No matter how much you plan and whatever you anticipate, the reality of what you or a loved one will pay for long term care is often unpredictable and frequently unmanageable. While we’ve posted about this issue earlier, it’s important to keep this in mind: long term care prices keep escalating, policy initiatives keep failing, and the aging population that will need long term care keeps growing. As a country, we are on an unsustainable course when it comes to caring for older adults, and for many older individuals and their loved ones, that unsustainable course is already present. For one stark example of how paying for a parent’s long term care can be a financial nightmare, read the personal saga of long term care expert Amy Goyer here (Wall Street Journal paywall).

A few basics to underscore this point: First, the costs. Due to rising prices and staff shortages, the costs of long term care are climbing significantly beyond their already high prices. For example, if you examine the costs of home-based care (given that 90% of us want to grow old at home, this is a reasonable cost to consider), in the year 2021 costs for this sort of care rose by double digits. In its annual survey of long term care costs, Genworth found that due to staff shortages caused by Covid as well as a tight labor market, the costs of long term care necessitate that families carefully plan (as best as possible) and must discuss the type of care needed as well as the best place to deliver that care. Genworth has a Cost of Care calculator that may help you with those discussions.

If you’re hoping to find financial support from such government programs as Medicare or Medicaid, a quick reminder is in order: Medicare covers very little long term care and Medicaid varies state by state and has strict coverage limitations and long waitlists, especially to pay for care at home. Further, while you are permitted under Medicaid regulations to keep certain limited assets, the reality of your financial circumstances must be pretty grim and the documentation you need to provide (as well as the assurance you are not trying to hide any money) is steep. While it’s always possible you might find additional coverage/financial support through a Veteran’s program, a home equity line of credit, or a generous relative, the chances are you’ll be putting together a patchwork quilt of incomplete financing for an unpredictable path ahead. As was reported in a recent column from New York Times columnist Paula Span, “Becoming frail and needing help with basic personal care is probably the greatest financial risk people face as they get older.”

And speaking of those generous relatives, most of us are probably well-intentioned in wanting to support and take care of the needs of our aging loved ones. But the costs can be very steep, not only financially, but emotionally and even physically. As Liz Weston from NerdWallet writes, the financial toll on a family caregiver can be enormous, both in terms of footing the actual bills and lost compensation from either missing work or even leaving a job if necessary. If you leave a job (which many family caregivers end up doing) there is also lost income potential, lost opportunity to build up a retirement account, and loss of future raises you might have been given. As Ms. Weston says, “A few years out of the workforce can leave you hundreds of thousands of dollars poorer at retirement.” According to a recent AARP study, the out-of-pocket expenses that family caregivers bear can really add up. Just to make a home more “age-friendly” can cost thousands of dollars if you want to put in a walk-in tub (at least ($5000) or a chair lift for stairs (at least $8000). Whether it’s paying for housing or home modifications, or extra help to cover needed care, many family caregivers wind up taking loans, racking up enormous credit card debt, or borrowing money from some other source.

And if you think these physical and financial responsibilities for a loved one’s care end when you yourself get older, think again. There’s a growing trend of those in their later years (think over 80) still providing or paying for care for their even older parents or for other aging relatives. Not only do older family caregivers have their own health concerns (which require money) but the toll of caring for others can exacerbate their own health problems. As one older caregiver made the point, “I’m caring for my elderly father when my own sun is setting. There are people who die at my age.” This is the reality of today’s long term care chaos: Those in need of help often cannot afford it, those who try to help may need the money for their own care, and those who try to develop policies to address this caregiving financial nightmare run smack into the reality that there’s little appetite on the state or federal level to find the funding to help pay for long term care. Bottom line? Most of us are in the same boat when it comes to the financial burdens of paying for long-term care, and the boat is tipping over. Not clear whether the coast guard will be there to rescue us.