Everyone faces the risk of needing long-term services and supports (LTSS), but it is impossible to predict who will need that assistance, when, or for how long. Many people will be able to get by with the help of their families, but a significant number will require expensive paid services over long periods.
An estimated 7.3 million adults in the community and in nursing homes require assistance to perform basic activities ofADLs or Activities of Daily Living are the basic tasks of everyday life, such as eating, bathing, dressing, toileting, and transferring. IADLs or Instrumental Activities of Daily Living are activities related to independent living and include preparing meals, managing money, shopping for… daily living such as bathing and dressing due to physical, cognitive or mental impairments. About 11.9 million require help with instrumental activities ofADLs or Activities of Daily Living are the basic tasks of everyday life, such as eating, bathing, dressing, toileting, and transferring. IADLs or Instrumental Activities of Daily Living are activities related to independent living and include preparing meals, managing money, shopping for… daily living, such as paying bills and riding a public bus.
LTSS encompass a broad range of assistance needed by people of all ages who are unable to function independently. These include assistance with self-care and household tasks; certain nursing and medical care; care management, habilitation and rehabilitation, and social services; assistive technology and home modification; and services to help people with disabilities maintain employment. Services may be provided in the home, in community settings such as adult day service centers, assisted living and other supportive housing settings, and in nursing facilities. Services are provided by family members, friends, and other paid caregivers. LTSS also includes the supports provided to unpaid caregivers, such as care consultation, education and training, counseling, support groups, and respite care. The uncompensated long-term care services provided by friends and family caregivers (to other adults) are worth about $470 billion per year—far more than the value of paid services. Therefore, supporting family caregivers in ways that allow them to continue to provide care is a crucial part of maintaining and expanding LTSS services.
Many people needing the type of care often provided by friends and family caregivers pay out-of-pocket for some or all of them, accounting for about 19 percent of total LTSS expenditures.
LTSS can be very expensive, and most families do not have the wealth or long-term care (LTC) insurance to cover those costs. Recent data show the median annual cost of a private-pay nursing facility stay was $97,455 for a private room and $85,775 for a shared room. The median hourly rate charged by agencies for certified home health aide services not covered by Medicare was $22; it was $21 for licensed homemaker services. The median annual cost for a private one-bedroom unit in assisted living was $45,000, while the cost of adult day services averaged $70 per day.
Although LTSS can be expensive and unpredictable, the U.S. has no comprehensive system to address the potential risks to families who might face unforeseen and unabsorbable costs. Unfortunately, the structures for both funding and providing these services in the U.S. are fragmented, uncoordinated, and costly. LTSS costs are not covered by Medicare, the primary health insurance for most Americans 65 and over. Medicaid, which provides health care coverage for people with low incomes, is the largest public payer of LTSS. However, to be eligible, participants must meet stringent income and asset criteria. Finally, less than 10 percent of LTSS expenditures are paid for by long-term care insurance which can be expensive and difficult for many Americans to acquire.
Many people cannot afford such insurance. Others are denied coverage because of medical underwriting; that is, insurance companies charge higher premiums or deny coverage to people who have preexisting health conditions that may increase their chances of needing services. Long-term care (LTC) insurance may also lack important consumer protections and may not cover the particular LTSS that a person needs. Also, while Medicare does not pay for LTSS, Medicaid and some other federal programs do cover LTC under limited circumstances (For more see Public-Sector Approaches to Financing Long-Term Services and Supports in this chapter).
Due to the high cost of LTSS and limited third-party coverage, many older people fear impoverishment and becoming a burden to their families. As the baby boom generation ages, the need for services will increase at a time where there will be fewer family caregivers to provide such care. The uncertainty of needing LTSS, and the potentially catastrophic cost burdens associated with it, lends itself to a social insurance solution where risk and costs are shared. Spreading risk widely is the best way to expand coverage and lower per-person costs. If everyone contributes, then everyone is protected. For these reasons, social insurance must play an important role in reform efforts and must cover a range of LTSS in home, community, and institutional settings.
Without this kind of solution, programs will operate in isolation and fail to best serve the millions of people with health care and LTSS needs. For too long LTSS have lacked a holistic focus to help people overcome the full range of obstacles to living in the least restrictive setting possible and maximize their potential for self-determination. A person- and family-centered LTSS policy would serve the needs of care recipients, support family and friends in their caregiving role, and create efficiencies in public spending. A system that starts with the needs of the individual would address personal care, nutrition, housing (including home modification), mobility, and medical needs. The result is fewer people in institutions and more in their homes and communities. In 2010, the ratio of potential caregivers age 45–64 to those at high risk of needing care (age 80 and older) was 7:1. By 2030, that ratio is projected to decline sharply to 4:1 and to further fall to less than 3:1 in 2050. By that time, all baby boomers will be in the high-risk years of late life. Higher divorce rates and childlessness will further complicate the availability of family care. Surveys indicate that most people who need LTSS strongly prefer to remain in their homes, especially if they need less than 24-hour help. If they need to move to receive services, people strongly prefer to live in an assisted living residence or other residential settings, rather than a nursing facility. Despite large increases in the older population, the number of people in nursing facilities declined from 1.5 million to 1.3 million from 2003 to 2016. Further declines are likely in the near future due to increased service options for older people with disabilities and the growth of home care and assisted living. Also driving the trend are increased use of technology and increased public funding for home- and community-based services. Addressing all these needs will require providing consumers with a robust range of information and assistance in understanding what services are available and how to pay for them. All states now operate Aging and Disability Resource Centers (ADRCs) as a single source of information and assistance about services for older adults and people with disabilities, regardless of their income or type of disability. A critical function of ADRCs is conflict-free care management services; that is, advice from well-trained care managers who act without self-interest or financial reward with regard to the services they recommend.