Who Are the Real Beneficiaries of LTCi?

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When a loved one needs long term care and their plan was “failing to plan,” it is often family members, neighbors, and friends who take on the role of caregiver. Whether they provide part-time care or full-time, caregiving takes a tremendous toll -- emotionally, physically, and financially. We have found that most people who purchase long term care insurance have one goal in common (besides the financial aspect): to avoid being a burden on their loved ones. Here’s why:

About caregivers:

52 million caregivers provide care to adults 18 and over with a disability or illness. (Coughlin, J. Estimating the Impact of Caregiving and Employment on Well-Being: Outcomes & Insights in Health Management, Vol. 2; Issue 1)
55% of caregivers reported they had been providing care for three years or more. The average days per month spent on shopping, food preparation, housekeeping, laundry, transportation, and giving medication is 13. The average days per month spent on feeding, dressing, grooming, walking, bathing, and assistance toileting is 6. The average time per month spent researching care services or information about disease, coordinating physician visits, and managing financial matters is 13 hours per month. (Gallup poll)

Financial toll on caregivers:

70% of working caregivers suffer work-related difficulties due to their dual caregiving roles. (The National Alliance for Caregiving and AARP, Caregiving in the U.S: National Alliance for Caregiving. Washington, D.C.)
Among working caregivers caring for a family member or friend, 69% report having to rearrange their work schedule, decrease their hours or take an unpaid leave in order to meet their caregiving responsibilities. (Valuing the Invaluable: The Economic Value of Family Caregiving. AARP Public Policy Institute.)

Physical toll on caregivers:

Caregivers, regardless of employment status, report that positive activities in their daily life are reduced by 27.2% as a result of caregiving responsibilities, and the effect on their personal life is 3 times more than the effect on employment. (Coughlin, J. Estimating the Impact of Caregiving and Employment on Well-Being: Outcomes & Insights in Health Management, Vol. 2; Issue 1)
Caring for persons with dementia is reported to impact a person's immune system for up to 3 years after their caregiving experience ends, thus increasing their chances of developing a chronic illness themselves. (The National Alliance for Caregiving and AARP, Caregiving in the U.S: National Alliance for Caregiving. Washington, D.C.)
40% to 70% of family caregivers have clinically significant symptoms of depression with about a quarter to half of these caregivers meeting the diagnostic criteria for major depression. (Zarit, S. Assessment of Family Caregivers: A Research Perspective in Family Caregiver Alliance (Eds.), Caregiver Assessment: Voices and Views from the Field. Report from a National Consensus Development Conference (Vol. II) (pp. 12-37). San Francisco: Family Caregiver Alliance.)

The costs to caregivers:

10 million caregivers over 50 who care for their parents lose an estimated $3 trillion in lost wages, pensions, retirement funds and benefits. The total costs are higher for women who lose an estimated $324,044 due to caregiving, compared to men at $283,716. Lost wages for women who leave the work force early because of caregiving responsibilities equals $142,693, and for lost Social Security benefits an estimated $131,351, and pensions an estimated $50,000. (MetLife Mature Market Group and National Alliance for Caregiving, Study of Working Caregivers and Employer Health Costs: Double Jeopardy for Baby Boomers Caring for their Parents)
At $450 billion in 2011, the value of informal caregiving exceeded the value of paid home care, more than total Medicaid spending in 2009, as much as Wal-Mart sales ($408 billion), and nearly exceeding total expenditures for the Medicaid program in 2009 ($509 billion) (Valuing the Invaluable: The Economic Value of Family Caregiving. AARP Public Policy Institute.)
50% of people entering a care situation (without LTCi) are penniless within one year) (US Department of Health and Human Services)

But with a long term care insurance policy in place, instead of caregiver these family members, neighbors, and friends can remain family members, neighbors, and friends.

A long term care insurance policy can also:

Relieve worries about Medicaid spend down
Provide assistance finding care locations
Allow daughters to be daughters and spouses to be spouses, not caregivers
Give your clients peace of mind

Then there’s also the legal aspect of long term care to consider. Did you know there are filial support laws on the books in 30 states^*?

These laws obligate certain family members to care for and maintain or financially assist indigent family members. Typically it’s adult children supporting parents, but oftentimes it’s the reverse: parents being required to support adult children.

In some states, only the family members themselves can file a claim. In other states, the county, state public agencies, or creditors can file the lawsuit. In some states, criminal penalties may be imposed. And some states even allow both civil and criminal penalties. In those states where you could be held civilly responsible, a judgment against you could result in your wages being garnished or liens being placed against your property.

Filial support laws have a retroactive application of liability and, unlike child support laws where you have clear numbers in advance, there are no guidelines in place.

Take the 2012 case of John Pittas, a 47-year-old restaurant owner who was sued by a nursing home company for $93,000 in expenses incurred by his mother over a six month period after she was denied Medicaid eligibility. The Superior Court of Pennsylvania (Health Care & Retirement Corporation of America v. Pittas Pa. Super. Ct., No. 536 EDA 2011, May 7, 2012) found in favor of the nursing home based on filial responsibility law, and the son was forced to re-pay the entire costs for his mother’s care. The court finding even granted discretion to the nursing home company to seek payment from any family members it wished to pursue.

Until recently, these statutes have largely been ignored. However, the Pittas court decision, along with several others, indicates there might be renewed interest in enforcing them. And with long term care costs on the rise, Americans living longer, and funding sources under pressure, nursing homes and other health care providers may have more incentive to compel family members to either help financially or be at risk for covering the cost of care. As more of the Baby Boomer generation reaches their golden years, and as many nursing homes and local governments are faced with providing care to a growing number of indigent elderly patients, there’s a real possibility other states may begin enforcing their filial support statutes in an attempt to find another way to fund a family member’s nursing home bill.

^*Alaska, Arkansas, California, Connecticut, Delaware, Georgia, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, Montana, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, West Virginia, and Puerto Rico

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