It starts with a call that a loved one is in the hospital after being in a serious accident. Sometimes it comes from having chronic health conditions that minimize daily functioning as one grows older. These life-changing events present individuals and their families with a new set of needs and challenges that require a variety of human capital and financial resources to redefine and maintain daily living on their terms.
The likelihood that you or someone you love will need this kind of support is greater than you may think. While nearly all Americans hope to remain in their homes as long as possible—enjoying good health and living independently—the reality is that 70 percent of people over 65 will need some form of support to assist them with daily activities at some point in their lives, for an average of three years.
Over the next two decades, Americans will reach that milestone at a rate of nearly 8,000 a day. The older people become, the more likely they will need long-term care, and with advances in medicine and technology, we are living well into our 80’s and 90’s.
Americans currently receive supportive services from a variety of sources, ranging from unpaid family care and home health care providers, to continuing care retirement communities and nursing homes. However, many seniors are without family assistance or simply do not want to be a “burden” on their loved ones to care for them—leaving them with few affordable options.
Meanwhile, the cost of paying for long-term care continues to grow. In 2011, national spending on long-term care reached $211 billion, which includes government payors as well as personal out-of-pocket spending. This number is not surprising given that the MetLife Mature Market Institute reported that the annual cost of nursing home care exceeded $82,000 on average, while the cost of using home health aides for roughly 20 hours a week is nearly $22,000 per year.
Most American families—even those of middle- and higher-incomes—are unprepared for the full extent of these costs. Few have the means to purchase current private long-term care insurance products, and the number of companies offering these products is shrinking. Medicaid currently pays 62 percent of national long-term care costs, but most seniors are not eligible for Medicaid assistance with long-term care until they exhaust, or “spend down” their personal finances first. Forcing people into poverty in order to qualify for care is neither compassionate nor sustainable policy.
Health care policy-makers across the spectrum agree that we must find a new way to address this burgeoning national challenge, especially as a growing amount of evidence suggests that Medicare’s highest expenditures are for patients with multiple chronic conditions and functional impairment. Gaps in appropriate long-term care can force seniors with immediate health care needs into emergency rooms and other acute-care settings, where they often receive expensive, and sometimes inappropriate, care.
Policy solutions that address these needs from the perspective of supportive services may ultimately play a major role in addressing those concerns, and a number of national and state initiatives in both the public and private sector are aiming to develop sustainable, integrated care networks for Americans in need of long-term care. Individual communities are also stepping up, with many building multi-provider networks that allow local seniors to access care in a variety of settings.
The Affordable Care Act tried to address this growing national concern as it included the Community Living Assistances Services and Supports (CLASS) Act, a provision that called for the creation of a national long-term care insurance program. However, the Obama administration halted implementation in 2011 after deeming the program was unworkable and financially unsustainable in the long-run, and it was ultimately repealed in the American Taxpayer Relief Act of 2012.
The repeal of the CLASS Act was followed by Congress’ call for creation of the Commission on Long-Term Care, a 15-member, bipartisan group tasked with making recommendations to Congress on long-term care for adults of all ages with functional needs. This commission, with a charge to report back to Congress later this year, has the potential to develop meaningful policy solutions that will help all Americans age with dignity, choice, and independence.
Today, millions of Americans require sustained assistance with daily activities and health care needs, but many have neither the means nor the support networks to meet their needs. The time has come for the health policy community to develop and implement meaningful, cost-effective solutions for a critical issue that affects nearly every family and has major implications for the U.S. economy and national entitlement reform.
Bruce Chernof, M.D., is president and CEO of The SCAN Foundation, an independent, non-profit public charity devoted to transforming health care for seniors in ways that encourage independence and preserve dignity. In February 2013, House Democratic leader Nancy Pelosi appointed Dr. Chernof, along with several others, to the bipartisan Commission on Long-Term Care, created earlier this year and responsible for developing a plan to establish, implement and finance a comprehensive set of long-term care services.