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Eldercare Costs Skyrocket, Draining Family Finances
16 Aug
Summary
- Eldercare costs rise faster than inflation, outpacing essentials.
- Millions of Americans are financially unprepared for these expenses.
- Caregiving is upending lives, careers, and depleting savings.
Eldercare costs have escalated significantly in recent years, leaving millions of Americans unprepared for the financial strain. Prices for nursing homes and adult day services have outpaced overall consumer prices, including food and shelter, over the last three decades. This surge is driven by rising caregiver wages, increased insurance premiums, and transportation expenses.
Families are reporting six-figure costs for eldercare, with some forced to use home equity, take out loans, or leave their jobs to provide care themselves. The mismatch between the demand for care workers and supply is expected to worsen due to a caregiver shortage and demographic shifts. Approximately 70% of adults over 65 will require some form of long-term care during their lifetime.
Long-term care costs for nursing homes have increased by 212% since 1997, and adult day services by 109%. Home care services now cost a median of $34 an hour, with private-pay costs for home health aides and homemaker services rising substantially between 2019 and 2024. Medicaid does offer some support for long-term care services, but it doesn't always fill the financial gaps for families.
Efforts to address this crisis include legislative proposals for national long-term care insurance and payroll tax programs in states like Washington and California. Some employers are also beginning to offer eldercare resources and support services to their employees, recognizing the growing burden on their workforce.
