The costs of senior care are often extraordinary, and the baby boomer demographic — which consists of 73 million Americans, the oldest of whom are turning 77 this year — is not prepared for it, according to the Washington Post.
“The dilemma is particularly vexing for those in the economic middle,” the story reads. “They can’t afford the high costs of care on their own, yet their resources are too high for them to qualify for federal safety-net insurance. An estimated 18 million middle-income boomers will require care for moderate to severe needs but be unable to pay for it, according to an analysis of the gap by the Center for Retirement Research at Boston College.”
Questions related to the supply of home health aide workers and the aversion most people have toward nursing homes also hamper the prospects for addressing this need, on top of the fact that people don’t often consider these kinds of questions until very late in life.
While the vast majority of older Americans prefer to age in place within their own homes, dedicated care staff to accomplish such a goal is in short supply to meet senior care needs, the story reads.
“[M]edian costs for 40 hours a week of assistance from a care aide in the home, for things such as bathing, dressing, eating and toileting, run over $56,000 a year,” the story says. “A shortage of home care aides, moreover, was exacerbated by the pandemic.”
Moreover, assisted living facilities are often out of reach for many seeking senior care, with base rent of around $4,000 a month. That cost balloons significantly if the resident has dementia, the story says.
According to data from Genworth, the average monthly cost for different types of senior care is lowest when looking at an in-home care aide ($4,690). Assisted living is $4,977, while dementia care is $6,709. Nursing homes are the most expensive at over $10,000 per month.
The reverse mortgage industry has aimed to position itself as a potential path toward financing in-home care for older people. A recent study showed that people often believe that programs like Medicare cover the costs of long-term care, but this is not actually the case.
A 2022 report from the Associated Press cited reverse mortgages as an option to pay for long-term care, while reverse mortgages were described as having “reemerged” as a payment option in a story from U.S. News and World Report. However, the home value and amount of loan proceeds available would ultimately determine the sustainability of such a funding option.
