Long Term Care, Nursing Homes and Women

In recent years there has been an avalanche of media coverage regarding long term care, with the primary emphasis put on the cost of group home and nursing home confinement. Since more than half of Americans will need long term care, the concern has almost universally been about the threat to one's assets and the impoverishment of a non-institutionalized spouse.

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Are Women Really At Risk ?

The question is, however, who is really at risk here? Have you ever visited a nursing home? Who are the nursing home residents, by and large? If your experience reflects the published reports, you found that the nursing home population consists primarily of elderly women - single, elderly women.

Findings of a study conducted by the Medicaid Department of the State of New York, and corroborated by the other studies, reveal the following:

 
Patient Admissions

Mean Age =

Female (%) =

Private Pay

83.9%

79%

 Medicare

82

87%

Medicaid

82.3

78%

 Widowed

62%

 Divorced

7%

 Never Married

19%

 A Living Spouse

12%

Average Facility Stay

Men =

Women =

 Median (mid point)

10 Months

15 Months

 Mean (average)

20 Months

30 Months

 

To summarize these significant findings:

  • Eighty percent of nursing home admissions are women.
  • The average admission age of these women is 82.
  • At that advanced age, most of these women are single.
  • Compared to men, women are confined 50 percent longer.

Let's face it, women usually outlive men. If a man doesn't die, he eventually beomes ill and his wife takes care of him until he passes. Or, his wife cares for him as long as she's able to do so. When she simply cannot continue, she admits him to a nursing home, and shortly thereafter he dies.

Therefore, in a nutshell, long term care is a women's problem. Women bear the most risk, whether it be while giving or receiving care.

Average Length of Stay in a Nursing Home

Way back in th 1990's, the Department of Health and Human Services Task Force on Long Term Care Policies published the following length of stay figures:

31% 1 month or less
21% 1 to 3 months
11% 3 to 6 months
7% 6 to 9 months
5% 9 to 12 months
10% 12 to 24 months
5% 24 to 36 months
10% ...longer than 36 months

 

So, 52% of all people admitted to nursing homes stay less than 90 days, and 63% stay for less than six months. What portion of those are likely to be men? Well, since women stay 50% longer than men, we can probably surmise that a large percentage of these "short stay" residents are men.

Statistical data was reported in Contingencies magazine, published by the American Academy of Actuaries, in an article titled "Who Should Buy Long Term Care Insurance." It said that, although there is a significant risk of financial disaster for men, the predominent people at risk of losing the assets are single, elderly women.

With couples, there exists a serious risk of impoverishing a non-institutionalized partner/spouse. Indeed, there remains the distinct possiblility of nursing home "forced spend-down" or erosion of assets to pay for nursing home care - depleteing assets that otherwise might be available keep for emergencies and lifestyle, pass on your family or gift to charity.

In addition, there is the issue of quality of care, and of the effects of inflation on one's ability to maintain nursing home "private pay" status. The above article assumes an inflation rate of 5%, although the inflation rate for the general "care sector" is now 6% per year. That means the cost of care will double every 12 years. If that rate continues, how soon will people spend down all their assets for nursing home care?

Can Women Afford LTC ?

Now we come to the real question. Can the people who are at most risk - primarily single, elderly women - pay for the care they would choose for themselves; i.e., will they have the freedom to choose the setting and the type of care they will want to receive?

Based on income alone, few of the single elderly can finance the cost of nursing home care, as seen in the classic illustration released in 1990:

 Annual Income

$25,000 or more
$15,000 - 24,999
$10,000 - 14,999
$ 7,000 - 9,999
$ 5,000 - 6,999
$ 4,000 - 4,999
$ 3,000 - 3,999
$ 3,000 or less
 Independent Singles
Over Age 65

7.6 %
12.5 %
15.8 %
18.2 %
22.2 %
13.4 %
6.3 %
3.9 %

 

Unfortunately, many currently elderly females have no pensions plans of any type - none based on their own work record and contributions, nor were they fortunate enough to inherit pensions from their husbands.

Those who do have pension benefits based on their own work record have very modest benefits due to the relatively low wages during their working years.

Although more women are now being covered by pension plans, the benefits they will receive will still be lower, again due to the lower wage base during their working years. Many women have also had to take an early retirement or cut back hours, due to their parents needing care.

Also, some reports still predict that only 10 percent of women will inherit a pension benefit from their husbands. That's if the company actually pays the promised pension, which is a question in itself these days.

Social Security is not a Retirement Plan

Currently, over 60 percent of the elderly rely on Social Security to provide more than one-half of their retirement income. Roughly one out of four people over age 65 receive 90 percent or more of their income from Social Security.

What about future retirees? Will they be as dependent on Social Security during their remaining years? With the shift away from true pension plans (defined benefit plans) to contribution-type plans (401K plans) funded largely with employee dollars, will the majority of employees exhibit the necessary discipline and actually creat a significant retirement fund? The Baby Boomers have not been known for their discipline...

Going back now to the 1990 studies, women who retired on Social Security received a benefit that was $11 per month less than the poverty level.

Obviously, there was little hope then of their paying for nursing home care if they relied upon their monthly Social Security checks for a large percentage of their income.

1990 Average Social Security Benefits:

Average Worker Benefit
All Retirees $507
New Retirees $507
Men $605
Women $462
Poverty Level (Aged, Single) $473

The picture has not become rosier. Many of the current and future single, elderly women will have to look to other sources to pay for other nursing home care. They will have to rely on:

1. public programs (Medicaid is being tightened drastically)

2. family (a tremendous caregiving challenge) or if they are fortunate,

3. private long term care insurance.

With my family history of seven family members in nursing homes, I know that your family will benefit from advance planning for these eventualities. It is my belief that long term care insurance protection is in your best interest. Please get it early - while you are still healthy enough to qualify and you can lock in the lower premium rates.