Long-Term Care -- An Impending Crisis for the Elderly
Most Elderly Have Failed to Plan for Long-Term Care
If we were to ask an older person what his or her most important concerns are we would probably get a variety of different answers. But according to surveys frequently conducted among the elderly, the most likely answers we would receive would include the following three principal concerns.
Although the elderly are definitely concerned about the need for long-term care it is not high on the list of concerns. It is human nature not to worry about an event until it happens. Certainly everyone is concerned about having his house burn down or having an accident or getting an illness or ending up in the hospital or needing long-term care but these things are typically beyond our control and we can't sit around and worry about them. But people do plan for the risk of loss and typically have set money aside or bought insurance or prepared written documents to cover the unexpected.
For the elderly the need for long-term care is probably the most catastrophic unexpected event that could happen. This is because the need for long-term care typically removes any level of security an elderly person may have with the three major lifestyle concerns mentioned above.
With the need for long-term care the older person:
No other late-life event can be as devastating to the lifestyle the elderly are so concerned about maintaining. No wonder many elderly care recipients withdraw, become angry and suffer from severe depression.
Ironically, older people painstakingly scrape together $100-$200 a month to buy Medicare supplement insurance to cover a risk about equal to their yearly premiums. They will go without and sacrifice food, recreation and activities in order to hold on to the last few dollars in their savings accounts.
Yet very few elderly spend money or time to plan for the event of long-term care. It seems a paradox that someone would be more concerned about buying insurance for a home fire when the risk of long-term care is 600 times more likely. Or what about the cost of insuring for an auto accident when the risk of long-term care is 120 times more likely and is potentially 20 times more expense? Or why the overwhelming concern to buy Medicare supplement insurance when without it Medicare would still cover most of their health needs after deductibles and co-pays? We're not recommending going without insurance coverage we're simply using it as an example of how people refuse to deal with the issue of long-term care.
No one knows why people beyond age 65 are not more concerned about preparing for long-term care. Perhaps they have seen it in their family or among friends and seen the effect that it has. Because of the unsavory aspect of receiving long-term care, perhaps the elderly prefer to ignore it rather than embrace the need for it. Perhaps they mistakenly think the government will take care of them. Or they are assured that family and friends will provide the care when needed, but don't know how difficult it really is for loved ones to provide that care when the time actually comes. Whatever the case, without proper planning, the need for long-term care can result in the single greatest crisis in an elderly person's life.
This lack of planning will always have an adverse effect on the older person's family. It usually results in great sacrifice or financial cost on the part of the spouse or children. Or for those with no immediate family, long-term care can be a burden to extended family members.
Because of Changing Demographics and Future Lack of Government
As if the current lack of planning for long-term care were not a great enough burden on the immediate or extended family, the failure to plan, for the current generation of baby boomers, could be even more devastating on spouse or family in the future. Here is a list of factors that will make long-term care in the future an even more pressing burden than it is today.
(source for statistics: statistical abstract of the United States, 2005)
The failure of the current pre-retirement generation to plan for long-term care will have an even greater future negative impact on our culture and our families than the lack of planning does today.
We Can't Rely on The Government--Government
Government programs such as Medicare, Medicaid and the Veterans Administration will cover the cost of long-term care under certain conditions. Medicare will cover rehabilitation from a hospital stay or limited care at home if there is a skilled (medical) need. The Veterans Administration will cover the cost of nursing home care indefinitely if the veteran is at least 70% service-connected disabled. The VA will also cover other forms of home-based or community-based care if there is a medical need.
Medicaid will cover both medical and non-medical related long-term care but in order to qualify for Medicaid a person has to have less than $2,000 in assets and income that is insufficient to pay the cost of care. In other words a person must be impoverished. Otherwise Medicaid will not pay.
Based on our analysis of yearly, one-on-one care hours, we estimate that about 84% of all long-term care is not covered by government programs. This is primarily family-provided home care to help with activities of daily living, or help with maintaining a home, providing meals and support, or care services providing supervision or companionship or providing transportation and shopping services. Care not covered by the government is also care provided from family out-of-pocket payments in nursing homes and assisted living facilities. Families are also hiring more and more aide services to help with care at home.
Based on the chart below about 71% of all long-term care hours are provided in the home by family. (We have excluded home care hours from Medicaid and Medicare programs.) . Most of this care is provided free of charge by family members, friends or volunteers. However some is provided by professionals or aides paid from family funds or from insurance. If we were to multiply the total number of home care hours we derived for the chart below times the average hourly cost for home health aides, we would have an equivalent yearly cost of home care in this country. We estimated about 16,556,400,000 hours per year of home care in 2000 and the number of elderly has grown about 1% per year since then. This gives us roughly 17,400,943,000 hours in 2005. The MetLife annual survey estimates the cost of home health aides is $18 an hour.
Multiplying the two figures together gives us $313.2 billion of equivalent, current home care cost.
This is roughly 3 times the total current amount the state and federal government pays yearly for all long-term care services. If the Federal government had to pay all home care costs in this country combined with what it already pays for long-term care, the cost would be the third largest single expenditure in the federal budget exceeded only by Social Security and defense.
Many people are pushing the government to do just that--pay an increasing amount of home care services for the elderly.
Source: Thomas Day at longtermcarelink.net
The chart was derived and extrapolated from a number of sources. Also a number of educated guesses were made in order to complete the data. These were estimates of daily care hours including services such as homemaker and housekeeping services for various care systems. Some of the estimates were based on examples of acuity standards and personal experience. We feel that although the data may contain some error, you can get an appreciation of the amount of care in terms of hours yearly that is provided by the major care systems in this country. The number for home care hours provided comes from the 1999 National Long-Term Care Survey where the respondents indicated the average number of weekly hours provided for care was 42 hours. The hours per patient in nursing homes were estimated from the 2000 survey of nursing home staffing done for Congress. Hours and length of stay for Medicare home care, Medicare nursing home and hospice were taken from CMS sources. The analysis is for the year 2000. The most complete data set is from surveys and statistics published in 1999 and 2000. There is not a current complete data set available to do this analysis for a more current period.
Source: Thomas Day at longtermcarelink.net
The average length of stay for long-term care nursing home residents is 2.43 years. Source: CDC, National Nursing Homes Survey, 1999
The estimated average length of stay for home care is 3 to 5 years depending on the care setting. Source: 1999 National Long Term Care Survey
A 1999 survey done by the National Council for Assisted Living e stimates the average length of stay in an assisted living facility ranges from approximately 2.5 to 3 years.
Common Excuses People Use to Justify
Here is a sample of some of the excuses we have heard from people who refuse to plan for long-term care. Some of these objections seem perfectly reasonable and you may wonder why we list them as an excuse not to plan. The answer is, in the light of further analysis, none of these reasons are realistic.
People who use these objections to long-term care planning , typically have only a few basic, underlying, real reasons for rejecting the concept.
People who do eldercare planning are very likely to have gone through long-term care with a loved one and see the need for planning. It's also interesting to note that from our experience some people who have seen long-term care in their family still fail to plan. Our experience has been these particular people were never involved directly in the care of a loved one. Another member of the family was probably saddled with the entire load and responsibility. Non-involved members of the family escaped unscathed from the responsibility of care for a loved one and as a result do not see long-term care as a big problem.
People who refuse to do planning are more likely to have never experienced it and are prone to deny that long-term care can happen to them.