Long term care includes a range of services for people who have functional limitations or chronic health conditions. Their needs include sub-acute care, personal assistance, habitation, rehabilitative, medical, skilled nursing and supportive social services. Long term care services are provided in a variety of settings, including nursing or assisted living facilities, respite care, adult day care, and home and community-based settings.
One reason the demand for long term care has increased is because people are living longer than they ever have before. Also, families are geographically scattered; employment opportunities or educational choices, among other things, have spread families from coast to coast. Time, distance and other responsibilities make it nearly impossible to provide the care older family members need. Another reason is that the primary caregivers in most families are women, and today more women work outside the home.
The elderly population is growing fast and, with the baby boom generation aging, nursing home populations will increase exponentially over the next 15 to 20 years. The fastest growing segment of our population is those over age 85. One out of every four in that age group lives in a nursing home.
Who Needs Long Term Care?
In addition to the elderly, long term care services are utilized by people with a wide variety of physical, cognitive, and behavioral limitations. For example, individuals with Alzheimer's and Multiple Sclerosis are prime users of long term care services. Americans spend almost $100 billion a year on Alzheimer's disease, with the cost of care paid for by individual families. There is also nationwide need for appropriate long term care services to assist people with mental retardation and developmental disabilities to become as independent and productive as possible in their home communities.
Who Pays for Long Term Care?
Two out of three nursing home residents - or 69 percent - rely on the Medicaid program to pay for their care. Medicaid is a program originally designed to meet low income people's health care needs. Only about 7 percent rely on Medicare, and the remaining 24 percent pay through private funding sources. Long term care insurance pays for only 3 percent of the nation's nursing home care costs.
Most Americans assume Medicare will pay for the cost of their long term care. However, Medicare will pay only for the first 20 days of nursing home care and only under certain conditions. On the 21st through 100th day of their nursing home stay, Medicare patients must pay the first $96 per day of costs incurred for their care. After the 100th day, patients must turn to Medicaid or their own resources to pay for their care. Medicare generally only pays for the elderly's doctor visits, emergencies and short term illnesses, not for long term care.
While originally intended to meet the health care needs of low income people, Medicaid became America's long term care system by default because the nation lacks any comprehensive long term care financing policy. Many elderly middle-class citizens and people with disabilities must rely on Medicaid to pay for long term care because they have exhausted virtually all of their life savings and assets to pay for their care. Most spend down their assets within one year of being admitted to a nursing home. Only after spending down their assets to the point where they cross the poverty line are people eligible for government assistance in the form of Medicaid. For younger people with disabilities the problem is more immediate. They cannot acquire assets if they must depend on Medicaid to finance their care.
With the number of people accessing long term care services increasing as society ages, the financial strain put on the Medicaid system requires we act now to develop and implement a system that utilizes private and public financing mechanisms to meet long term care obligations.
- Americans are more concerned about financing long term care (69 percent) than about paying for retirement (59 percent). (National Council on Aging, 1996)
- Seventy three percent of Americans incorrectly think that Medicare is the primary funding source for long term care. (Gallup Organization Inc., Public Attitudes on Long Term Care: The EBRI Poll. August, 1993; 15.)
- Less than three percent of all nursing facility costs are currently paid by long term care insurance plans. (Health Care Finance Administration, Health Care Financing Review. Summer, 1995: Vol. 16, Number 4.)