Bonnie Kraham: Taking care of loved ones costs families billions

More than 44 million people in the United States act as caregivers for elderly or disabled loved ones, devoting significant amounts of time, money and energy.

According to researchers at the RAND Corporation think tank, the informal cost of elder care in the United States paid by caregivers out of their own funds is more than $522 billion every year, representing more than 30 billion hours of labor. Both personal and opportunity costs of caregivers are being ignored, causing serious problems for caregivers across the country.

The RAND Corporation calculated the cost of unpaid work caregivers perform for their elderly loved ones in addition to the opportunity cost of caregivers, meaning caregivers lose their own income due to the time spent in caregiving. The $522 billion spent on elder care every year by caregivers is more than all federal spending on Medicare in 2013.

The new research used 2011 U.S. Census Bureau information about the amount of time people spend helping elderly relatives and friends.

The RAND study is similar to a report published by the MetLife Foundation in 2011 that estimated the average amount of lost wages and Social Security benefits for caregivers over the age of 50 to be more than $300,000. The total aggregate loss in wages and Social Security benefits across the country was almost $3 trillion. Unfortunately, government entities and nonprofit organizations do not provide caregivers with much needed financial help.

Caregivers often use their own money taking care of loved ones out of necessity. The Medicare program does not cover any type of long-term care, and elderly loved ones do not qualify for Medicaid unless they fall beneath the income and asset threshold for care. Some caregivers rely on their elderly loved one's long-term care insurance coverage, but very few people have long-term care insurance and many companies increased their premiums to unsustainable rates.

Not much help is on the horizon from legislative action. Congress has yet to renew the Older Americans Act that provides funding for elderly services such as nutrition and transportation. The federal commission on long-term care has yet to agree on financing long-term care, a debate dating back to 2012.

Experts agree there is no simple solution to the issues surrounding the informal cost of caregiving. Reforms will require a combination of private insurance and public assistance from state and federal institutions. Some have suggested the creation of a social insurance system to cover the costs of any catastrophic care needs, while others suggest that employers need to do more in terms of helping employees who double as caregivers. Other ideas to help cover the gaps in the informal and astronomical costs of caregiving include elder care benefits and flexible workplace schedules.

The lesson here for potential caregivers may be to encourage parents to obtain long-term care insurance coverage so that, in the event a son or daughter has to leave their job to provide caregiving, the insurance can replace their lost wages.

Bonnie Kraham is an attorney practicing elder law estate planning with Ettinger Law Firm, 75 Crystal Run Road, Middletown. She can be reached at 845-692-8700, ext. 119 or bkraham@trustlaw.com. This column is intended to provide general information, not legal advice.

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Bonnie Kraham: Taking care of loved ones costs families billions