7 in 10 will need long-term care, ready or not
Governments today pay for 62 percent of the nation’s long-term care services at a cost of $130 billion a year. But demographic realities could make that public cost look puny in the not-so-distant future.
The number of Americans needing long-term care is expected to more than double by 2050, according to a report issued in December by the U.S. Long-term Care Commission. Meager retirement savings, in general, mean that people’s ability to pay for care will fall short of the need.
The commission found that long-term care is changing through technology and more services available in the home. In addition, more disabled people want the opportunity to work. Consumers need to have access to affordable insurance for long-term care at a time when many insurers have left this market and premiums are more expensive than most families can afford, the commission found. Medicaid needs to be strong enough to meet the demand for those who have exhausted their ability to care for themselves.
“The need is great,” the commission report said. “The time to act is now.”
While the commission agreed on plenty, it split on the issue of financing with part of the group calling for a new, public “social insurance” program within Medicare to pay for the care. The majority of the group, however, suggested trying to find ways to make long-term care insurance and other means of private financing more affordable and more popular in the future.
“I believe we have one of the best systems in the world in the provision of care,” said Neil Pruitt Jr., a member of the commission who is the CEO of Georgia-based UHS-Pruitt Corp., a massive long-term care company.
“But if you look at the economics and the increasing population and the lack of government resources to pay for it, we have to be creative and we really have to focus on spending more dollars at the bedside than on administrative costs. That’s a huge focus.”
The nation also needs to educate consumers about the cost of long-term care and make it easier for people plan for it.
Pruitt says it’s simple for him to go online and find the resources that will help him figure out how much money he needs to save every month to pay for a college education for his three children. But such guidance is difficult to find when it comes to long-term care. How many people want to consider a future in which they are frail retirees who can’t take care of themselves?
“We want to assume that we’re invincible,” Pruitt said. “Retirement (planning) is not necessarily where it should be, but long-term care is way after retirement planning.” That needs to change, he said. “It’s critical that we address it.”
BY THE NUMBERS
70 percent of people now turning 65 will need long-term care at some point during their lives.
Families provide most long-term care, with 42 million caregivers providing basic care to family members on a typical day in 2009.
The value of family caregiving is estimated at $450 billion a year, compared with all paid caregiving at $211 billion.
In 2010, every American age 80 and older had 7.2 potential caregivers between the age of 45 and 64. In 20 years, as baby boomers need more care, that ratio will drop to just 4.1 potential caregivers for each 80-plus person.
Medicaid programs cover most paid long-term care, at $131 billion
Long-term care insurance coverage is rare: only 10 percent of the potential market of Americans 50 and older is currently insured.
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LONG-TERM CARE QUESTIONS AND ANSWERS