Average Cost of In Home Care for the Elderly

The average cost of in-home care for the elderly is a topic of concern for caregivers and elderly adults. Elderly parents and loved ones want to stay at home. This desire can be supported by providing in-home care for elderly parents by family members or paid caregivers. The average cost of in-home care for elderly parents extends beyond writing a check.

Family caregivers are devoted individuals who feel a great responsibility to care for elderly parents and loved ones to their own detriment. Because family caregiving is rarely discussed before an individual becomes a caregiver, little planning or discussion occurs about the long-term effects.

The Challenge of Financial Planning for Costs of In-Home Care

Financial planners entering the field at young ages have little life experience with the role of caregiving or the loss of life. Young adults are also untouched by health issues, believing that they will live forever. Unfortunately, the process of aging eventually affects the family.

Elderly parents needing care becomes a reality. Plans of how or where care will be provided are rarely discussed before the life transition of needing care and becoming a caregiver happens. A health emergency happens and families react in crises.

Financial planners find it difficult to make the idea of caregiving or care costs relevant to young and middle-aged adults who are untouched by the subject.  How does one talk about—and convince anyone of the importance of planning—for an experience that seems years down the road? By building expertise in this area financial planners will become more adept at talking to consumers about costs of care.

The Sandwich Generation Scramble

Adult children raising children often become responsible for the care of elderly parents. This life situation is called being in the sandwich generation. Adult children scramble to find workable solutions to manage careers, care for elderly parents, and raise children.

A survey from T. Rowe Price (1) called Parents, Kids & Money reveals information about how the sandwich generation manages. Adult children caregivers, 73%, agree that caring for a parent or relative takes time away from time with children.

The financial impact to sandwich generation families is significant.  On average, adult children are contributing $3,000 each month to the care of an aging parent. Arguments about money are common with 85% confirming disagreements with a spouse or partner about finances.

The Financial Stress of Caring for Elderly Parents

Nearly three-fourths agree that caring for my parent or relative has caused financial strain. The bright spot, if there is one, is that 83% agree that having to help care for an older parent or relative has impacted the way “I think about and plan for my own retirement.”

This is proof that relevance has a significant impact on planning for health and care in the later years of our lives. In addition to the hard costs of writing checks to pay for the cost of care for elderly parents, there are other work-related costs that are rarely discussed.

Work-Life Balance and Opportunity Costs For Family Caregivers

When we think of the average cost of in-home care for the elderly we may not think about the opportunity costs of unpaid family care.  Opportunity cost is defined as the loss of potential gain from other alternatives when one is chosen.  In this situation choosing to become a caregiver for an elderly parent has the opportunity cost of lost income for family caregivers.

Why is the idea of opportunity cost important and how does it impact public healthcare policy? An article in Health Affairs (2)  estimating the cost of lost earnings between 2013 and 2050 reports that the current opportunity cost is like to double.  The current cost of $67 billion dollars in 2019 is projected to double to $132-147 billion by 2050.

The increase in opportunity cost is due to the increase in disabled elderly. Family caregivers in the workplace will become caregivers who may trade time at work for time caring for elderly parents and loved ones.

The Annual Value of Unpaid Family Caregivers

Another figure, the annual value of family caregiving must also be considered. The AARP Public Policy Institute (3) estimated the annual value of family caregiving in 2017 to be $470 million.

How is this number calculated? For the most part, family caregivers help elderly parents and loved ones stay at home. Family caregivers, spouses, and adult children provide tasks and support that average 20 or more hours a week for long periods of time.

Care for loved ones with memory loss, dementia, and Alzheimer’s is also very expensive and consists of about 45% of the total value of unpaid family caregivers. Family caregivers delay nursing home placement of elderly parents and spouses. This unpaid care provides substantial savings to the public program of Medicaid.

The Economic Impact of Caregiving

As the population continues to age, the economic impact of caregiving will become more significant. Concerns exist that more highly educated and highly paid adults will reduce time at work or exit the workforce to care for elderly parents.

The effect of this may have a negative financial impact. Loss of income results in loss of income taxes, contributions to Medicare and Social Security, and other impacts not yet calculated. It is time that the role of caregiving becomes a larger discussion instead of pushing the role and responsibility on family members to solve.

Average Cost of In-Home Care

In 2019 dollars, the hourly rate for the average cost of in-home care for the elderly is $20 to $30 per hour. The rate depends on the type of assistance needed by the elderly parent. Companion-type services that involve task work around the home are generally in the lower range.

When elderly parents need hands-on care and greater assistance with activities of daily living (ADLs) more highly skilled caregivers are needed. The addition of a cognitive impairment diagnosis or mental illness also raises the rate.

Individuals diagnosed with brain injuries, mental illness, Alzheimer’s, dementia, or Parkinson’s disease require a caregiver with special experience and training. Many individuals with these diagnoses exhibit behaviors—both verbal and physical—that require a special type of response.

Tired of Being A Caregiver

Behaviors are one of the most challenging issues for family caregivers and a reason that elderly parents are placed in care communities. Daily support with activities of daily living like hygiene and incontinence are also reasons that elderly family members are moved to care communities.

When caregivers say, I’m so tired of being a caregiver,” the idea of moving a loved one becomes a family discussion. While helping elderly parents stay at home is a priority. A point may eventually come when the stress of being a caregiver is harmful to the physical and emotional health of the caregiver.

What is Assisted Living?

Safety issues with threatening behaviors, attempts to elope, and the physical stress of caring for elderly with mobility difficulties also arise. Assisted living, memory care, and nursing homes provide care for elderly adults.  Family members may be unfamiliar with the type of assisted living communities available, the costs, and sources for payment.

A Caring Generation podcast, “What is Assisted Living” answers common questions about the different types of assisted living communities. Also discussed is legislation to protect consumers searching for assisted living communities.

While moving a loved one is often viewed as a last resort, there are situations where moving an elderly parent becomes a necessity. The average cost of in-home care for the elderly is a complicated subject.

Personal and Financial Costs of Caregiving

The personal and financial costs of caregiving involve many aspects of care. Helping loved ones stay at home with the assistance of family is the most common source of in-home care for the elderly. Hiring in-home caregivers provides family caregivers with support and needed breaks.

The average cost of in-home care for the elderly is the emotional, financial, and work-life balance issues for family caregivers. Add to this lost employment opportunities and the costs of unpaid care and the numbers become significant. These costs will continue to grow with the increase in the aging population.

The healthcare system will also be strained by these growing numbers. Presently there is a shortage of healthcare workers in all areas: physicians, nurses, in-home caregivers, and other specialties. Care for the aging population will be a continued discussion that must become more widely discussed beginning early in life so that families can prepare for this significant transition in life.

Looking for More Help With Costs of Caring for Elderly Parents? You’ll Find What You’re Looking For in The Caring Generation Podcast called “Costs of Caring for Elderly Parents.”

Sources:

(1) T. Rowe Price2019 Parents, Kids and Money Survey Slide Presentation. Slide Share retrieved 11/13/19 https://www.slideshare.net/TRowePrice/t-rowe-prices-11th-annual-parents-kids-money-survey

(2) Mudrazla, Stipica, Work-Related Opportunity Costs of Providing Unpaid Family Care In 2013 and 2050. Health Affairs 28, No. 6 (2019): 1003-1010. Doi10:1377/hlthaff.2019.00008

(3) Reinhard, Feinbert, Houser, Choula, and Evans. Valuing the Invaluable: 2019 Update. AARP Public Policy Institute.  https://www.aarp.org/content/dam/aarp/ppi/2019/11/valuing-the-invaluable-2019-update-charting-a-path-forward.doi.10.26419-2Fppi.00082.001.pdf

© 2019 Pamela D. Wilson, All Rights Reserved. 

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