By Louis H. Brownstone

In his State of the State address on February 11, newly elected Governor Gavin Newsom spoke the following words regarding aging and long-term care:

“Now, let’s talk about something too often overlooked:  The Golden State is getting grayer.  We need to get ready for the major demographic challenge heading our way.

For the first time in our history, older Californians will outnumber young children. Over the next decade, our statewide senior population will increase by 4 million. In 25 years, it will double.  And more than half will require some form of long-term care.

Growing old knows no boundaries – aging doesn’t care what race you are, your economic status, or if you’re single with no other family support. I’ve had some personal – and painful – experience with this recently.  I lost my father over the holidays, after years of declining physical health and dementia.  He was determined to live out his days with dignity.  He also happened to be a retired public official with a pension and a support circle of family and friends.  Even with all those advantages, it was a daily challenge to meet his needs so he could live in peace and maintain a good quality of life. Millions of Californians share a similar story, and the numbers will only grow.  It’s time for a new Master Plan on Aging.  It must address…person-centered care.”

Governor Newsom is really speaking about two related issues.  The first is the financial impact of the aging baby boomers as they become sick and place huge burdens on Medi-Cal.  He states that long-term care expenses will double in 25 years, and that’s probably a low estimate.

The annual Medi-Cal increases will probably be over 5 % per year now, but could grow to as much as 10% per year from 2030 to 2050.  This is even in the absence of some sort of a single payer system for health care, which would cost billions more.  Where is the money going to come from?  The Legislature is already grappling with this problem, and answers are hard to come by.

The second issue regards caregiving.  Most caregivers will be family members because there will be a shortage of professional caregivers and most families won’t be able to afford their cost.   Many of you reading this are or have been caregivers.  You know that caregiving is tough!  It changes your life, let alone that of the person receiving the care.

It’s likely that Governor Newsom will bring a new sense of purpose to Sacramento and propose new solutions to aging and caregiving in California.  Goodness knows we need new caregiving solutions right away.  We now have a patchwork of many public and private agencies providing caregiving to various segments of our population, who often don’t know of or understand the programs that are available.  There’s a possibility that the Governor will appoint one person to try to simplify and consolidate these programs.

The most comprehensive study on caregiving I know of is “Beyond Dollars” by Genworth Financial, which researched some 1,200 caregivers, care recipients and family members in 2018.  The big takeaway is that caregiving takes a significant toll on the financial, physical and emotional lives of the families and friends of every care recipient.  No surprise here, but look at some of the statistical conclusions:

*60% of caregivers had to cut back on luxury expenditures;

*41% of caregivers had depression and feelings of resentment;

*53% had a high level of stress;

*46% believe their health and well-being was negatively affected;

*52% did not feel qualified to provide physical care;

*48% had to reduce their quality of living;

*70% missed time from work;

*30% missed career opportunities;

*50% have less time for their spouse, children and themselves;

*63% had to pay for care with their own savings/investments;

*Family caregivers spent an average of 21 hours/week on caregiving;

*Family caregivers spent an average of $10,423/year in out-of-pocket expenses.

One can see from these numbers what a devastating impact a sick family member can have on the entire family. Those of us who are long-term care insurance specialists are well aware of what these numbers mean.  We listen to many caregiving scenarios from clients which verify these statistics.  We also listen to scenarios where prospects have waited too long to get covered and have become sick.

“People don’t plan to fail, they fail to plan.”  What about your clients?  Have you advised them of the need?  There are now a variety of products which provide long-term care solutions.  Are you sufficiently educated on the various new options now available?  Do your clients have a robust long-term care plan with inflation protection in place?  Have you fulfilled your fiduciary duty?

Louis H. Brownstone, a member of the 2019 Cal Broker editorial advisory board, is chairman of California Long Term Care Insurance Services, Inc., located in Burlingame, California.  California Long Term Care is the largest independent specialist long term care insurance agency in California, and is broker for a group of high-producing long term care specialist agents. Brownstone is also very active in NAIFA, the National Association of Insurance and Financial.