Valuing the Invaluable: 2006 Economic Value of Family Caregiving is $350 Billion

Source: AARP.org |  | June 22, 2007

Every day, millions of Americans provide unpaid help to adult family members and friends (usually parents or grandparents) who can no longer bathe themselves, prepare meals, or do other daily tasks that most of us take for granted. The AARP study, Valuing the Invaluable: A New Look at the Economic Value of Family Caregiving, found that the contributions of family caregivers often go unnoticed, but in fact, their contributions are the backbone of the nation’s long-term care system with an estimated economic value of $350 billion in 2006.

By comparison, $350 billion dollars is:

• As much as the total spending for the Medicare program ($342 billion in 2005).
• More than the total spending for Medicaid, including both medical and long-term care services ($300 billion in 2005).
• More than the amount of the U.S. budget deficit ($248 billion in FY 2006).

In every state, the value of family caregiving exceeds Medicaid spending for long-term care by a large margin, ranging from 1½ to 10 times as large.

Family caregivers play a vital role in providing care to adults living with serious illnesses, chronic conditions, and disabilities. They help delay or prevent the use of costly nursing home care and reduce pressure on both Medicaid and Medicare budgets.

The unpaid services family caregivers provide are not without costs to the caregivers and society. Lost time at work, lost benefits, and declining health can add to the emotional and physical strain of actually caring for a loved one. The study underscores the need to better support family caregivers through programs that provide respite (a break from caring), tax credits, information, and other supports.

Adequate funding for the National Family Caregiver Support Program and the Lifespan Respite Care Act costs a fraction of the value of unpaid caregivers’ contributions and will provide an excellent return on investment.

AARP provides resources and information about the range of long-term care services and financing methods available. It is important that families talk, in advance of a crisis, about the kinds of care they would like to receive. Caregivers can also visit the “Caregiving” area for resources. If people understand their choices and start planning for their future, they have a greater chance of maintaining their independence as they age. Planning for long-term care is an essential step in creating a sound retirement plan.

AARP supports and promotes “family friendly” workplace policies such as flex-time and telecommuting. The AARP Best Employers for Workers Over 50 recognizes companies and organizations for their best practices and policies for valuing mature workers, including those who provide flexible work arrangements that accommodate the schedules of their employees and their families. Flexible work arrangements help workers to balance both work and family obligations.