Thursday, April 5, 2012

Bolstering Long-term Care

Photo by walkingphotolife
Over the next two decades, the population of older adults will increase dramatically.  The number of Americans 65 plus will grow from 49 million in 2010 to 71 million in 2030. If the level of long-term care use remains constant by today’s rate, 20% of these 71 million older adults will live in a nursing home for at least a year, and 5% will spend at least five years in one.  

Many proposals have been forwarded as a means to bolster long-term care:

·         Develop or expand public programs aimed at supporting family caregivers, such as the National Family Caregiver Support Program, funded by The Older Americans Act.

·         Make long-term care insurance premiums tax deductible as a way to encourage higher rates of participation.

·         Make reverse asset mortgages more widely available.

·         Find a way to make the CLASS Act viable, the proposed federal long-term care insurance that is currently in legislative limbo.

·         Amply home health care services as a less expensive way to deliver care for those who can postpone moving to a skilled nursing facility, such as magnifying meal delivery and transportation services as part of the Older American Act and expanding home health care services through Medicare. The Family Caregiver Alliance observes the following: “Average expenses per older adult in a skilled nursing facility can be four times greater than average expenditures for that individual receiving paid care in the community."

·         Increase the amount of time Medicare beneficiaries can remain in skilled nursing facilities.

Not only are the aging Baby Boomers a large cohort; they are achieving great longevity.  The number of those 85+ is expected to increase from 5 million in 2005 to 19.4 million by 2050.  As this large cohort moves into their eighties, they will develop more chronic disease and require more assistance with activities of daily living and instrumental activities of daily living. The advanced age of residents in skilled nursing facilities demonstrates the correlation between attaining the highest ages and the need for long-term care.  In 1999, 13% of residents in skilled nursing facilities were 65 to 74; 35% were 75 to 84; and 52% were 85 plus. 

With the annual cost of a private room in a nursing facility averaging $75,190 in 2010 and rising, the financial impact of growing long-term care needs is daunting.  The high cost of long-term care coupled with the longevity of the Baby Boomers leads experts to project that long-term care expenditures will almost exactly triple “from 115 billion in 1997 to $346 billion (adjusted for inflation) annually in 2040."
Currently, paying for long-term care comes from a variety of sources: family caregivers; out-of-pocket expenses paid by income, savings or other personal wealth; long-term care insurance for those who can afford it; minimally by Medicare; and most dramatically from Medicaid.   The following percentages show funding sources for nursing home and residential care facilities in 2005 by decreasing percentages: 43% Medicaid, 24% resident out-of-pocket, 14% Medicare, 8% Veterans Administration, National Institutes of Health & Bureau of Indian Affairs combined, 6% private insurance, and 5% other.
Before participating in the Medicaid, most Americans perceive it as a program for the financially destitute when the facts show that many older adults—including a significant portion of middle class Americans--move to Medicaid during their last years of life when other means for paying for long-term care are exhausted.

The transition from Medicare to Medicaid can be chaotic, emotionally taxing, and financially devastating.   The Nurses Learning Network delineates the many stressors that ill people must manage, and moving from Medicare to Medicaid only complicates a devastating loss of well being. 
Over the last twenty years, US health care has expanded the services between independent living and residency in skilled nursing facilities.  With the advent of aging in place, home health care and assisted living, there are more gradual degrees of care.   Some of the proposed changes in the Affordable Care Act do seek to expand custodial care under the Medicaid side, but changes that expand long-term care services on the Medicare side might help ease the psychological strain of enrolling in Medicaid and through co-pays may allow even a little relief to the federal governments budgets.  Hopefully, changing policies can help make the rocky road of declining health a little smoother.


Long-term Care Is More Probable as We Age


  1. Great research here on the truth behind Medicaid, which often get masked in the constant arguments over health care, and the ACA in particular; I knew the general facts, but didn't know the numbers, which are eye-opening. Medicaid is too easily stigmatized as a stop-gap for working adults who, presumably due to their own poor choices, lack economic resources; the truth that custodial and long-term care have become so prevalent and so expensive that Medicare and other programs, to say nothing of savings and personal insurance, get exhausted, with the result that nearly half of all cases end up having to make use of Medicaid, is a reality too many reformers and reform's critics ignore. Your point about the psychological (and financial) costs of splitting the costs between several programs, and of moving the bulk of one's care from Medicare or some other arrangement to Medicaid, is fascinating. It adds another argument to those of us who strongly believe that a less divided, more streamlined, single-payer-type-system makes more sense.

  2. Thanks for reading and commenting. This topic is very sobering. There is no way that people aged 65 today would expect to live in their 90s and expect that healthcare would be so astronomical. Most of the costliest tests and treatments were not even developed when the boomers first set up their retirement plans. When they were settling into their chosen professions at 25 years old, it was 1972. Last week I watched a Frontline report )via Netflix DVD) about pensions vs 401Ks, and most people only have 8 years of funds to keep them at middle class incomes -- even when following guidelines for contributions with their company's matching funds. (But that's another topic.)

    Today, people are generally living into their 60s and 70s with good health, but then they are declining into higher age brackets and more slowly. Consequently, they outlive their retirement savings and spend all their assets and many transition into Medicaid in their last 5 years of life in an attempt to manage multiple chronic diseases that would have killed their grandparents decades earlier and through a shorter, acute illness.

    If this is the dominate pattern, and if we don't want a Logan's Run solution for those 80+, we'll have to restructure retirement savings, federal programs, and health care. Already, the average retirement age is increasing because boomers recognize they can't afford to retire. But not everyone has the skill set or the health to work into their mid to late 70s.

    We can yackity yack about this ad nauseum, but the fact of high medical expenses for the large cohort of aging boomers is going to slap us upside the head -- ready or not. I don't have great solutions, but after studying this in my gerontology program, I do have a more vivid understanding of the problem.