The Looming Crisis in Long-term Care
The looming crisis in long-term care is a problem no one seems to be talking about. The baby boomer generation is growing older, many are already reaching retirement and eligible for Medicare benefits.
Unfortunately, the US is way behind and unprepared for this nearing crisis. The growing population of aging boomers isn’t going to slow down – it’s only going to increase.
Which means, the government, healthcare, and families nationwide may suffer. Funds aren’t ready to provide healthcare to the Baby Boomers as they become Medicare eligible.
Caring for this growing group of individuals is a crisis-in-training. We – not our government programs, families, loved ones, nor healthcare are ready for the looming crisis in long-term care.
As Medicare provides healthcare to the growing Boomer population, the program’s finances will see a serious strain.
The Reasons Behind a Looming Crisis in Long-term Care
Public health insurance companies, such as Medicare and Medicaid, and private insurances don’t typically include coverage for the services long-term care provides.
We don’t usually anticipate or plan on caring for your relative or loved one as they grow older. However, some families have no other options for care.
Needing the services typically given in a nursing home or by a home health aide, seniors and their families look to their relatives for help. This often carries a great financial and emotional burden.
A health policy professor at Harvard, David Grabowski, studies long-term care. David said, “It’s a problem nobody’s talking about, part of that’s just, these are hard issues to think about.”
He continues, “Nobody wants to think about getting old and needing care. But part of it is that these are really hard problems.”
Long-term Care with Medicare
Around ½ to about 2/3 of the senior population in the U.S. will need at least some form of long-term care in their lifetime.
That’s about 69% of Americans that may require long-term healthcare services, according to the U.S. Department of Health and Human Services.
While about 1/3 of the 65-year-olds today may never need this type of care or support. That still leaves 20% (about) that will need long-term healthcare for 5+ years.
The cost isn’t exactly cheap or pocket-friendly either. Seniors should expect to spend a total average of $138,000 just in long-term medical expenses.
Grabowski co-wrote a study published earlier in 2019 stating that it’s not just the lower-class seniors who can’t afford the costs of care. Most middle-class seniors find it difficult (if at all) to pay for such costs.
As experts are saying, the cost and demand for home healthcare services are both on a steady incline. This is going to make the affordability rate to decline for many seniors when paying for such services long term.
Senior fellow in the Income and Benefits Policy Center at the Urban Institute in Washington, D.C., Richard Johnson said “We’re already facing a crisis in terms of how to pay for long-term services and supports. It’s creating a real quandary for states.”
Medicaid Coverage for Long-term Care
As of today, about 13% of adults pay out-of-pocket for their healthcare. Johnson stated that it will become harder to pay for services out-right as the healthcare system’s financial burden grows larger.
To qualify for Medicaid benefits, patients must have all their assets meet a certain limit. However, 3 out of 4 seniors could end up paying for home health care for 2 years before depleting their assets enough to qualify for Medicaid.
Medicaid pays the country’s largest portion,43%, of long-term care costs. These paid home-care services generally include a substantial out-of-pocket cost – otherwise left to the patient to pay.
The Cost of Long-term Care
Unfortunately, long-term care is something many of us will need as we age. The downside is the cost of care when you can no longer dress, take a bath without help or even feed yourself. It’s not only expensive but for most, it’s out of the question.
Majority of seniors don’t have $100,000 annually to spend in a nursing home. Even $45,000 for assisted living or $33,000 for in-home health care is a lot. Many just don’t have it, so their health suffers.
Additionally, the average rates for semi-private rooms and private rooms in nursing homes have seen a large increase since 2016.
Semi-private rooms were $82,128 in 2016; two years later that number jumped to $89,297 annually. At this rate, the estimate for 2028 is as high as $120,008 a year!
Private room in a nursing home annual average cost in 2016 was $92,376. With rates jumping up to $100,375 in 2018, the year 2028 expects this number to reach $134,896 annually.
Actual costs will depend on which state the nursing home is located. Many states have similar rates, ranging only a few hundred dollars different.
However, in states like Alaska – the cost to stay in a nursing home is nearly $15,000 more than states such as Hawaii and Connecticut. These states have an average monthly rate of $12,000-$13,000 for this type of care.
A Nonprofit working group known as the Long-Term Care Financing Collaborative reports “the out-of-pocket costs of such assistance can be catastrophic. Few people have the resources necessary to meet these needs.”
New Thinking and Innovation for a Solution
Policymakers have been working on solutions to the problems that surround financing long-term services and supports (LTSS). The goal is to help give quality health care to the millions of seniors and disabled Americans that need it.
However, for 3 decades there’s been a small success rate; as we saw when the U.S. Congress made an attempt with the CLASS Act. However, lawmakers haven’t given up just yet.
Congressman Frank Pallone (D-NJ) presented a discussion draft of a bill in 2018. The Medicare Long-Term Services and Supports Act.
Would “establish a public benefit within Medicare, designed for everyone regardless of income or where they live, to provide long-term care services and supports.”
Although, the proposal didn’t come with a system for funding. Congressmen are working on a solution for long-term care.
Today (2019), roughly 10-12 million people require long-term support and care services. Experts anticipate that number to grow twice as much by the year 2030.
Millions of adult Americans and their families are barely getting the long-term care they need. Congress must act now before it’s too late.