Rescue Plan Help for Family Caregivers Is a First Step


(The RAND Blog)

Elderly Asian woman on wheelchair at home with daughter taking care of her, photo by Toa55/Getty Images

Photo by Toa55/Getty Images

by Alexandra Drane, Molly Coye, Esther M. Friedman

April 5, 2021

The American Rescue Plan Act (PDF), the $1.9 trillion relief bill signed by President Joe Biden March 11, offers aid to millions of family caregivers—those who take care of a parent, disabled child, chronically ill partner, even a neighbor or friend. For the first time, the COVID-19–relief payments will be higher for those with adult-age tax dependents. Tax credits for COVID-19–related paid family leave have been extended and now allow for longer absences. Grant money has been set aside to address the well-being of grandfamilies and kinship families, including caregivers.

These add up to a significant acknowledgement that caregivers to family members of all kinds—not solely parents caring for healthy children—need support.

The pool of family and friends providing unpaid care to loved ones with disabling conditions is large and growing. In 2015, it was estimated by NAC and AARP (PDF) that about 40 million caregivers were providing unpaid help in the United States. That number is now more than 50 million. In 2020, these individuals were doing 23.7 hours of caregiving per week on average. Valued at $14.58 per hour (the 2020 caregiver wage), that's $950 billion in annual economic value provided by caregivers. Even this number is likely an underestimate during the COVID-19 pandemic.

In 2015, it was estimated that about 40 million caregivers were providing unpaid help in the United States. That number is now more than 50 million.

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These typically unpaid caregivers have been in desperate need of economic relief for a year. The disruptions from COVID-19 on our fragile systems of care meant that some cut back on paid work hours or quit jobs to provide care. The relief payments and other economic supports (ACA subsidies, unemployment insurance, mortgage forbearance) can offset some of that financial burden.

But if we consider the expenses incurred by caregivers—from out-of-pocket payments for health care and services to reductions of income—the payments in the American Rescue Plan Act won't go terribly far. Annually, caregivers spend $7,400 to $12,700 out of pocket on average providing care to a loved one. Of that, 41 percent is spent on household expenses and 25 percent on medical costs. The stimulus checks are $1,400 per qualified person in households earning under $150,000 a year.

Other costs associated with caregiving are indirect, and ripple outward. The emotional strain of caregiving leads to increased absenteeism or presenteeism at work, harm to career advancement, and the associated lost wages and benefits. Workers with caregiving responsibilities cost their employers 8 percent more in health care costs (PDF) than those without such responsibilities—an estimated $13.4 billion per year.

Pre-pandemic, the BCBS Health Index found that unpaid caregivers had worse physical and mental health than the general population. Four months into the pandemic, the situation was dire: By late June, U.S. Department of Health and Human Services data was showing that 45 percent of unpaid adult caregivers reported signs of depression (compared with 17 percent of non-caregivers). More than 30 percent said they'd had suicidal thoughts (compared with 3.6 percent of non-caregivers).

This emotional and physical toll suggests that many caregivers are desperate for help. Employers can provide some aid by assisting with applications for services they may need, creating opportunities for flexible work hours and time off, and organizing respite programs.

Many caregivers, however, are forced out of the paid workforce. That means only national and state policies can protect this precarious group over the longer term. For example, protected and paid leave from work could keep caregivers attached to their jobs. Tax credits for unpaid caregivers who need to leave work could provide financial relief.

Growing and supporting the professional home health care workforce is vital.

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Growing and supporting the professional home health care workforce is also vital. Well-documented workforce shortages mean that even for those who want and can afford in-home care, there's no one available to hire.

Unpaid caregivers have been a critical part of the functioning economy, serving as the backbone of the health system, since long before the pandemic started. Adding them to the American Rescue Plan was an important step—but even after the pandemic is over, the financial security of these vital caregivers will need long-term protection.

Alexandra Drane is cofounder and CEO of ARCHANGELS and cofounded Eliza Corporation, Engage with Grace, and three other boot-strapped companies. Molly Coye is cofounder of HealthTech4Medicaid and former state health officer for New Jersey and California. Esther M. Friedman is a behavioral and social scientist and director of the Caregiving Initiative at the nonprofit, nonpartisan RAND Corporation.

Commentary gives RAND researchers a platform to convey insights based on their professional expertise and often on their peer-reviewed research and analysis.