Why America’s Aging Care System is Broken - The Caregiving Crisis

Introduction

In 2023, there are an estimated 38 million caregivers, giving roughly 36 billion hours and $600 billion dollars worth of care to their aging relatives.[1] As the population struggles to keep up with rising healthcare needs not being met by the medical system, the costs are crippling families across the nation. Read on to learn how everyday Americans are facing the aging crisis and what can be done to help family caregivers in the US.

Brief History of America's Aging Care System

For the first two hundred years of American history, families stayed with their nuclear units throughout the duration of their lifetime, with grandparents helping to raise children and adult children caring for their aging grandparents. At the onset of the Industrial Revolution, the manufacturing of goods increased, with many Americans leaving their home to help drive domestic production.

Over time, household compositions shifted to a more national reliance on public health care instead, with older adults living independently more often. Between the years 1940 and 2020, the number of households comprised of only one person tripled. The greatest shift occurred between 1970 and 1980 when a 5% increase in single-person households occurred.[2]

Independent Seniors Still Rely on Families for Help

As the American family dynamic shifted, so did the nation’s reliance on outsourced home and health care. However, the burden of cost has always remained on the individual for the most part, and so families are reunited when aging needs become too much to handle. By 2011, over 14.7 million caregivers helped older relatives with their daily needs,[3] with over half of them receiving no payment for their services.[4]

In response to the heightened reliance on unpaid family caregivers, the Family Caregiver Alliance was created in 1977. To further support older adults as the gray tide swept over the nation, the National Center on Caregiving was formed in 2001. These and other programs have been able to craft legislation to assist family caregivers, such as serving as a model for the Older Americans Act’s National Caregiver Support Program.[5]

The Current State of the Caregiving System

As of the writing of this report in 2023, the crisis has shown no signs of slowing down. In fact, between 2010 and 2020, the percentage of adults over age 65 in America rose by 15.5 million, the largest such increase in history. While the number of elders in the country was about 1 in 20 in 1920, the senior population has grown at a rate of 1,000%, about five times faster than any other age group.[6] Additionally, life expectancy has risen significantly in recent years, to an average age of 73.4 globally,[6] a 56% increase since the average age of 47 in 1950, with people living much longer in developed countries. In the US, people live an average of 78.5 years.

Consequently, the number of people who rely on family members for help with activities of daily living (ADLs) and medical needs has risen dramatically in the past few decades. Currently, there are an estimated 38 million family caregivers, most of whom receive no pay and use their own money to pay for relatives’ medical care.[7]

Sandwich Generation Family Caregivers

Another group at a categorical disadvantage is those who care for minor children as well as older relatives. Dubbed “sandwich caregivers,” these family caregivers face significantly more challenges than those without children. In 2015, there were about 2.5 million sandwich caregivers, representing nearly 25% of all caregivers in the country.[8]

The number of individuals providing care to both children and older family members grew to an estimated 11.5 million by 2019, a mere four years later. The added stress is only compounded by the fact that over half, 60%, of two-parent households have work outside the home as well, with 76% of individuals being employed while providing care. Furthermore, only 44% of caregivers have flexible work hours, 31% have sick leave, and only 13% have employee support programs.[9]

Understanding the Issues with the Aging Care System

While the aging population continues to outpace younger generations, the healthcare system is facing its own population crisis. Namely, the shortage of healthcare workers, particularly those in the senior care field. There are several reasons behind this shortage:

• The fact that the number of people retiring dramatically passes the number of people entering the healthcare field each year means there are simply not enough people to provide care.
• COVID-19 has reduced the number of people trained in healthcare who are available for senior care, as many hospitals and clinics have had to re-organize staff to care for the people affected by the virus.
• Insufficient funding in the social services that help pay for medical care combined with rising medical costs has led to a national crisis of people who need aging care but simply can’t afford it.

There Simply Isn’t Enough in Families Budgets to Meet Care Needs

Despite being aware of the impending “Gray Tide," the country has remained woefully unprepared for the real-life implications. The consequences for care recipients and providers are quite dramatic, and rising—the cost of food has risen 4.3% in 2023 alone, medical costs have risen an average of 4.5% across the board of medical industry,[10] and wages have remained stagnant.

While this might not seem like much, the reality is that families are bearing the weight of the nation’s inability to handle the aging crisis. A recent AARP study shows that the typical family caregiver devotes one quarter of their income to paying for their older relatives care[11], 25% more than in 2016[12]. Furthermore, only a quarter of workers in the country have access to paid family leave, and less than half can take advantage of short-term disability options through their employer[13]. As a result, family caregivers often have to take on multiple jobs just to pay bills, and many seniors are forced to find work after retirement.

According to the Bureau of Labor, in 2022, over 100 million Americans worked one-quarter past the age of 65[14], an increase of 13,632% in only two decades[15]. To put it into perspective, you can probably see the results in your local community. For example, the number of workers over age 30 entering the fast food industry has nearly doubled in the past two years[16]. You may have even noticed this shift in workers at the grocery store and other retail outlets. There were 1,137,000 workers over the age of 65 in the retail industry in 2022, about one-tenth that of the “retired” workforce and 7% of total retail workers[14].

Rising Care Costs

Aging services have been increasing in cost over recent years, whatever the means of retirement you choose. Private-room nursing facility stays rose 2.4% in 2021, and 1.96% for a semi-private room, for a total average of $94,900. Assisted living facilities costs rose 4.65% to a national median cost of $54,000 per year in 2021.

Lastly, the cost of in-home care rose much more dramatically, at 12.5%, with personal health assistants costing a median of $61,776 in 2021 and homemakers (which provide less medically intensive care services, such as cleaning and cooking) costing $59,488.17 Medications have also risen in price. Studies indicate that we can expect an increase between 6-8% in the cost of prescription drugs in 2023, which will likely be passed directly onto consumers.[18]

Workforce Challenges

One reason for the shortage of qualified care providers is the low wages being offered for the high-stress position. This issue is worsened by the fact that by 2029, an estimated 1 million more home caregivers will be needed to meet the nation’s need for aging services. Currently, the average wages for home health aides across the nation range from $12 per hour in the lowest paying states and max out at $18 per hour in the highest paying states.[19]

New Reliance on Family Caregivers Causes Strain on Working Households

Family caregivers across the country are picking up the slack where the retirement and healthcare systems have failed. According to a recent AARP study, 78% of caregivers pay out-of-pocket costs for the care of their older relatives, at an average of $7,242 annually per caregiver.[20] The average caregiver spends just over a quarter of their annual income on caregiving expenses. This number varies across groups[21]:

• 41% of African-American family caregivers were under annual financial strain due to caregiving costs.
• When considering income, Hispanic and African-American caregivers experience the highest financial burden.
• Asian Americans have the highest out-of-pocket expenses on average, as well as the highest mortgages, and relatives' medical costs—though they also have the highest incomes.
• Women are more likely to live in poverty due to prioritizing caregiving duties over working out of the home, and Hispanic and Asian American women tend to incur higher out-of-pocket costs than men.
• People with dementia incur higher caregiving costs; caregivers of dementia patients have out-of-pocket costs of $8,978 on average.

The disparities grow when you include gender. A recent study shows that mothers in the workplace tend to face lower wages (5% lower for each child they care for, to be precise) and less incentive to work outside the home altogether.[22] To add to the financial instability, workers are often forced to leave their jobs because of insufficient time to care for their families.

Many older Americans have had to seek employment after retirement to help make up for lost wages by the primary breadwinners in the house who have had to sacrifice work hours to fill care needs. A recent study by the National Council on Aging shows that nearly a quarter of the workforce in 2022 is comprised of retirees. Only thanks to Social Security benefits (which average $511 a month[23])are 16.1 million adults living above the poverty line, while about a third of retirees in the country are living below it.[24]

Impact of Low Wages and High Turnover Rates

Financial instability is one major cause of high turnover, as families lose access to affordable help with their aging issues. People paying for private help out of their pockets may need to take up an extra job or simply go without extra help if they can’t afford it. Caregivers may be forced to leave a family if they are able to find better-paying work, having their own needs to pay for.

People fortunate enough to have private long-term care insurance coverage, or those with Medicare and Medicaid, may face changes each year as their plans change providers. Furthermore, caregivers are less incentivized to stay with a family when their wages are too low to afford their own needs.

The impact of high turnover is twofold, affecting both caregivers economically, and care receivers personally. In order to provide consistent care, it’s necessary to spend time and form a bond, particularly in cases where your loved one is diagnosed with dementia or Alzheimer’s disease. These people might be especially susceptible to confusion and agitation, and having to form a relationship with a new caregiver could pose a challenge.

Potential Solutions

One such potentially successful model would be the addition of long-term care insurance to the healthcare marketplace. This is how the Netherlands’ government[25] has been able to tackle the issue, with their country being second best for healthcare in 2021.[26] This is also a solution that has been posed by numerous states across the U.S.

Technology could also serve as a way to bridge the gaps in care, using AI and robotics to bring specialized aging care services into the home. Companies such as Nationwide have begun researching the possible use of AI robotics for in-home senior care. A recent survey from the insurance giant shows that one-third of older adults would be happy to integrate a robotic helper within their household, talking to them to appease loneliness, save medical information, and to rely on them to get help if they experienced a fall or accident.[27]

Countries identified in a Pew Research study[28] as having the fastest-aging populations have found ways unique ways to deal with their national crises’:

• The Netherlands became the first country to create long-term care laws in 1968. The country’s 2015 Long Term Care Act reforms those policies to better serve the needs of people who want to age in place, as well as expand long-term care coverage and improve support with more specifically structured service systems.[29] The country invests heavily in long-term care, family caregiver support, and social assistance, 4% of its GDP, more than any other country.[30]
• Germany, which had 15 million citizens aged 55 or older in 2000[31] and whose older population is estimated to double by 2050, adopted a long-term care law in 1995. The compulsory Long Term Care Insurance Act[28] has been strengthened twice since then to provide better structure for differing levels of ability and expanded assistance packages, especially for those diagnosed with dementia or Alzheimer’s disease.
• Japan is expected to have significantly more senior citizens than any other population group by 2050. The country has instituted a mandatory insurance program to help offset the costs for individuals entering long-term care, called the Long-Term Care Insurance (LTCI) system. After a risk-prevention campaign was adopted and failed, the government changed strategies to a community-based care model. Citizens begin contributing to their insurance fund at age 40, and anyone over age 65 can utilize the program and access care.[32]

How the USA Handles the Aging Crisis

While these approaches have been helpful in other countries, the USA has yet to formally adopt any compulsory aging insurance programs outside of social security, or offer family caregiver protection outside of FMLA. However, some bills have been passed at federal and state levels to protect aging adults and their families when facing long-term care needs. Many states have created aging councils and regularly examine new ways to address the needs of their aging populations. For example:

• The RAISE (Recognize, Assist, Include, Support, Engage) Caregiver Act of 2017 was enacted to give rights to the millions of family caregivers in the USA. Rights such as being on the patients' healthcare contact list, workplace solutions, and financial security.[33]
• The American Rescue Plan Act was enacted in 2021, and increased Medicare funding for Home and Community Based Services (HCBS). These programs are offered in most states, though funding may be lacking and there is usually a long waiting list (several years).[34]
• Washington state hosts the WA Cares Fund, a long-term care insurance program that is set to go into effect in July of 2026, though workers can make contributions to their accounts as of 2023. Similar to Medicare, the program offers services for individuals who qualify based on qualifying contributions of .58% of their earnings during their working years, and by needing care services.[35]
• Florida’s Home Care for the Elderly program, created for low-income adults over the age of 60 with in-home caregivers and other qualifications, offers a small monthly stipend ($160 in 2023) for care costs.[36]
• In Hawaii, the Kupuna Care Program assists those who fall in the “gap group”, or people who don’t quite qualify for government assistance, but don’t have private resources to fund home care.[37]
• The California Partnership for Long-Term Care[38] creates a network of highly-vetted long-term care insurance companies. In addition to trustworthy insurance options, the partnership strives to educate consumers on the need for long-term care insurance.

Family Caregivers Can Find Support with Olera

The issues faced by family caregivers are far-reaching and affect people in every corner of the globe, increasing each year as the world continues to grow older. Compounded with a bearish economy and increasing medical needs, the challenges family caregivers and their loved ones face need sustainable solutions.

If you’re a family caregiver, reach out and build a network of support in your life to help you handle the challenges you face. Browsing Olera’s family caregiver forum, you’ll see stories from people just like you, struggling to balance the needs of your life and the needs of your loved one. With cutting-edge AI technology, Olera can help you manage your numerous responsibilities. Visit the Olera family caregiver support network now to find answers to your everyday problems.

Author Bio

TJ Falohun, co-founder and CEO of Olera, is a trained biomedical engineer passionate about developing novel digital health and medical technologies. His passion for innovative solutions drives him to write about the cost of healthcare in America and to revolutionize the senior healthcare industry.

References

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