The cost of senior care: Why aging farmers fear the nursing home

RUGBY, N.D. — Cindie Haakenson was relieved when a room opened up at the Heart of America long-term care center this past spring.

Her 74-year-old husband, Sherwood, had been suffering from multiple fainting episodes in recent months due to issues with his heart and kidney. Finally, he could receive the 24-hour supervision he desperately needed.

But soon a new anxiety crept in: how to afford it.

“We’ve got enough tucked away to keep him for about a year. After that, I’m not sure,” Cindie said. “We’ve got farmland that we own we could sell, but it’s like giving away part of your legacy.”

The Haakensons own about 2,600 acres in North Dakota's Willow City area. Most of the small cattle and wheat farm has been in Sherwood’s family for over 130 years. It survived brutal winters and the farm crisis of the 1980s. Now, the couple confronted a situation many aging family farmers fear: being forced to sell or break up the farm to pay for long-term care.

It was a gut-wrenching position to be in, but woefully familiar. Years earlier, Cindie watched as her parents’ health issues nearly cost them their farm.

“I’ve known forever that this is the way it is,” Cindie said. “And you just kind of hope that you don’t have to face it in the future.”

A third of Americans 65 and older will need a year of nursing home care in their lifetime, according to the Department of Health and Human Services. A semiprivate room today can cost some $8,700 per month — and it’s generally not covered by Medicare. Long-term care insurance exists, but it's deeply unpopular with older Americans. So, many seniors dip into their retirement or savings to get the care they need, while others apply for Medicaid, which has its own challenges.

The choices are especially daunting for small farmers, according to Robert Moore, an attorney and researcher at Ohio State University’s Agricultural & Resource Law Program.

“I tell farmers all the time: There are no easy solutions to long-term care planning,” he said.

Moore called long-term care needs one of the biggest threats today to small family farms. He said farmers go to great lengths and years of planning to protect their land in their golden years. But with soaring costs and an aging boomer population, he expects the problem to only grow.

Leaving the farm isn't easy, even when long-term care becomes a necessity

Sherwood’s health took a turn for the worse in October, when he collapsed at home and was airlifted from the local hospital to an emergency room in Fargo, N.D., some 200 miles away. Over the course of four months, he was taken to the ER six times, according to Cindie.

Each time felt like a close call. It’s not easy for EMT crews to find the couple’s home — especially at night. It was also impossible for Cindie, who’s a foot shorter than her husband, to try to lug him to the hospital herself.

In March, it was clear Sherwood needed to be closer to medical care in the likelihood he fainted again.

Although the nursing home was just a 20-minute drive from their home, it was hard for him to settle in. The Haakensons never did well far from home. They preferred the quiet, and although they had traveled across the country, their favorite views came from their family room window.

Sherwood had lived and worked at his farm for the past five decades. It was the ground his great-great-grandfather homesteaded.

“In June of 1890, that’s when they got their first land up there by Willow City. And I still have it,” Sherwood said back in April. 

His family was among hundreds of Norwegian immigrants who helped shape Willow City. By the time he was born, the town had nearly 600 residents. Now, it's just shy of 150 people and the grocery store, the high school, and two bars he once enjoyed are all closed.

“Everyone says it’s a dying little community,” he said.

Why long-term care costs are a threat to farmers

Small family farmers are often “land rich, cash poor,” meaning their assets are tied up in their farm and equipment, according to Moore from Ohio State University.

“Most farmers live very frugally,” he said. “They don't have living expenses of $100,000 a year. So when they get a $100,000 bill from the nursing home every year, that's just not in their budget.”

There are about 1.9 million farms in the United States — 40% of which are owned by farmers 65 and older. Despite a trend of consolidation, as of 2022, about three-quarters of farms earned $50,000 or less in sales a year, according to the Department of Agriculture.

The average farmer can afford a year or two of long-term care by using their savings, or by selling their crops, livestock and machinery, Moore added. The situation can become dire when an aging farmer needs more than the average three years of care.

"What may keep farmers up at night is the possibility that they can be in a nursing home for many years and use up available resources and jeopardize the family farm operation for themselves and future generations," Moore said.

The Haakensons sold their tools and machinery years ago. The only significant thing left to sell, according to Cindie, was their Chevy pickup truck, which would have helped pay for two months of care.

Ray German, the lead attorney at German Law in Grand Forks, N.D., said that in his experience, farmers with land that’s worth less than $1 million are at the greatest risk of losing their entire farm over long-term care costs.

“They are very concerned they could lose the whole farm. They could lose everything,” German said.

Medicaid is far from a solution

Long-term care insurance is rife with its own problems, from complex underwriting to rising premiums. German, who has worked with thousands of older farmers to help preserve their estates in North Dakota and Minnesota, said only a tiny fraction of his clients use it.

“It's expensive, and many times, you've got to jump through so many hoops depending on the policy,” he said.

Short-term care policies are a newer alternative to long-term care insurance, said Lance Boyer, a sales director at Farmers Union Insurance in North Dakota. But their benefits usually last no more than a year.

“They are really affordable and underwriting is pretty simple,” he said. But “it's yet to be determined how impactful they are in the market because they’re still so new.”

Another option is Medicaid, which is the largest single payer for long-term care in the U.S. In North Dakota, while the program completely covers nursing home costs, enrollees can only have a few thousand dollars to their name. They can keep some additional cash and their home and car if it's in their spouse's name, but generally no other property. That’s especially troubling for farmers, whose livelihood and families are often intertwined with their land.

“Owning farmland, particularly that's been in the family for generations, is very different than owning a stock portfolio that may need to be liquidated,” Moore said. “There's usually family heritage involved, and continuing that legacy is really important for a lot of farmers.”

One way farmers work around the Medicaid restrictions is to transfer their farm into an irrevocable trust and name their children as beneficiaries.

Even if farmers qualify for Medicaid, it can still take five years before Medicaid will pay for long-term care. That’s because in most states, Medicaid looks to see if any improper financial transactions were made in the five years leading up to seeking assistance. The requirement is called a “look-back period.”

Cindie made arrangements to transfer their farmland to their son and daughter three years ago. At the time, she thought she was being proactive — believing that she would be the one needing long-term care in the future. But because the Haakensons were within Medicaid’s five-year look-back period, they were unable to receive government assistance for Sherwood’s care.

A grim stroke of fate lets them keep the farm in the family, for now

Boyer of Farmers Union Insurance added that Medicaid should not be the end-all-be-all and there should be better solutions for aging farmers facing high long-term care costs.

Farming is not easy or predictable, he said. Overnight, a hailstorm can destroy months of labor invested in a crop. But farmers work the land anyway.

“They work their whole life, they pay their own bills,” he said. “Then, all of sudden, when they need the most help to get to the finish line, they literally have to wipe out everything they’ve accumulated in life to get that help.”

On June 17, Sherwood died in his room at the long-term care center.

Friends near and far, both old and new, attended his service. Weeks later, Cindie said fellow farmers continued to reach out to give their condolences and share stories about her husband — many of which were new to her.

“I've said it this way: He’s cut a wide swath over his years,” Cindie said in July.

It was strange for her to talk about Sherwood without also worrying about him. For the better part of the last decade, Cindie’s life centered around being her husband’s caretaker and, more recently, protecting their farm. She felt some peace knowing she had done her part. But a little anxiety remained.

“If I can stay healthy for two years, the land is safe,” she said.

This story was supported by the Pulitzer Center on Crisis Reporting.