Financial Management: The Next Area for Innovation… Leave a comment
With 10,000 people turning 65 every day in the U.S., Americans aged 65 and older now hold more than 27% of all U.S. wealth. It’s no wonder seniors are prime targets for scammers and swindlers. An expert at the University of Michigan estimates that “about 20% to 25% have mild cognitive impairment while about 10% have dementia.” For these seniors — nearly 20 million — the chore of accurately and promptly paying bills may be stressful and difficult to execute properly. Medicare Advantage (MA) plans, accountable care organizations, long-term care insurers, Medicaid home and community-based providers, and others with a financial interest in preserving the independence of seniors can benefit from assisting seniors in their financial tasks.
Effective personal financial management is necessary for preserving assets and maintaining independence. This is increasingly important as the cost of health care continues to increase. Even with Medicare, 20% of seniors pay more than $2,000 a year in out-of-pocket health care costs. As the nation’s senior population continues to grow, those who care for seniors can address fraud and cognitive impairment by investing in financial management services that extend independence for seniors by reliably paying their bills.
Studies show that financial management services can also lower health-related costs. In just one example, the Brookdale Center for Healthy Aging & Longevity analyzed the value and costs of daily money management programs (DMM). The research found DMM programs to be cost-effective in extending independent living and staving off expensive custodial care alternatives, such as nursing home placement. DMM/case management programs save an estimated $60,000 per individual compared with nursing home placement throughout the Medicare beneficiary’s lifetime. This is because individuals with DMM services remain in their homes and communities longer and maintain a higher quality of life.
Approximately 80% of people with Alzheimer’s disease and related dementias receive care in their homes from family or friend-of-family caregivers. In 2020, the financial management service, SilverBills, was selected to partner with AARP to conduct research studies that explored the mindset of caregivers for older adults with regard to financial management. Caregivers often experience extreme stress associated with managing the lives of their loved ones — 40-70% suffer from caregiver stress syndrome, according to one source. Caregiver stress syndrome is a condition characterized by physical, mental and emotional exhaustion, and it has a significant impact on the lives of those who take care of their loved ones. It can impact not only the long-term health and wellness of the caregiver but also the health and wellness of the patient. Financial management services can help address caregivers’ frustration with the overwhelming needs of their loved ones by providing an overlooked yet necessary benefit for the patients.
Helping seniors with their personal finances by paying their bills according to their wishes is a relatively new service. Evidence shows that these financial management services directly improve the health and well-being of seniors and their caregivers. Some financial management service companies have earned the patronage of local governments and prestigious funders, including the National Institutes of Health and AARP. It is time for health plans, particularly MA plans, to pay attention as well.
Photo: Olga Shumitskaya, Getty Images
