Transform 2010 POLICY BRIEF Examining Issues Critical to the Age Wave

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1 Transform 2010 POLICY BRIEF Examining Issues Critical to the Age Wave MARCH 2009 Themes for Action Redefining work and retirement Supporting caregivers of all ages Foster communities for a lifetime Improving health and long term care Maximizing use of technology Transform 2010 is a project of the Minnesota Department of Human Services In partnership with: Minnesota Board on Aging & Minnesota Department of Health TACT INFORMATION transform.2010@state.mn.us Web site General inquires Call Minnesota Board on Aging (651) What Will Keep Family Caregivers Caring? Policy Alternatives for Minnesota Executive Summary Policy Issue A historically large older adult population poses a challenge to Minnesota. The dramatic increase in the number of individuals age 85 and older is especially important, as people in this age group often require support and assistance with day to day tasks. The trend toward smaller, dispersed families and older householders living alone suggests that fewer individuals will be on hand to provide care just as older Minnesotans need for support becomes most critical. Fewer in number, family caregivers will be in greater demand and endure greater burdens than the current generation. Minnesotans have demonstrated remarkable support for their older family members, but Survey of Older Minnesotans results suggest that this support is waning. As recent as 1988, the percentage of long term care support provided by informal sources was 97 percent, as compared to 92 percent in Given this downward trend, the commitment of Minnesota family caregivers cannot be assumed as a constant as we move forward. However, the fiscal realities and constraints of providing publicly funded care for a growing number of older Minnesotans makes the role of family caregivers essential to sustaining their quality of life. In fact, family caregiving may be among the most important factors in affording the cost of future long term care, but only if the needs of the caregivers are recognized and sufficiently met. Demographics Background Between 2010 and 2035 the number of Minnesotans age 65+ will more than double, rising from 677,000 to 1.4 million. The number of Minnesotans age 85+ will also more than double, reaching 222,000. In 1940, the average family had 3.8 members, whereas by the year 2000 it had reduced to 3.1. Projections indicate that the downward trend in family size will continue, falling to 2.8 by By 2010, it is projected that 187,500 Minnesotans age 65 and older will be living alone. The number will grow to more than 383,000 by 2035, representing an increase of nearly 50 percent. Link to full Policy Brief This is an executive summary version of a longer policy brief by the same title. The extended version of What Will Keep Family Caregivers Caring? is available at the Transform 2010 website:

2 Family Caregivers 92 percent of personal support to older adults is provided by immediate family members or informal helpers in the community. In 2006, the total number of family caregivers in Minnesota was estimated at 610,000; 16 percent of Minnesotans age 18 and older are providing care and support to an adult family member. A typical caregiver in Minnesota is a 46 year old woman providing support to a 77 year old female. Caregivers also fulfill other valuable roles as workers, parents or grandparents. Nearly 60 percent of all caregivers are also working, the majority full time. Sources of Assistance for Activities of Daily Living insecurity, and foregone opportunities are all common burdens associated with caregiving. Caregivers face many adverse physical health outcomes, including higher blood pressure and insulin levels, increased threat of cardiovascular disease, and compromised immune systems. Family caregivers also experience higher rates of depression. Working caregivers who reduce work hours, stop employment or forego advancement opportunities earn less income and face greater economic insecurity in their retirement. One report estimated average, annual out ofpocket costs of $5,531 for care receiver expenses. Estimated Value of Caregiving and Expenditures, 2006 Agency 8 "Hired Help" 7 Friend or other relative 18 Child/in law 35 Spouse $8.000 $7.000 $6.000 $5.000 $4.000 $3.000 $2.000 $1.000 $0.000 $7.100 Value of Caregiving $5.420 Total $2.630 Long Term Care $1.578 Home & Community Based Services Percent of older Minnesotans reporting use of support Economic value and expenditures reported in billions of dollars Source: Survey of Older Minnesotans, 2005 Economic Value of Family Caregiving In 2006, the total estimated economic value of caregiving in Minnesota was $7.1 billion. Caregiving value in exceeds total spending in medical and long term care services. In 2005, Minnesota Department of Human Services estimated that the State of Minnesota spends an additional $30 million annually for each 1 percent decrease in informal sources of support. Benefits and Burdens of Family Caregiving Caregivers develop skills, knowledge and a personal sense of mastery. They also report satisfaction demonstrating their love and fulfilling their familial obligation as a spouse, daughter, son or granddaughter. Time deficits, emotional strain, health risks, mental health problems, financial burdens, retirement Source: AARP Public Policy Institute, 2007 Current Support for Family Caregivers Minnesota s allocation of Older Americans Act (Title III E) dollars in 2007, with the addition of special project grants, amounted to $2.4 million. Total funding, from all sources, was $6.3 million for caregiver support services in This investment represents only 1.5% of the State s share of Medical Assistance for nursing facilities. In 2007, 38,000 family caregivers received more than 164,000 hours of service across five major categories: 1) information about available services; 2) assistance in arranging supportive services; 3) education, counseling, coaching and support groups; 4) respite from various caregiving responsibilities; and, 5) supplemental services (e.g. home modifications). Transform 2010 Policy Brief Executive Summary What Will Keep Family Caregivers Caring? 2

3 Policy Alternatives The policy alternatives portion of the policy brief presents approaches to caregiver support across three major types: caregiver support services, caregiver financial support, and working caregiver support. Each of the three policy alternative types includes a discussion of a number of policy options that may warrant our attention, support and investment. We have selected one policy option under each type to analyze in greater depth, providing s and s to pursuing this approach. Caregiver Support Services Formal state wide coordination of caregiver support services began in early 2001 after the reauthorization of the federal Older Americans Act established new funds for the development of the National Family Caregiver Support Program. The central goal was to build a collaborative and integrated network of support that was personcentered, affordable, accessible and diverse to meet the needs of caregivers. A successful system would result in informed, trained, healthy caregivers of any culture or age directing care decisions and providing quality care and support as long as they desired. Recently support for informal caregivers has been explicitly linked to reducing expenditures on formal long term care services. The growth of flexible respite care, consumerdirected care, and the caregiver coach service model are important developments in recent years. The payment of family caregivers as Personal Care Assistants under the Alternative Care and Elderly Waiver programs was also begun during this time. Evidence based services have become the focus of current system planning. Provide multiple sources for caregiver support information and access (e.g. the Minnesota Help Network) Partnerships with health care providers, employers, service organizations and places of worship may expand access. Target at risk caregivers and extend their care Service approaches to support caregivers should directly address risk factors common to caregiving. Customize services to meet unique caregiver needs Caregiver Coaches or Support Planners could play a key role to ensure that caregivers receive timely and tailored support. Provide Multiple faceted, Evidence Based Services Research has shown that a collection of services delivered in concert seems most promising. Live Well at Home Nursing Home Diversion A Rapid Screen tool identifies at risk caregivers according to seven common risk factors. Diversion Supports coordinated by a Support Planner provide a customized service response.. Tailored Care Caregiver Assessment Demonstration T Care is an evidence based approach which uses a screen and assessment to identify caregivers emotional levels and needs. A Caregiver Coach offers customized strategies via decision making maps to address the identified stress and needs. Family Memory Care Alzheimer s Demonstration The initiative establishes a state wide network of Memory Care sites where Caregiver Coaches work with families and medical clinics to strengthen family based care. Family members participate in six counseling sessions, as well as support groups. Caregiver Financial Support Caregivers devote a significant amount of time to their role, on average 20 hours per week. A smaller segment of caregivers, nearly 20 percent, report providing more than 40 hours per week. Family caregiving represents a tremendous financial asset for the public, but a financial liability for many caregivers. To date, caregivers providing this valuable family and public service have largely gone uncompensated. Working caregivers frequently reduce hours, use un paid leave, and face salary plateaus due to foregone opportunities. Two 1999 reports estimated average life time wage and salary losses as a result of caregiving at $550,000 and $659,139. Transform 2010 Policy Brief Executive Summary What Will Keep Family Caregivers Caring? 3

4 Research suggests that women spend ten additional years out of the workforce as compared to men (i.e and 1.3 years). A 2006 study found that caregiving significantly increased the risk of poverty in late life. A 2007 study reported average estimated out ofpocket expenses at $5,531 per year; $8,728 for long distance caregivers. Reform Social Security One approach would be to institute a caregiver credit that would stand in for lost compensation. A second approach would be to augment the amount of income reported during a caregiver s five lowest income earning years. Provide direct cash payments or assistance Money could be delivered as a refund for caregiver out of pocket expenses, or in a more generous instance, as direct compensation for caregiver duties. Promote and expand consumer directed care One policy approach would be to strengthen the existing Community Directed Community Supports feature of the Elderly Waiver and Alternative Care programs. An outcome of this effort would be financial support for family caregivers. Provide tax credits or deductions Credits could target at risk caregivers, help ensure nursing home diversion and connect caregivers to evidence based services. Recent proposals for state or federal tax credits or deductions range in value from $500 to $5,000 per year. Working Caregiver Support 60 percent of family caregivers are also employed, most full time. 2 in every 10 employees are caregivers; this proportion doubles when employees are predominantly middle aged females. Working caregivers experience well documented burden and strain balancing their work and caregiving roles. Working caregiver burden and strain commonly result in worsened self care. Caregivers experiencing health decline are more likely to cease their role and seek formal services for their care receivers. Employers face costs associated with working caregiver health decline. Working caregivers who routinely miss work or permanently reduce their hours can negatively impact productivity. Promote and adopt flexible workplace policies Adopting flexible workplace policies that address the needs of employers and employees is an attractive, low cost strategy. Cover eldercare costs through flexible spending accounts Modify current flexible spending accounts to cover elder care expenses, ideally for non dependent parents and parents in law. Reform and expand FMLA in Minnesota Minnesota could strengthen FMLA by allowing working caregivers to take leave for their seriously ill parent in law, grandparent, grandchild, or sibling. A more transformational change to FMLA might include offering pay during FMLA leave. Adopt universal paid time off Universal paid time off would allow workers to roll together all of their time off and manage it as their circumstance demands, whether for leisure, personal illness or eldercare. Strengthen current paid sick leave benefits Policy makers and employers could ensure that all Minnesota workers receive paid sick leave. A more incremental change would allow working caregivers to use paid sick time to care for a sibling, parent, stepparent, or grandparent. Conclusion A historically large older adult population poses a challenge to Minnesota. The fiscal realities and constraints of providing publicly funded care for a growing number of older Minnesotans makes the role of family caregivers essential to sustaining their quality of life. This brief has laid out a wide variety of alternatives, with special attention given to three approaches: investing in a smart, evidence based caregiver support system; delivering targeted tax credits for caregivers; and, expanding paid sick leave benefits to include eldercare. Each approach promises some advantages for caregivers and some gains toward meeting the needs of an aging population with proportionately fewer family caregivers and potentially fewer fiscal resources. Transform 2010 Policy Brief Executive Summary What Will Keep Family Caregivers Caring? 4

5 & Summary Table of Major Policy Option 1: Invest in an expanded, state wide caregiver support system. The improved system would include service customization to target the needs of at risk caregivers and the use of evidence based services. Caregivers are more likely to delay institutionalization of care receivers if they receive support early. Multi-component, evidence-based interventions have been shown to delay nursing home utilization up to 18 months. Evidence-based screening and assessment tools help ensure that caregivers most at-risk receive support. Services customized to assessment results promise greater impact and cost effectiveness. Equipping and supporting family caregivers in the community ensures overall quality of care for care recipient. This option complements emerging, national trends related to customized, consumer-directed care. Screening and assessment tools may be perceived by caregivers as intrusive and stigmatizing. Health care and community services providers are slow to view caregivers as clients in their own right. Certain elements of evidence-based models may be difficult to implement in both rural and urban settings. T-Care assessment tools are still being tested and are not ready for broad dissemination. Integrating current initiatives and demonstrations into one successful approach may prove difficult. Exemplar models of fully implemented state-wide caregiver assessment tools and protocols do not yet exist in US. Policy Option 2: Provide a caregiver tax credit that targets caregivers most at risk of attrition and care receivers most at risk of nursing home placement. Require credit recipients to participate in evidence based services. Tax credits based on assessments and linked to participation in evidence-based services will reach at-risk caregivers. Tax credits targeted at caregivers most at-risk of attrition could produce cost savings in publicly funded long term care. Tax credits may provide an incentive for caregivers to enroll in evidence-based support services. Assisting caregivers with out-of-pocket expenses would freeup household income for personal savings and retirement. A number of western, industrialized nations have adopted caregiver tax incentive programs, including Canada. Tax credits elevate the importance and highlight the social value of family caregiving. Tax credits are not likely to deliver meaningful cost savings for the state. Tax incentives do not appear to motivate caregivers to initiate or maintain their role. Multiple eligibility requirements may improve benefit targeting, but may also pose barriers to participation. Tax credits and deductions provide delayed, rather than immediate relief. Tax credits address short-term, out-of-pocket costs, while doing little to ameliorate long-term financial burdens. Similar caregiver tax credit proposals have yet to be enacted in Congress or in other State Legislatures. Policy Option 3: Extend current paid sick leave coverage to include the care of dependent and non dependent older adults, such as parents, step parents, parents in law, and grandparents. Employers who offer paid sick-leave experience higher workforce retention rates. Employers viewed by working caregivers as supportive yield improved morale and greater loyalty. Caregivers who use paid sick leave to attend to customary eldercare avoid longer-term absences. Caregivers would experience less financial burden and greater economic security through fewer lost wages. Employers may experience reductions in health care plan use due to greater employee self-care and wellness. Care receivers may experience more successful health care discharges if adult children are available for the transition. Employers may believe that this policy change would raise costs rather than save costs. Employers may fear that extending the scope of sick leave coverage will lead to future expansions of the policy. Caregivers could incur and protest wage deductions to share the cost of an expanded sick-leave benefit. Caregivers who provide care to partners, friends, siblings or other family members would not benefit from this change. Minnesota may do better to expand paid sick leave coverage through employer tax incentives rather than a mandate. A transformational change extending minimal paid sick leave to all workers would have a greater impact. Transform 2010 Policy Brief Executive Summary What Will Keep Family Caregivers Caring? 5