FEBRUARY 14, 1994 VOLUME 1, NUMBER 13
Coincidentally, the results of two different statistical studies crossed our desk this week. Because they seem to lead to opposite conclusions about the elderly, they are interesting and worth mentioning.
Everyone's Poorer--Except the Elderly
The first study, conducted by the government itself, focused on the net worth of American families. Disturbingly, the average net worth of all families declined by about $5,000 between studies conducted in 1988 and 1991.
That bad news is not as bad for the elderly. On average, families headed by an individual older than 65 had a net worth of $88,192. That figure is sixteen times the average net worth of families headed by an individual under age 35--the study pegged that figure at $5,565.
Of course, the older families have three decades (or more) of additional earnings to add to net worth. Not surprisingly, the largest jump in net worth showed up in the 45-55 age group. Still, this study seemed to paint a picture of relative financial strength and security. We were reminded of recent news stories about the tremendous accumulated wealth of the oldest generation, which is about to be transferred to the "baby-boom" generation over the next decade or two.
Nursing Home Costs Exhaust Estates
The second study arrived the next day. Conducted by Brown University researchers, it focused on how long elderly patients are able to pay privately for long-term nursing care. This study found that 8.6% of private pay nursing home patients become Medicaid patients within six months of admission. Nearly one-fifth (19%) run out of private funds within the first year.
Among patients first admitted to the nursing home under Medicare, the figures are even more striking. While 13.4% become Medicaid patients within six months, 52% run out of both Medicare coverage and private funds in the first year.
What accounts for the difference in the focus of these two studies? Of course, the average net worth of $88,192 is not all that much when costs of care exceed $30,000 per year, but Social Security and pension income, coupled with increasingly common long-term care insurance coverage, ought to be taking care of a larger segment of the population for a longer time. Perhaps the difference can be explained by the likelihood that a recent nursing home admittee has suffered through a debilitating and expensive illness for some time prior to admission.
And what about the difference between Medicare and private pay admissions? Are Medicare patients poorer? Are wealthy individuals moving into nursing homes before they really need to for medical reasons? Have Medicare patients been sicker for longer, thus exhausting their reserves prior to the first admission? We don't have the answers, but thought the questions (and the statistics) interesting enough to pass along.
Senate Bill 1103, now pending in the Arizona Legislature, would require all private fiduciaries to be licensed and regulated by the Supreme Court. As proposed, this legislation would affect any person (or corporation) who charges a fee to serve as guardian or conservator for persons not related to the fiduciary.
SB 1103 has already passed through the State Senate and is now being considered by the House. We will keep you updated on its progress.