MoneySmart: The Real Cost of Long-term Care
How LGBT caregivers are paying the price
by Grace S. Yung
As baby boomers continue to reach retirement age, one topic that seems to be getting more attention is long-term care—but not necessarily for the obvious reasons.
Certainly, the cost of care continues to escalate. Due to inflation, according to Prudential’s Long-Term Care Cost Study (2010) research, the annual increase in the cost of long-term care services has tracked almost double the annual CPI increase over the past several years. That, coupled with stock market losses and shrinking retirement-account assets, has made it difficult at best for many to pay for care.
The cost of long-term care and caregiving can hit the LGBT community especially hard. Because many of the same shared health insurance and retirement benefits available to heterosexuals are not available to LGBT couples, oftentimes those couples must dip into savings in order to fund care expenses.
Caregiving Has Its Price
Jamie M. Grant (National Gay & Lesbian Task Force Policy Institute) estimates that in the U.S. approximately 80 percent of long-term care is provided by informal caregivers. This often comes at a high price. In fact, on average, those who provide care to others tend to experience:
• Loss of Income. Caregivers are much more likely to face the loss of income due to reduced work hours (or job loss), as well as the loss of employer-provided medical benefits.
• Loss of Retirement Savings. It has been estimated that because of time taken off from work and the added expense of providing care, informal caregivers can personally lose approximately $650,000 over a lifetime—considering lost wages, retirement savings, and Social Security benefits.
The cost of caregiving can be particularly intense for those in the LGBT community, starting with the likelihood of becoming a caregiver in the first place. A recent study conducted by Met Life found that because they are often considered “single” and do not have the usual time constraints of raising children, one in four lesbian or gay boomers is a caregiver, compared to one in five non-LGBT boomers.
Unfortunately for those in the LGBT community, there is less support available to them in terms of policies and programs designed to assist caregivers. For instance, the federal Family and Medical Leave Act offers many of those in a caregiving role job flexibility, job security, and even paid leave—but only if that caregiver is related to the recipient by blood or marriage.
Adding to the overall cost of providing care is the notion that even though at least three quarters of LGBT boomers expect to become caregivers for someone else, the majority of these individuals are unsure of who will take care of them when the need arises, or how they will fund their own care.
Amidst all of the physical, social, and financial strain of caregiving for LGBT boomers, there is a solution. Long-term care insurance can provide the funds necessary to pay for part or all of the cost of care—both in a facility, as well as at home.
Many policies today also offer cash benefits, meaning that funds can be made available from the plan to help cover the indirect costs that are associated with providing care to a family member or other loved one, while also allowing for the protection of savings and other assets that may otherwise need to be drained.
For More Information
Long-term care insurance policies can be designed to fit your specific needs. Therefore, it is important to discuss a potential plan with a qualified advisor who understands long-term care needs as they relate to the LGBT community.
Grace S. Yung has over 18 years experience as a certified financial planner and is a principal at Midtown Financial Group, LLC, in Houston.