2nd Opinion – Long-term care 101
As an AARP employee for the past seven years, my eyes have been opened to the incredible number of issues facing today's senior population. From the origins of Social Security and Medicare, we are in a world of change as the Baby Boomers age. The impact of the aging of the Baby Boomers will have an affect on the entire world.
As the United States ushered in the 20th century, only four percent of the population or approximately 3.1 million people were 65 or older. By 1950, 8.1 percent of the population or approximately 12.3 million were 65 or older. By the year 2000, the percentage of individuals age 65 or older in the United State had risen to 12.4 percent of the population or some 35 million people. Due to the aging of the baby boomer generation, by the year 2030, 70 million Americans or one out of every five Americans will be age 65 or older. The baby boomer generation is the cohort of individuals born between 1946 and 1964.
The dramatic demographic profile of the baby boomers as they age will have a tremendous impact on the U.S. health care system. It is not simply the shear number of baby boomers who are aging, but the life expectancy profiles of today's elderly is not the same as an elderly person who helped usher in the 20th century. People are living longer. Almost 80 percent of women who reach the age of 65 will live another 19 years; for the 80 percent of men who reach 65, they can expect to live an additional 15 years. The older a person gets, the more likely they will require extensive health care services.
In the United States, long-term care is assumed to be care received in a nursing home. But long-term care actually involves a variety of services for people of all ages and for a wide variety of health conditions.
Long-term care should be renamed “temporary care,” based on usage. Someone aged 65 in 2007 will need some long-term care for an average of three years. Women need an average of 3.7 years while men need on average 2.2 years. It's important to note that while one-third of all Americans age 65 and older will never need long-term care while 19 percent will need it for a period of more than five years.
Projecting the long-term care needs for people turning 65 requires an understanding that not 100% of the population will require any long-term care. The key is understanding the phrase for those who live to the age of 65. Socioeconomics, lifestyle choices, and genetics will all play a role in whether a person lives to the age of 65.
The majority of Americans attribute long-term care with nursing home care, but that isn't the case. Long-term care is provided by a number of providers, the majority of whom are not paid. Services of long-term care also come in a variety of forms, from homes, home-like settings, and actual institutions. Nursing homes and home care agencies are the traditional paid providers of long-term care and still provide the majority of services, but other types of providers are increasing in use.
In the broadest terms, long-term care includes a variety of services, including (1) supportive services; (2) medical and rehabilitative services; and (3) palliative care services. Supportive services constitute the core of long-term care, including assistance with activities of daily living (ADLs), such as eating, bathing, walking, or simply getting to the toilet. Supportive services also include assistance with instrumental activities of daily living (IADLs), such as paying bills, managing money, household chores, cooking, and shopping. A second category of long-term care is medical and rehabilitative services, in which people with a chronic disabling condition need continual monitoring and/or intervention. Because of an injury or accident, individuals of any age may need rehabilitative services in their recovery process. The third category of long-term care is palliative care, which is usually provided when a person is close to death. The goal of palliative care is making the patient as comfortable as possible while addressing any spiritual, social, physical, and existential needs that may exist.
A mixture of supportive services, medical and rehabilitative services, and palliative care services may be present in the various types of long-term care in America, although palliative care is more likely to take place in a nursing home.
In the U.S., approximately 60 percent of the 9.5 million Americans who sought long-term care were aged 65 or older. The older the person, the more likely he or she may need long-term care. But the percentage of long-term care usage also drives the point home that this service is not exclusively for the elderly.
The majority of individuals who need long-term care are older adults, although individuals recovering from a serious medical injury may also require some period of long-term care. Long-term care providers must deal with a variety of chronic conditions, including Alzheimer's disease, arthritis, diabetes, cancer, as well as physical impairments including hearing loss, blindness, and loss of mobility from either injury or a stroke.
What are the costs?
2008 COSTS
National Average
Alaska
Annual costs – Alaska
FACILITY
Nursing Home
Private Room 1
$ 209 per day
$ 515 per day
$ 187,902
Nursing Home
Semi-Private Room 2
$ 187 per day
$ 514 per day
$ 187,813
Assisted Living (Private one-bedroom) 3
$ 3,008 per month
$ 4,567 per month
$ 54,809
COMMUNITY
Adult Day Care 4
$ 59 per day
$ 70 per day
$ 25,675 8
HOME
Home Health Aide Services (Medicare certified) 5
$38 per hour 10
$ 81 per hour 10
$ 168,282 9
Home Health Aide Services (non-Medicare certified) 6
$19 per hour 10
$ 27 per hour 10
$ 55,438 9
Homemaker Services 7
$18 per hour 10
$ 24 per hour 10
$ 54,866 9
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1 – Provides skilled nursing home care 24 hours a day.
2 – Provides skilled nursing home care 24 hours a day.
3 – Provides “hands on” personal care as well as medical care for those who are not able to live by themselves, but do not require constant care.
4 – Provides social and other related support services in a community-based, protective setting during any part of a day, but less than 24-hour care.
5 – Provides “hands on” personal care and sometimes skilled care associated with a nurse visit in the home. Assist with activities such as bathing, dressing and transfers. This is the rate charged by a Medicare-certified agency.
6 – Provides “hands on” personal care but not medical care in the home with activities such as bathing, dressing and transfers. This is the rate charged by a non-Medicare-certified licensed agency.
7 – Provides “hands on” care such as helping with cooking and running errands. Often referred to as “Personal Care Assistants” or “Companions.” The rate provided is one charged by a non-Medicare certified, licensed agency.
8 – Based on eight hours per day, five days a week of care.
9 – Based on 44 hours per week of care.
10 – Hourly rate for participating agency or organization, not for the individual worker, who would be an employee of the agency/organization.
Source: Genworth Financial 2008 Cost of Care Survey
Who pays?
Ask five people who pays for long-term care and I'll bet you get five different answers, including “I don't know.” The cost of long-term care is a mixture of private and public funds, with the majority of financing bore by individual Americans. People incorrectly assume Medicare will pay for long-term care services. Medicare does not. Medicare pays, on average, about 11% of any long-term care expenses, but with limitations. To be eligible for Medicare coverage in a long-term care or nursing home situation, the individual must be under the care of a physician for a specific condition, require skilled nursing services on an intermittent basis, or who need speech or physical therapy for a specified time.
People sometimes confuse Medicare and Medicaid. Medicare is health insurance for people 65 and older, for those under age 65 with particular disabilities, and for those of any age with End-Stage Renal Disease. Medicaid, on the other hand, is a program to provide health coverage for low-income Americans. Guidelines vary from state to state, but are generally gauged against federal poverty guidelines.
Based on the funding sources for both nursing home and home care, it is not uncommon for individuals to “spend down” in order to qualify to Medicaid. This might be difficult for many Americans to accept. The concept of spending down after a lifetime of working, paying taxes, and saving for retirement is contradicted by the requirement to have no assets in order to qualify for welfare. It doesn't make sense for individuals who have followed the rules to have to give up what they have long worked for in order to pay for end of life care.
Who Pays for Nursing Home Care
Private Long-term Care Insurance
5%
Medicare
8%
Medicaid
41%
Out of Pocket
46%
Who Pays for Home Care
Private Long-term Care Insurance
5%
Medicare
15%
Medicaid
17%
Out of Pocket
63%
(Cost of Care Survey, Genworth Financial, 2008)
Now, because I work for AARP, people assume I know all about products and services available through AARP. In fact, I work for the non-profit side of AARP. Here in the AARP Alaska State Office, our small staff works on legislative and community activities on behalf of Alaska's 95,000 members. All the insurance products and discount programs are managed by the for-profit side of AARP and we actually have a legal responsibility to maintain an arms-length relationship. While I cannot provide information on any insurance products, I can provide a toll free number where people can call about products and services: 1-888-OUR-AARP (1-888-687-2277).
For more information on the issue of long-term care, feel free to contact me in Anchorage at 762-3302, toll free at 866-227-7447 or via email at asecrest@aarp.org
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Ann Secrest is with Alaska AARP.
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