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Long-Term Care: Studies Show Women Face Potentially Greater Financial Risk

By J. Robert Clement, Vice-President, MedAmerica
July 17, 2000

This article is one of a series written by experts in the fields of insurance and employee benefits. Long-Term Care is fast becoming a major issue in our nation today due to the aging of our population. The United States Conference of Mayors launched its Long-Term Care Program this year and it is now available to all cities and their employees.

Long-Term Care is an issue of concern to people of all ages. Much of the focus up to now has been on the "baby boomer" generation's need to understand and be better prepared for long-term care later in life. This article describes the special needs women of the "baby boomer" generation have for long-term care.

Almost half of the population turning age 65 will need formal nursing home confinement of some duration in their remaining years according to the Health Insurance Association of America. And, roughly one-fourth of the population over age 85 are in nursing homes at any given time.

It should come as no surprise that the preponderance of nursing home residents is single, elderly women. A study conducted by the Medicaid department of the State of New York, and corroborated by other studies reveals the following:

  • Eighty percent of nursing home admissions are women

  • The average admission age of these women is 82

  •   At that advanced age, most of these women are single

  •   Compared to men, women are confined 50 percent longer

For years, women have served as the traditional, primary caregivers of long-term health care. Today, they are likely to provide care at home to immediate or extended family as the caregiver 'sandwiched' between caring for their children and their parents. Coupled with this, more than ever before, many of these mothers and daughters are working outside the home. The emotional stress and anguish caused by the demands of caring for their families can have devastating effects not just on their emotional health, but also on their financial well-being and productivity.

A national study conducted by the American Association of Retired Persons (AARP) found that 80 percent of working caregivers reported emotional strain, 50 percent reported financial strain, and 40 percent missed work on a regular basis due to the health needs of an elderly loved one.1

A recent survey commissioned by the American Health Care Association found:

  • "Forty-one percent of women interviewed who had been caretakers had been forced to quit their jobs or take a leave of absence. Fifty percent said they had to cut back their working hours and give up space in their own homes to accommodate loved ones needing care."2 "Women bear both financial and emotional burdens," said Linda Keegan, a spokesperson for the American Health Care Association (AHCA).

  • On the average, men baby boomers save one-third more for their retirement than do women.

  • More than one-third of all women expects to be a caregiver for a family member. Forty-eight percent expect to provide care for their husband and 86 percent -almost twice as many- expects to provide care for a parent or in-law.

Financial Challenges

Women live longer, typically earn less than men, save less for their retirement, receive lower Social Security payments, and often find themselves as the primary caregiver for an ill or aging family member. All too often, women deplete their retirement savings and assets to pay for their ailing husband's long-term care needs, leaving little or nothing for themselves.

As more women are employed full-time, it becomes more difficult for them to fill the requirements of caring for aging parents and relatives. Forty-six percent said they were forced to hire nursing care to help with the tasks. "The prospect of having to provide care to aging relatives and spouses can be a huge emotional drain as well as a financial hardship," noted Keegan.

In order to retain and successfully manage their assets, women should recognize the potential need for their own long-term care and include coverage for long-term care expenses in their financial planning.

The average woman can expect to live as much as seven years longer than her male counterpart. Women are therefore more likely to develop the functional ailments that require long-term care services ranging from help with the Activities of Daily Living (ADL) to sophisticated therapy such as stroke rehabilitation.3 It is estimated that the majority of women, compared to 33 percent of men, reaching the age of 65 will need nursing home care later in life. Therefore, long term care, especially facility care, is of special significance to women.

Female Boomers

Financially, the baby boom generation is the first in history to include a disproportionate number of single women, many of whom face serious risks. A recent study by the National Center of Women and Retirement Research (1998) found that baby boomers, and women in particular, are largely unprepared for the financial costs they will face upon retirement.4

Female boomers are very concerned about saving enough for retirement and long-term care. Only 27 percent of the women surveyed have accumulated more than $100,000 in their 401(k) retirement plans. Thirty-three percent reported having less than $25,000 in their retirement portfolios.5 Yet as studies indicate, women of the baby boom generation will be the largest group ever to remain single or get divorced—a group that will average less then $20,000 in retirement savings.6

The need for a woman to plan early is obvious:

  • Three out of four nursing facility residents are women. (Health Care Financing Administration);

  • Nearly half of all female nursing facility residents rely on Medicaid for their long- term care services (Health Care Financing Administration);

  • Of the elderly poor, nearly 75 percent are women (U.S. Department of Labor); and

  • The median amount that women have set aside for retirement is $20,000, an amount that would cover less than one year of nursing facility costs ($51,000 average).

Women must take responsibility to protect themselves against the potentially devastating costs of long-term care. The odds of needing this type of care are just too high to ignore.

The United States Conference of Mayors Long-Term Care Program is designed for municipal employees and is dedicated to providing the best long-term care coverage at a reasonable price. For more information about The United States Conference of Mayors Long-Term Care Program, call Lilla Hammond at the Conference: 1-888-828-8763. Send e-mail to: Website:


1 American Association of Retired Persons, 1997.
2 Survey finds boomers headed for financial disaster in golden years, American Health Care Association, (April 1999)
3 U.S. Census Bureau
4 Scudder Kemper Investments, Scudder Kemper Baby Boom Generation Poll. 1998
5 Ibid.
6 Ibid.

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