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Home is the New (and Costly) Frontier of Care

In 2021, home is not only where the heart is. Increasingly, it is where we keep our medical supplies, heal from illness, and get treatments that used to take place only in the hospital.

More and more, home is the new frontier of health care. And that emerging fact of life is adding financial strain to an array of pressures already borne by America’s nearly 48 million family caregivers. Parents, spouses, and other loved ones rely on their caregivers’ help to remain at home.

This finding jumps out of a new AARP report on the many out-of-pocket costs that family caregivers incur. While we’ve long recognized caregivers’ emotional and physical sacrifices, the research documents the financial sacrifice that also goes with the unpaid job.

On average, family caregivers spend $7,242 a year on their loved ones’ care, with eight in 10 taking on costs for housing, health care, and other necessities. Housing expenses like rent or mortgage payments, home modifications, and assisted living made up more than half of caregivers’ spending, followed by medical expenses at 17%. Such expenses typically absorb more than one-quarter of their income.

Averages tell only part of the story, however. Among the highlights of the new report:

  • All age groups pay a price. Millennials and Gen Z caregivers spend more of their income on caregiving than other age groups. But Gen X, born between 1965 and 1980, spends the highest dollar amount of all generations at just over $8,500.
  • Communities of color face the greatest strain. Hispanic and African American family caregivers experience a greater financial burden than Whites or Asian Americans. Hispanic caregivers devote 47 percent of household income to caregiving, and African Americans devote 34 percent.
  • Women, especially women of color, incur significantly higher financial strain and spend more hours per week caregiving. On top of having lower incomes to begin with, female caregivers spend on average nearly $700 more on their loved ones’ medical costs. Notably, Asian and Hispanic/Latina female caregivers spend a greater proportion of their incomes toward caregiving activities compared to their male counterparts (32% versus 12% for Asian, and 56% versus 38% for Hispanic/Latino).
  • Health care duties are raising the price tag. Caregivers who handle medical and nursing tasks spend $8,430 a year on average. Those whose loved ones have dementia spend $8,978 a year, and caregivers who help loved ones with mental health issues spend $8,384 a year.

The emergence of home as a center of care can be a wonderful thing. Almost all of us would rather be home than in a nursing home.

But they also experience stress. With no pay and little to no training, many are effectively becoming health care providers with life-and-death responsibilities.

Six in 10 caregivers now help with medical and nursing tasks. They operate ventilators, home dialysis, and feeding tubes. They administer injections and keep track of multiple medications. They handle meters and monitors to check blood sugar and blood pressure. They take care of post-surgical incisions, and they help individuals use hospital beds, lifts, and wheelchairs. They serve as advocates for their loved ones in a confusing, patchwork long-term care system and coordinate services their loved ones need to survive.

  • AARP fought successfully to enact the CARE Act in 44 states and territories, most recently Arizona, to support family caregivers as loved ones transition from hospital to home.

Powerful forces are pushing this trend. An aging population has more chronic health conditions – and prefers treatment at home. Cost savings and newer technologies encourage in-home care, as do earlier discharges from the hospital. A fast-growing global industry provides a broad range of services for illness or injury care inside people’s front door. Urgent care centers now offer access to an array of treatments in the community.

And all of that was going on before COVID-19. Once the pandemic hit, home’s status as a health care hub took a giant leap forward as telehealth became a common substitute for in-person visits to the doctor. Almost one in two consumers (46 percent) used telehealth last year, compared with just 11 percent in 2019.

For all these reasons, the role of family caregivers on their loved one’s medical team has intensified, even as they pay health care bills. Fees to doctors, hospitals, and nursing homes, as well as purchases of medical equipment, in-home health care services, and prescription drugs all add to the cost. Such expenses now account for almost a fifth (17 percent) of their spending on care, our new research has found.

Nearly half of family caregivers (47 percent) have encountered financial strain due to their efforts, the AARP report shows. In response, many have cut back on personal spending, dipped into savings, reduced retirement saving, and taken out loans – measures that can undermine their quality of life. Those with outside jobs – nearly six in 10 – face a particular financial squeeze as they struggle to balance all their responsibilities. Many take time off, change their work schedules or even reduce their hours, potentially putting their jobs at risk.

Family caregivers have earned some commonsense support, including training and services that would lighten their load. The new AARP research points to the importance of one particular type of assistance that could make a difference: direct financial support.

Our data make clear that many family caregivers are at the breaking point. They desperately need assistance to ease the financial stress they have taken on by caring for their loved ones. As one solution, AARP has endorsed the bipartisan Credit for Caring Act, which would provide a tax credit of up to $5,000 for eligible working family caregivers. The credit helps defray expenses such as home modifications, assistive technology, respite care, home care aides, adult day services, and more.

For most of us, home will always be where the heart is. But as the home becomes the new frontier of care, it is becoming a less affordable haven for family caregivers. We must do more to ensure that family caregivers get the support they need to live with financial security and peace of mind.

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