Long-term care means assistance with things that healthy, independent persons can do without help. Long-term care is a vague concept, not specific like a broken arm, or a tumor in the lung. In many ways long-term care is defined by what it is not, rather than what it is. See the links below for an in-depth discussion.
Long-term care is the problem everyone worries about. How do you pay for it without busting the bank for the taxpayers, or placing an intolerable burden on the backs of individuals and families?
The need for the extended care has become a reality through the longevity revolution. Millions of people are living longer and longer, reaching an advanced age where infirmities rob them of independence.
Yet the health care system isn't designed to cope with long-term care issues. The insurance and government programs are designed to pay for acute care: the detection, treatment, and solution of a short-term problem, an illness subject to combat from a surgeon's scalpel, or a pharmaceutical compound or both.
But what about an 89-year-old widow whose hands are so gnarled by arthritis she cannot dress herself or turn the knob on her kitchen stove. She is keenly alert, but she may wind up in a nursing home anyway, at a tab of $60,000 a year, because there is no way she can live alone. The widow and her grown children are shocked to discover that Medicare won't pay for her care in a nursing home. Only when she impoverishes herself, spending every penny she has on the nursing home, down to $2,000, will the government step in, declare her a pauper under Medicaid and pay for the nursing home bill.
Long-term care, therefore, is an individual financial responsibility except for the poorest among us.
For a more detailed discussion of long-term care related issues, see:
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Long-term care means assistance with things that healthy, independent persons can do without help. These are basic activities of daily living: eating, dressing, using the toilet, bathing, getting out of bed, and crossing the room to sit in a chair. Then there is another category of function, with tasks called instrumental activities of daily living such as writing checks, paying bills, cleaning the house, cooking, and going shopping.
Long-term care is a vague concept, not specific like a broken arm, or a tumor in the lung. In many ways long-term care is defined by what it is not, rather than what it is. It is not acute care. Nor is it rehabilitative care. Yet people who need acute care sometimes also need long-term care services. Certainly those who need long-term care also need health care. Benign neglect of long-term care has enabled a health-care system to develop with fuzzy boundaries between the care covered by health insurance and health plans, on the one hand, and long-term care, on the other.
Nearly ten million Americans are currently in need of some kind of long-term care assistance but the vast majority are managing to stay in the community with a little help from their family and friends. Only 1.6 million of the ten million reside in nursing homes.
For a more detailed discussion of long-term care related issues, see:
Prices can vary tremendously for long-term care, which can be delivered at home, in an assisted living facility where individuals live in apartments and take their meals in dining halls, or in costsly.nursing homes.
At the upper end of the financial scale is the nursing home, which can cost $5,000 a month or more, depending on the state. Typically, nursing home residents are female and in their 80s. Almost half of them suffer from Alzheimer's disease or related dementias, and need close attendance and supervision. The nursing home is for those patients who must have round-the-clock attention.
About half of nursing home costs are paid out of pocket by patients or members of their families. Typically, an individual enters a nursing home using personal or family resources, spends all his, or her savings on the nursing home, and then qualifies for Medicaid, the federal-state program of financial aid for poor people with medical bills. When a person has “spent down,” consuming all the savings and stocks and bonds, wiping out all financial assets but $2,000, Medicaid will pay for the nursing home.
Care also is available for individuals who are able to remain at home. For those who need skilled care, with someone to administer injections, or change surgical dressings, a nurse can be hired through an agency. Attendants who are not skilled nursing personnel can be hired to help with dressing bathing, cleaning the house and shopping. They can be hired through an agency, or in the individual marketplace. These are personal expenses and are generally not covered by the Medicare program.
Massive emotional and psychological burdens fall on the helpers who provide the care, whether they are spouses, other family members, or friends and neighbors who take time from work and other responsibilities.
For a more detailed discussion of long-term care related issues, see:
People are in better shape than ever before as they age. An 80-year-old in the year 2005 is likely to be significantly healthier than an 80-year-old in 1985 or 1965. She has been the beneficiary of more efficacious medications, and improved medical and surgical treatments as she aged. But even with individuals being healthy, the sheer numbers of the advancing and aging army—the baby boomers—will create a massive demand for long-term care services over the next 30 years.
For a more detailed discussion of long-term care related issues, see:
Medicare, shaped by its creation at a time when the great fear was being bankrupted by a stay in the hospital, protects only against short spells of illness.
In Round Pegs and Square Holes: Medicare and Chronic Care, a report for the NASI Study Panel on Medicare and Chronic Care in the 21st Century, Bruce Vladeck (who ran the program under the Clinton Administration) writes, "Medicare, true to its origins, still does not cover services viewed as primarily 'custodial,' which it interprets as those services designed to assist impaired individuals with activities of daily living in any way not integrally connected to an identifiable acute illness or problem. Medicare's non-coverage of long-term nursing home care is the most widely recognized manifestation of these old conceptual habits,” according to Vladeck.
“The convoluted lines drawn in Medicare home care between ‘skilled' services, which Medicare will pay for, and ‘custodial' services, which Medicare will not pay for, are often even more frustrating and illogical,” he wrote. “These statutory limitations reflect Medicare's bias toward covering care according to the acute care model—a series of targeted, staccato, specific clinical interventions on behalf of someone who is temporarily incapacitated, rather than continuous interdisciplinary care."
Example: Mrs. Mathilde Jackson is suffering from progressive memory loss. She often leaves her apartment, wanders the neighborhood, and forgets how to return home. Once she almost started a fire in the apartment because she left the stove unattended. Luckily, a neighbor was visiting and smelled smoke in the kitchen. Mrs. Jackson's daughter takes her to a doctor, who gives her a physical examination, asks a series of screening questions and diagnoses incipient Alzheimer's disease. Mrs. Jackson's daughter places her in a nursing home. She does not have any acute ailment, and Medicare will not pay for any of the nursing home bills. Mrs. Jackson has long-term care expenses, but they are a personal responsibility for her and her family.
If Mrs. Jackson “spends down,” i.e., uses all her financial resources (checking accounts, savings accounts, stocks, and bond) for the nursing home (except for $2,000) she will qualify for Medicaid. This is the federal-state program for the poor, and Medicaid will pay for the nursing home, once she has used all but $2,000 of her resources. All her pension and Social Security income will be devoted to the nursing home bills. She is allowed to keep a personal allowance of $35 a month.
For a more detailed discussion of Medicare and long-term care related issues, see:
Today, billions of dollars worth of care is provided without charge by families whose members give up time and money to willingly help their loved ones. But many of the baby boomers won't have these kinds of helpers, and may ultimately demand their fellow taxpayers foot the bill for hiring caregivers. Millions of boomers won't have spouses or children to rely on when they become infirm and struggle to stay out of nursing homes.
Nearly three quarters of baby boomers and seniors are concerned either a great deal or a fair amount about paying for long-term care, according to a poll commissioned by NASI's Study Panel on Long-Term Care. Seven in ten believe that government should do more to help people meet the costs of long-term care.
According to The Economic Status of the Elderly (NASI Medicare Brief No. 4), “More baby boomers are likely to be living alone in old age compared to their parents, for three reasons. First, more of the baby boomers have never married. Nearly 10 percent of the youngest baby boomers (born between 1956 and 1964) are forecast never to have married by ages 55 to 64, which is twice the rate of their parents. Second, more of those who did marry will become divorced or widowed by the time they reach ages 55 to 64—25 to 30 percent of them compared to 15 to 20 percent of prior cohorts. Finally, childlessness is on the rise. In 1989, 26 percent of couples aged 25 to 34 had no children, compared to only 12 percent of such couples in 1959. These trends will result in increase in the percent of older Americans living alone, from 21 percent of those age 63 to 72 today, to 24 percent of those 10 years younger, to 37 percent of the early baby boomers.”
For more information, see:
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Christine Bishop Professor and Director, Ph.D. Program Brandeis University The Heller School for Social Policy and Management (781) 736-3942 bishop@brandeis.edu |
| Jeffrey R. Brown Assistant Professor of Finance University of Illinois at Urbana-Champaign and National Bureau of Economic Research (217) 333-3322 brownjr@uiuc.edu |
Bing Chen Frank J. Manning Eminent Scholar's Chair in Gerontology University of Massachusetts (617) 287-7326 (office) bing.chen@umb.edu |
| David M. Cutler Professor of Economics Faculty of Arts and Sciences Department of Economics Harvard University (617) 496-5216 (office) (617) 271-5013 (cell) dcutler@harvard.edu |
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