The Growing Crisis in Long-Term Care

  • By Allison Cook, Founder, Better Aging and Policy Consulting, and Erica Amarante, Consultant, Better Aging and Policy Consulting

This blog is the first part of a three-part series—“Long-Term Care Social Insurance Programs and the Home Care Workforce: A Crucial Investment”—exploring how states can strengthen long-term care for older adults, people with disabilities, and family caregivers—by designing sustainable financing models and investing in the workforce that makes care possible. This first installment examines the growing crisis facing America’s long-term care system—and why state action is urgently needed.

The U.S. is getting older, with 10,000 people turning 65 every day.1 People may also develop disabilities at any age that require long-term services and supports (LTSS). Seventy percent of those over the age of 65 will need some form of LTSS in their lifetimes – such as home care, care delivered in a nursing home or assisted living facility, adult day care, or others.2 Therefore, demand for LTSS, especially for home- and community-based services, is increasing.

Unfortunately, the U.S. has not created the necessary policies and programs to adequately pay for these services or ensure we have enough workers to deliver them. We currently have an LTSS system that leaves millions of people behind due to its fractured nature and lack of affordability. Medicaid, a federal and state partnership, has become the largest payer for LTSS – requiring middle-class individuals to spend down their life savings to qualify for vital services.3 Further, Medicaid home and community-based services are largely considered optional, rather than mandatory services – creating enrollment caps, waitlists, and geographic limitations for services.4 Private long-term care insurance provides LTSS coverage, but the premiums are unaffordable for many of those who qualify.5 These realities create a significant gap in this system for the “forgotten middle” who do not qualify for Medicaid, cannot afford long-term care insurance, and cannot afford paying out-of-pocket.6

At the federal level, debates on Medicaid have mostly centered on whether to maintain or cut existing funding levels—leaving little room for a broader, long-overdue conversation about how to adequately fund and strengthen this struggling system.7 Therefore, a growing number of states have begun to explore building their own programs to help their residents pay for the LTSS they need. In particular, learning from WA Cares in Washington State, additional states are considering establishing LTSS social insurance programs, which would provide a benefit to those who have paid in – usually through a payroll tax, similar to workers’ compensation and unemployment insurance programs.

Simultaneously, states are experiencing an LTSS workforce shortage. Meeting long-term care demand will require filling 8.9 million direct care positions between 2022 and 2032 (including filling new positions and replacing workers leaving the field).8 Therefore, any new LTSS financing approach that seeks to increase access to services must also address workforce needs.9

What’s Next

To inform a new analysis commissioned by the National Academy of Social Insurance, we paired a series of key informant interviews with research and analysis of current policies to explore what workforce strategies states can choose from when exploring building their own LTSS social insurance programs. The next two articles will detail these findings. In Part 2 of this series, we’ll explore how long-term care social insurance programs—already being considered in several states—offer a new and more equitable way to finance care for the future. In Part 3 of this series, we’ll outline the recommendations that resulted from this research.

Endnotes

  1. America Counts Staff. (2019, December). 2020 Census Will Help Policymakers Prepare for the Incoming Wave of Aging Boomers. U.S. Census Bureau. ↩︎
  2. Johnson, R. W. (2019, April). What Is the Lifetime Risk of Needing and Receiving Long-Term Services and Supports? ASPE. https://aspe.hhs.gov/article ↩︎
  3. Chidambaram, P., & Burns, A. (2024, July). 10 Things About Long-Term Services and Supports (LTSS). KFF. https://www.kff.org/medicaid/issue-brief/10-things-about-long-term-services-and-supports-ltss/ ↩︎
  4. Chidambaram, P., & Burns, A. (2024). ↩︎
  5. Cook, A., Cohen, M., Sally Oh, S. E., & Williams, G. (2024, April). Financing Long-Term Services and Supports. MIT CoLab. https://static1.squarespace.com/static/652d82667dfc3727b42d3a82/t/660d9d4ad647c748037313aa/1712168267305/MIT_CoLab_State-Article series.pdf ↩︎
  6. Pearson, C. F., Quinn, C. C., Loganathan, S., Rupa Datta, A., Burnham Mace, B., & Grabowski, D. C. (2019, April). The Forgotten Middle: Many Middle-Income Seniors Will Have Insufficient Resources For Housing And Health Care. Health Affairs. ↩︎
  7. Justice in Aging. (2025, May). House Passes Bill that Would Rip Medicaid from Millions of Older Adults. https://justiceinaging.org/house-passes-bill-that-would-rip-medicaid-from-millions-of-older-adults/ ↩︎
  8. PHI. (2024, September). Direct Care Workers in the United States: Key Facts 2024. PHI. ↩︎
  9. Espinoza, R. (2019, July). Workforce Matters: The Direct Care Workforce and State-Based LTSS Social Insurance Programs. PHI & Caring Across Generations. https://www.phinational.org/resource/workforce-matters/ ↩︎