By Lisa Rapaport

As the U.S. population ages, the total annual cost of lost wages for unpaid family caregiving is on track to more than double, to reach $147 billion by 2050, a recent study suggests.

The current economic cost of unpaid family care is about $67 billion and includes reduced work hours and foregone earnings for Americans 20 to 64 years old who take time off from their jobs to help a loved one manage serious medical issues. This is based on population demographics and wage data from 2013.

This total economic cost is expected to surge as more elderly people need care, fewer family members are available to provide this care, and relatives who step in to help are increasingly higher-educated individuals with higher paying jobs, according to the study in Health Affairs.

“The number of potential caregivers per each disabled older adult will decline in the coming decades,” said Stipica Mudrazija, author of the study and a researcher at the Income and Benefits Policy Center at the Urban Institute in Washington, D.C.

“As a consequence, fewer families will be able to select as a caregiver a person with relatively low earnings potential,” Mudrazija said by email. “An increasing share of families will have to rely on family caregivers that can earn more on the labor market than family caregivers can earn today.”

As of 2013, the estimated cost per caregiver of wages lost to family caregiving was $5,251 a year, a figure that will surge as high as $6,323 by 2050, the study calculates.

The annual cost for each care recipient, meanwhile, will rise from $6,898 to $8,307, according to the calculations.

There are several limitations to these estimates. The biggest one is that the calculations assume no change in unmet care needs during the study and a constant preference for informal caregiving, Mudrazija writes.

The calculations also assume that the relative prices of unpaid family care and paid caregiving would remain fairly constant.

Another drawback is that the calculations didn’t account for the complexity of care provided by unpaid family caregivers, which could impact how many hours people miss work, said Barbara Given, a researcher at the College of Nursing at Michigan State University in East Lansing.

“Since hospitals are doing more and more procedures and care outpatient, the recovery care and follow-up care is done by family members rather than the formal care system,” Given, who wasn’t involved in the study, said by email. “Hospital stays are shorter and shorter, and major surgical procedures are being done outpatient, thus family members are doing the postoperative care.”

One of the biggest financial traps families fall into when it comes to unpaid caregiving is failing to understand that Medicare doesn’t pay for long-term care at home or in assisted living or nursing facilities, said Carol Levine, former Director of the Families and Health Care Project for the United Hospital Fund in New York City.

People should start a regular savings plan that can be an emergency fund to use when there’s a sudden or unexpected need for care at home, Levine said. And, people should also explore unpaid family leave options if it will allow them temporary flexibility to help care for a loved one without leaving the workforce altogether.

“Don’t quit your job if you assume a caregiving role – at least not at the outset,” Levine, who wasn’t involved in the study, said by email.

“Beyond the income, working provides a purpose in life, collegiality, and benefits beyond the company package,” Levine said. “Once you’ve left the workforce, it’s hard to get back in at the same level and with the same income.”

SOURCE: Health Affairs, online June 3, 2019.