government and for taxpayers, who eventually will have to pay for nursing homes for people whose medical and long-term care bills leave them impoverished.

Californians, meanwhile, are largely unaware of a new federal program designed to help bridge that gap. That initiative could be wiped out in its infancy if Congress repeals the federal health reform law passed last year.

This article is one in an occasional series on aging with dignity, independent living and public policy that affects both. For a complete archive of the articles, click here.

These and other findings about Californians and their views about aging with independence are from a new poll of voters age 40 and up by the UCLA Center for Health Policy Research.

The survey, conducted for the center by Lake Research Partners with a grant from the non-profit SCAN Foundation, found that more than half of those polled could not afford more than three months of in-home care if they had to pay for it themselves, and about a third could not afford even one month of assistance.

The economic slowdown has hurt the ability of middle-income Californians to pay for long-term care insurance or save for their own needs. At the same time, the sluggish economy has led the state to roll back programs that help low-income people live as independently as possible.

The result is a ticking time-bomb for the state: Demographic, economic and government trends are converging to create a generation of Californians ill equipped to pay for the care they will need even as the state is providing less help to those who can’t afford it.

Steve Wallace, a professor in the UCLA School of Public Health, who helped supervise the poll, said 90 percent of those surveyed said they would like to remain at home as they aged.

But while 70 percent of Americans eventually need help to deal with their daily living, two-thirds of Californians underestimate how many people need such assistance.

“Even people who are caregivers don’t think they themselves are going to become old or disabled and need help for years in their old age,” he said. “There’s a lot denial that goes on.”

That denial means that even people who can and do save for their retirement usually do not factor in the cost of home health care or a nursing home. And very few people purchase long-term care insurance.

According to the Health Policy Research Center, the average cost of in-home care is $2000 per month. And a month in a nursing home costs $6,500.

More than half of those surveyed (53 percent) said they could not afford to pay for more than three months of in-home care. And 66 percent could not pay for more than three months in a nursing home.

Current data and demographic projections suggest that 70 percent of seniors will be unable to live in their own homes without some kind of help. Yet only 37 percent of the people in this poll understand how likely they are to need assistance. The mistake was true across racial and ethnic differences, household income levels and geography throughout California.

Dr. Bruce Chernof, president and CEO of the SCAN Foundation, which funded the poll, said he believes the survey’s most important finding was that a majority of Californians, regardless of party affiliation, believe that “doing something about long term care is a really important public policy issue.”

Chernof said he thinks the state should better educate people about the challenges they are likely to face. He also thinks the state should reorganize its own services for the aging to better coordinate them and make them more centered on the needs of the consumer or patient and less wedded to the needs of the agencies that run the programs.

“That would start by asking, what are the person’s needs?” Chernof said. “A key to that is a thoughtful, uniform assessment. And then asking what resources are available to really help that person in the most effective way?”

An example of the widespread ignorance about long-term care that the poll uncovered was an almost total lack of awareness of a new federal program created as part of the health reform bill passed by Congress last year.

Known as the Class Act – for Community Living Assistance Services and Supports – the program is to be open to all and paid for with voluntary deductions from employee’s paychecks. Employers will have the ability to deduct the premiums automatically unless workers opt out.

People who pay into the program for at least five years would then be eligible for a cash benefit they could spend on services of their choice, including in-home care.

Nine out of ten California voters over age 40 are unaware of the program, which is scheduled to roll out next year. But when told of its details, 88 percent said they favored the idea.

Note: HealthyCal.org receives funding from the SCAN Foundation.

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3 Responses to Poll: Californians ill-prepared for the costs of aging

  1. Pingback: State roundup: Health insurance ruling reverberates; Fla. to accept some health law funds; California’s aging issues | Life Insurance Health

  2. Pingback: State roundup: Health insurance ruling reverberates; Fla. to accept some health law funds; California’s aging issues

  3. kteague

    August 22, 2011 at 10:34 am

    I managed an elder couple in their very late 80′s (married for almost 70 years) who chose to live out their lives independently in their home. If institutionalized, they would have been separated as she had dementia (a supervising, lower cost ward) and he had kidney failure from high blood pressure (a skilled nursing ward). The 24/7 in-home care required for both was handled by one independent contractor at a time (5 rotate between 21 shifts per week) at a very low cost $13/hour (tune of $1600/week or $83,200/year). The man secured long term care insurance ($2100/mo max payout or $25,200/yr) in his early 80′s, however she was “too far gone” to qualify. Since all their adult children lived out of state, I was on 24/7/365 on-call retainer to manage ALL their affairs (an additional $6931/mo or $83,172/yr which included covering their transportation, minor clothing/repairs/maintenance, food, toiletries, incontinence & non-prescription care needs…plus holiday/birthday/family-in-town dining) from keeping them in competent/dignified 24/7 care to planning/keeping their same pre-care routine/lifestyle to all food, medical, church, clothing, bills, property, etc. including driving, planning and submitting all medical/insurance paperwork–not to mention 24/7 bedside patient spokesperson/advocate every time they’re hospitalized. I say all this to point out their care alone cost $166,372 per year. This does not take into account that a separate vehicle may need to be purchased to accommodate hauling two wheelchairs, four people (the two elders and one person to push each chair on errands/outings), and the items purchased while on the outings (i.e. groceries, medical equipment). For purposes of my comment, I do not include in this annual total the long term insurance payout (actually monthly reimbursements) due to still having to come up with the initial payout cash and its many “ifs” to qualify both personally (the industry standard of needing to be incapable of performing 3 out of 6 industry defined Acts of Daily Living) AND caregivers (if one can even find worthy caregivers the policy will approve–as family, power of attorney, un-nursing certified, etc. don’t qualify). Now, tack on medical co-payments/prescriptions/equipment/house-retrofits, eye/hearing/mobility aids, salon (hair/nails), entertainment, utilities, insurance, property taxes (house is paid off), lawn/pool services and major repairs/replacements. This annual sum does not take into account the power of attorney adult child who handled all of their accounting/legal matters. I believe the total outlay for my clients to continue living independently at a very high quality of life cost close to $175,000 ANNUALLY. I do not believe it is morally right to warehouse a large percentage of our elders in institutionalized (grouped) care–the human needs are met, but the individual/family is lost. Nor, do I believe there are enough commercial buildings to house the aging boomers in–not to mention the lack of taxpayer funds to keep them housed/cared, and the glut of vacant single family homes in the wake of institutionalizing the boomer generation further driving down California’s depressed real estate market. As proven above, one-on-one paid care to continue living independently (and as a married couple) is even more expensive than group care–but at least the qualities that separate the person as an individual versus a mere human are not lost (the true quality of life everyone fears will be lost when put into a large group care home). I believe the poll described in this article is very accurate in that the costs required to maintain one’s care (much less independence and dignity) is beyond the visual scope and comprehension of any individual who has not seen the elder care field from the inside. And, for the average middle-class citizen, how is that cost even attainable to pay even if the true figures were realized? In my opinion, our society needs to revert back to elder care like we do childcare–not every middle-class child is institutionalized in group daycare, and the ones who are get their care paid for privately. Those middle-class who cannot afford care manage to provide it themselves–through family, neighbors, co-ops, etc. Note: I do no address low-income families here as they already know they will bear the burden of caring for their elder, since they do not have the funds to pay for care/institutionalization; or, they will rely on subsidized government care just like is currently set up for low-income childcare. I do not believe our society can financially sustain public subsidized care for middle-class elders/convalescents as well once their private funds run dry.

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