The “Shadow Caregiving System”

The US is experiencing “demographic aging.” In less than two decades, the graying of America will be inescapable: Older adults are projected to outnumber children for the first time in U.S. history.1 What I refer to as the “Shadow Caregiving System” is complex and comprised of multifaceted relationships, including:

  • Heterosexual and Same Sex Couples
  • Committed but Not Legally Married
  • Long-term Marriages
  • Short-term or Multiple Marriages
  • International Marriages
  • Single Income and Dual Income
  • Children, No Children, and Step-children
  • Solo-agers

In an aging society, the “Shadow Caregiving System” is quickly growing into a “Shadow Caregiving Economy” with long lasting individual and national economic implications.

Who participates in the “Shadow Caregiving System,” or more precisely asked, who doesn’t? A Merrill, Bank of America Company study conducted in partnership with Age Wave, The journey of caregiving: Honor, responsibility and financial complexity, refers to family caregiving as America’s other social security, noting that family members provide more than 95 percent of non-professional care for older adults who do not live in nursing homes.2 No matter how you define family, the “Shadow Caregiving System” is rapidly becoming an all-inclusive club.

The life of a caregiver is a juggling act. It is a unique journey with ups and downs that are both unpredictable and personal. There is a steep and destabilizing learning curve. Caregivers act as information coordinators who must devote time and energy in order to understand the confusing maze of medical and financial complications that develop or change. More than 75 percent of caregivers report substantial out-of-pocket costs associated with caregiving. Paying for care recipients’ household expenses (rent/mortgage, food, home modifications) accounts for about half of these costs; providing support for medical costs (such as medications) accounts for an additional one-fifth.3 Caregivers may also be quietly spending their own money in caring or providing care for someone. According to the AgewaveCaregivingWhitepaper,4 52 percent of caregivers have no idea about the total amount that they have spent to date on caregiving related expenses, including home care, transportation, paying bills, everyday household expenses and even costly medical treatments.

More than 16 million Americans provide care to a person with Alzheimer’s disease or other dementias. Caring for a person with Alzheimer’s disease is not only physically taxing but also emotionally draining. These caregivers provide more hours of care per week and, in many cases, support their care recipient for a longer period of time. They are also more likely to perform medical tasks in addition to running errands, managing finances and, most importantly, keeping their loved one safe and secure. Because of the progressive nature of the disease, Alzheimer’s patients are likely to move through many different levels of care over several years. The caregiver is often challenged with many difficult decisions.5

There are now four generations at the workplace who participate in the “Shadow Caregiving System.” According to the US Bureau of Labor Statistics,6 by 2031 the majority of the workforce will be comprised of the Millennial (1981-1996) and Gen Z (1997-2013) generations. According to a recent Kiplinger article, millennials are just as worried about their parents’ financial security and about 68 percent of them worry that their parents may not have enough money to live comfortably during retirement. On top of that, 61 percent of millennials polled for this study actually went beyond that to worry that their parents would have to become financially dependent on them instead. Along with GenXers, they are increasingly becoming the caregivers of today and tomorrow.

Looking out to the future, the “Shadow Caregiving System” will rely heavily on fewer family caregivers which could also add to caregivers increased emotional and physical strain, competing demands of work and caregiving, as well as financial hardships. There was a decrease in the number of children Boomers had compared to previous generations. Long-distance caregiving and childlessness among the older population puts Boomers at risk of becoming “elder orphans.”7 For those who have the financial means to hire qualified caregivers, there still remains the chore of finding and monitoring qualified caregivers and handling a care recipient’s complex finances. Without a well thought out plan in place, even once the care recipient is deceased, caregiving can morph into settling their affairs which can be stressful, complicated, and time consuming.

The realities associated with the “Shadow Caregiving System” foretells of a burdensome economic crisis, one has to ask why aren’t more individuals and families planning for extended or long term care needs?

While the reasons are complex due to individual experience, circumstances, and generational attitudes, some general explanations seem to surface:

  • America’s youth oriented society contributes to the difficulty of discussing aging.
  • Industry challenges and bad press has left many with a narrow view of available options resulting in unfamiliarity with the wider array of current planning options.
  • The conversation can be a difficult one unless individuals and professionals know how to introduce the topic in a positive, organized way.
  • Professionals may not feel comfortable or capable of incorporating extended and long term care planning or referrals to specialists into their practice.
  • There is a lack of general public education about the need to plan for extended and long term care.
  • The public lacks valuable information about available research, products, and programs to help individuals, families, and professionals who are, or will be themselves, caregivers or care recipients.
  • The misconception that Medicare covers long term care or qualifying for Medicaid is the answer to planning for long term care.
  • The public is uneducated about the true cost of extended and long term care.

Funding the “Shadow Caregiving Economy”
Significantly states, in the absence of a federal program, are looking at the impact of current and increasing cost-of-care affecting both their residents and state Medicaid budgets. Currently various states, such as Washington, California, New York, Minnesota, etc., by way of legislation, studies, task forces, committees, and programs, are increasingly dealing with burgeoning long term care issues. Washington is the first state to enact a publicly funded long term care program. The Long-Term Services and Supports Trust Act was enacted in 2019 and created the WA Cares Fund, a long term care insurance benefit to help Washington employees cover the cost of long term services and support both during their careers and after they retire. The Trust Act also created the Long-Term Services and Supports Trust Commission, which works on behalf of Washingtonian employees and Long-Term Services & Supports stakeholders to improve, monitor, and implement the program. Workers began contributing to WA Cares Fund on July 1, 2023. All full-time, part-time, and temporary workers in Washington contribute .58 percent of all W-2 income to the WA Cares Fund unless they have an approved exemption or are in a class of employment that requires them to opt-in or excludes them from the program. After meeting both the care need and contribution requirements, residents can access a benefit of up to $36,500 (adjusted for inflation) to pay for care starting July 2026.

Hospital, nursing home, and care facility challenges, as well as staffing shortages, highlighted in news coverages during the COVID-19 pandemic seem to have only temporarily brought some of the realities and demands of providing for long term care to the attention of the public.

In a 2022 survey, Long-Term Care (LTC) Consumer Planning Study,7 OneAmerica collaborated with Hanover Research to engage with consumers to better understand consumer behavior and thoughts regarding long term care planning. Respondents were at least 40 years old, currently planning for the “retirement era” of their lives. Neither they nor any immediate family member works in the insurance industry.

According to the survey, consumers place the highest importance on finances when planning for their own and/or their family’s future. More specifically, they rate having enough to retire (86 percent), eliminating debt (74 percent), and creating liquid emergency funds (68 percent) as most important. Long term care planning (48 percent) is considered a relatively lesser priority.

On the other hand, consumers reported viewing long term care planning as serving multiple purposes, led by avoiding heavy burdens on family members. They cite avoiding devastation of one’s own finances (46 percent) and gaining peace of mind (45 percent) to nearly the same degree as avoiding undue burden on one’s family.

Wait, what? There seems to be a disconnect! While consumers place having enough to retire as their highest financial importance on planning for the future (86 percent), they also acknowledge that future long term care planning is important in order not to devastate those very same finances (46 percent).

Sadly, only a very few consumers seem to make the connection. The consumer study indicates that just under a third (29 percent) have researched long term care planning options, and even fewer (16 percent) have implemented a long term care plan. Despite more and more people in more and more generations becoming a caregiver, or having someone close to them become a caregiver, consumers indicate that the lack of certainty around the need for long term care (34 percent) still shows up as the third-most common barrier to planning for long term care.

This lack of planning is costing consumers plenty aside from the physical and psychological stress which impacts relationships and career advancement. According to AARP’s Valuing the Invaluable 2023 Update: Strengthening Supports for Family Caregivers, in 2021, the estimated economic value of family caregivers’ unpaid contributions was approximately $600 billion—up from the $470 billion estimated in 2017. This conservative estimate does not consider the financial cost of care (out-of-pocket and lost wages) or account for the complexity of care provided (i.e., medical/nursing tasks).

It would seem that now is the time to recognize an opportunity for anyone in the financial services industry to reach out to current and potential clients and offer guidance. However, a follow-up study released in June 2023, Long-Term Care (LTC) Financial Professional Planning Study,8 by OneAmerica in collaboration with Hanover Research, found that 46 percent of financial professionals don’t recommend or offer long term care to their clients, an additional 25 percent have recommended it in the past but are no longer doing so, and 21 percent said they never offered it.

If the top two reasons financial professionals sell LTCI are the same reasons clients purchase it—to ameliorate the impact of long term care costs of care on client’s finances and family—then why aren’t more LTCI or other funding options being put in place?

For consumers, according to the 2022 consumer study, barriers include the cost of LTCI itself (53 percent), the cost of medical and long term care-associated support (44 percent), and the slightly less-prominent competing financial priorities (25 percent). Not surprisingly, respondents found stable premiums (94 percent), tax-free benefits (92 percent), and unchanging benefits (90 percent) to be highly appealing. The ability to pass unused amounts to heirs (84 percent) also has widespread appeal. These features likely mitigate concerns about the likelihood of never requiring long term care and/or the desire to avoid undue burden on one’s family.

For financial professionals, the 2022 study found that two-thirds would be more likely to recommend LTCI with lower costs. When financial professionals look to insurance provider websites to stay up to date on LTCI products, they most often seek out information on price (75 percent), as well as the level (66 percent) and length (62 percent) of coverage.

According to the OneAmerica 2023 financial professionals study, tax-free benefits and non-increasing premiums are the most appealing features of asset-based long term care protection. In a recent column posted in LIMRA’s Industry Trends, Investors Becoming More Conservative Amid Concerns of Continued Equity Market Volatility, LIMRA’s research shows investors’ interest in annuities, regardless of the type, has increased over the past five years.

“Financial professionals who are familiar with asset-based long term care showed they understand how it can benefit their clients,” said Jeff Levin, vice president of distribution, Care Solutions, OneAmerica. “It’s part of a well-rounded approach to financial planning.”

The OneAmerica study of financial professionals also offers insights into an ideal long term care protection candidate. Experience with long term care remains a top motivator. Clients with incomes between $100K and $500K who are approaching the traditional retirement age between 55 and 64, those who experience a significant life event (silver divorce, self-selected solo agers, child’s college graduation, inheritance, etc.), or those without family who are able or available to provide care are top candidates.

Consumers are searching general web sites (38 percent), health care websites (29 percent), and insurance provider websites (26 percent). These results provide insight into the most ideal places to reach consumers as they attempt to educate themselves and plan for the future. Are you among the 54 percent of financial professionals who recommend/offer LTCI to clients? If not, now is the time to start!

For those who do not qualify/need additional insurance or annuities, or who have budget concerns, there are less rigorous underwriting and non-insurance funding options that may help consumers to plan. The world of options for extended and long term care planning is expanding with product innovation and updated versions of home equity loans, repositioning of life insurances, specialty products, expanding government and local support and services.

Start the conversation, start the planning. Consumers trust family members most when it comes to discussing long term care options. Financial professionals and consumers alike will benefit by approaching long term care planning as a generational issue with appropriate options for different ages, different budgets, and different needs.


  1., The U.S. Joins Other Countries With Large Aging Populations, Jonathan Vespa, March 13, 2018, revised SEPT. 6, 2018 AND OCT. 8, 2019* accessed July21, 2023.
  2. p.2 accessed July 21, 2023 Italics added.
  3. p.12 accessed July 22, 2023.
  4. p. 22 accessed July 21,2023.
  5. 4/caregiving%20article.pdf Caregiving in the age of longevity: A diversity and inclusion perspective, Cynthia L. Hutchins, February 2021, p.7, accessed July 21, 2023.
  7. Brittany Leitner, June 21,2023, p.

Carroll S. Golden, CLU, ChFC, LTCP, CASL, FLMI, CLTC, is the executive director of the NAIFA Limited and Extended Care Planning Center (LECP). She has an extensive background in business development, solutions selling, risk management and insurance distribution.

Golden has authored two books, her newest, How Not To Pull Your Family Apart, is designed for consumers to follow a multi-generational family as they use a three-step guide to gain a basic understanding of manageable extended or long term care planning options to discuss with a professional.