Even before the global pandemic, there were staffing shortages in elder care facilities. Then you throw staff burnout and vaccine mandates into the mix, and things are just getting worse. Add to that the large number of baby boomers about to enter facilities, plus the inflation due to high demand, and the industry is facing a crisis.
As of 2020 when Genworth did their Cost of Care Survey, the annual price of an assisted living facility in Chicago IL was $59,400. And the expected price of that same room in 20 years was $107,283. Almost double. But with demand so high, some people are seeing prices go up much faster than was previously expected. Inflation of long term care services is causing many families to panic.
When the price of soda goes up, you switch to generic. If the price of meat goes up, you start to eat more vegetarian dishes. Even when gas prices rise, you start to combine your trips to be more efficient. But when the price of long term care services goes up, you don’t have much of a choice in the matter.
Seniors requiring care can somewhat depend on family, friends, and neighbors up to a point. But in most cases, at some point, professional care is required and even preferred. Some seniors can afford to self-insure, but the large majority won’t be able to afford it. Other seniors have so few assets they can spend down and hopefully find a facility or care provider that accepts Medicaid. But the rest of seniors, those somewhere financially in the middle, hopefully have some form of long term care insurance coverage. Otherwise it’s a combination of resources, such as family helps on Mondays, hired caregivers come Tuesdays and Thursdays, etc.
"We all should have bought Google stock in 2004, a case of toilet paper in February of 2020, and we should all look into long term care insurance by our mid-fifties."
Then the question becomes, how long can we sustain this? How long do most people need care? According to the American Association for Long-Term Care Insurance, the statistics on men vs women aged 65 are quite telling. Requiring care for 1-2 years, women are at 18% and men are at 21%. Requiring care for 3-4 years women come in at 11% and men at 10%. And requiring care for 6 or more years, women are at 20% and men are at 12%. Often women are care providers for their husbands before services are required.
So what can we as consumers do to lessen the anxiety over long term care services inflation? Get a higher paying job and greatly increase our savings? Maintain peak physical health well into our eighties? Thoughts and prayers? Perhaps a combination of all three. However, I would also suggest long term care insurance (LTCI). It protects assets, pays for care, and gives peace of mind to you and your loved ones.
For those already experiencing a long term care event, there’s some hope. Advances in technology make monitoring and communication easier. States are actively working on legislation to ease some of the financial burden. And there are services out there to assist families with difficult decisions, such as Amada Senior Care. However, there will almost certainly be challenging times ahead.
We all should have bought Google stock in 2004, a case of toilet paper in February of 2020, and we should all look into long term care insurance by our mid-fifties. If you’re older, it’s not too late, there are other options. And if you’re younger and have a family history or significant assets to protect, we have options for your scenario as well. Chat with a specialist and request a quote today. Don’t wait until there’s a long term care event, and it’s too late.