July 22, 2011

AARP: Value of Unpaid Caregivers Worth $450 Billion in 2009

An AARP report found 61 million Americans were unpaid caregivers at some point in 2009

LTC iconA report released Monday by AARP’s Public Policy Institute put the value of unpaid care for a friend or family member at $450 billion in 2009.

By comparison, that’s more than the total 2009 sales of Wal-Mart, and more than the combined 2009 sales of Toyota, Ford and Daimler, according to AARP.

The report, “Valuing the Invaluable,” found that at any given time, more than 42 million family caregivers are providing care to an adult, and about 61 million provided care at some time during the year.

The value of unpaid care increased 21% between 2007 and 2009, in part due to an increase in the number of caregivers (which increased 23%) and hours of care (which increased 9%). An increase in the overall value of care from $10.10 per hour in 2007 to $11.16 in 2009 also added to the higher value of unpaid care.

Almost two-thirds of caregivers are women and more than 80% are caring for a friend or relative who is at least 50 years old.

“Most caregivers don’t think of what they’re doing as work,” Susan Reinhard, senior vice president for Public Policy at AARP, said in a statement. “They think of it as what families do for each other. They don’t think of themselves as caregivers.”

More than one-quarter of caregivers reported suffering a financial hardship as a result of their caregiving duties, and the recession led 24% of caregivers to cut back on care-related spending. More than 40% of caregivers spend more than $5,000 per year on caregiving expenses.

Almost 70% of caregivers reported having to adjust their work schedule to accommodate caregiving duties, including quitting work entirely in some cases. This is especially dangerous to caregivers as it affects their ability to save for their own future needs, but “they also can lose job security and career mobility, and employment benefits such as health insurance and retirement savings.” The lifetime income-related losses for caregivers who leave the workforce are “about $115,900 in wages, $137,980 in Social Security benefits, and conservatively $50,000 in pension benefits.”

Caregivers are not the only people bearing the costs of caregiving. The report estimates that U.S. businesses lose over $33 billion annually in lost productivity from full-time workers with caregiving responsibilities. The average annual cost to employers for one full-time worker who is a caregiver is $2,110.

Furthermore, caregivers have higher health care costs than their non-caregiving coworkers. Regardless of the age of the caregiver, they were more likely to report fair or poor health than other workers, and were more likely to suffer depression, diabetes, hypertension or pulmonary disease.

The report pointed to several trends that could make caregiving in the future even more difficult. In fiscal year 2010, more than half of states reported an increased demand for home care and community-based care services like home-delivered meals and transportation. However, more than one-third of caregivers have found that budget cuts have made it difficult for government agencies and nonprofit organizations to provide the services they need. Also in fiscal year 2010, 31 states cut non-Medicaid service programs, and the report estimates 28 states expect to cut community-based service programs in fiscal year 2011.

“The national economy remains a prolonged concern not only for state and local agencies that administer HCBS, but also for America’s families—those who receive care and those who provide the care,” according to the report.

Compounding the lack of resources, later marriages and fewer children mean adults will have fewer family members to depend on should they need care in their old age. With fewer family members to provide support, paid care facilities could find themselves overwhelmed by the demand for services.

Consumer-directed services, the report found, have emerged as an “important, flexible, and cost-effective model in Medicaid and state-funded HCBS.” Under a consumer-directed model, patients manage a personal care budget that allows them to hire their own caregivers and purchase other necessary goods and services.

“The unpaid contributions of family caregivers to the person being cared for and to society are huge. Yet the health risks and financial hardships that may accompany the caregiving role are substantial and well documented,” according to AARP. “Involving family caregivers in a meaningful and practical way, and supporting their own care needs, should be a key component in all new models of care that aim to integrate primary health care and [long-term service and support systems].”

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