Long term care (LTC) services in the United States (U.S.), for the most part, are paid for through taxes imposed on the citizenry (Shi, & Singh, 2014). In 2009, LTC services paid for by government funds totaled $203.2 billion and two-thirds of LTC services were paid through Medicare or other public LTC entities such as the Veterans Administration, and Medicaid (Shi, & Singh, 2014). Based on Fiscal Year (FY) 2010 expenditure data, Medicare provides 62.2% of all long-term care expenditures, followed by Out of Pocket payer expenditures of 21.9%, Private Insured expenditures of 11.6%, and finally other public payer expenditures totaled 4.4% (Who Pays, 2013)
While Medicare provides the largest share of expenditures, Medicaid expenditures in 2010 accounted for 31% of all Medicaid spending (Who Pays, 2010). Further, some researchers suggest that growing Medicaid expenditures in long term care place significant pressure on state’s budgets (Kozol, 2013). These researchers posit, that the growth of Medicaid long term care outlays might push the proportion of Medicaid expenses in state budgets to 30% (Kozol, 2013).
In 2010, LTC expenditures across all sources collectively totaled $208 billion, by 2040, LTC expenditures are anticipated to expand to $346 billion (Who Pays, 2013).
Source: Who Pays for Long-Term Care in the U.S.? The SCAN Foundation. Aging and Long Term Care with Dignity and Independence. (2013). Retrieved from http://www.thescanfoundation.org/who-pays-long-term-care-us
Medicare provides coverage for qualifying LTC in Skilled Nursing Facilities (Medicare, 2016). Medicare coverage pays 100% of the patients first 20 days and the patient pays a maximum of $140 per day for days 21 through 100, Medicare pays remaining balances for days 21 through 100 (Medicare, 2016).
However, there are stipulations regarding Medicare LTC coverage’s, for example, Medicare Part A covers LTC at Skilled Nursing Facilities (SNF) after a patient is hospitalized for three or more days or up to 30 days post discharge from a 3 day hospital stay, and only if the patients physician has directed a need for care in a SNF, and only if skilled nursing care is performed at a Medicare certified facility, and only if SNF admission is related to a medical condition that required the original hospitalization (Medicare, 2016).
Medicare Part A provides hospice coverage at home or as an inpatient depending on the nature of terminal illness (Medicare, 2016). Again, stipulations exist for eligibility including that a physician certifies the patient’s terminal illness carries an expectancy of 6 months or less, the patient accepts palliative care versus care for cure, and the patient signs a statement indicating preference for hospice over continued curative treatment (Medicare, 2016).
Source: Brown, J. R., Goda, G. S., & McGarry, K. (2012). Long-Term Care Insurance Demand Limited By Beliefs About Needs, Concerns About Insurers, And Care Available From Family. Health Affairs, 31(6), 1294–1303. https://doi.org/10.1377/hlthaff.2011.1307
A study of 1500 individuals 50 years or older found several reasons exist for individuals not obtaining Long Term Care Insurance (LTC) insurance, these include, 57% of respondents indicating cost as the primary reason, and 12% citing a perceived lack of need for long term care (Gleckman, 2011; Brown, Goda, & McGarry, 2012). Additionally, individuals are often reluctant to purchase LTC insurance because they fear their investment might be wasted if not utilized (Medicare, 2016). Finally, another reason that might lend to low utilization of LTC insurance includes the notion that many policies have limitations on how long they will cover LTC, or have limitations on amounts the policy will payout for LTC (Medicare, 2016).
Other options relative to providing for LTC include combination Life/LTC insurance, insurance products with Accelerated Death Benefits, Annuities, and Reverse Mortgages (Medicare, 2016). While each individual must evaluate risk to benefit impacts regarding these products, it is important that patients be informed regarding the existence of alternative avenues for the provision of their Long Term Care needs.
For additional information regarding this important topic visit the following sites:
- Long-term care | Medicare.gov. Retrieved from https://www.medicare.gov/coverage/long-term-care.html
- The SCAN Foundation | Aging and Long Term Care with Dignity and Independence. Retrieved from http://www.thescanfoundation.org/
- Center for Retirement Research. Retrieved from http://crr.bc.edu/
Brown, J. R., Goda, G. S., & McGarry, K. (2012). Long-Term Care Insurance Demand Limited By Beliefs About Needs, Concerns About Insurers, And Care Available From Family. Health Affairs, 31(6), 1294–1303. https://doi.org/10.1377/hlthaff.2011.1307
Gleckman, H. (2011). Why People Don’t Buy Long-Term Care Insurance. Retrieved from http://www.forbes.com/sites/howardgleckman/2011/09/12/why-people-dont-buy-long-term-care-insurance/
Federal LTC Plan Details and Long Term Care Insurance Introduction to LTC and LTCI. (2016). Retrieved November 14, 2016, from https://www.ltcfeds.com/start/aboutltc_cost.html
Kozol, G. B. (2013). The Long-Term Care Conundrum. Journal of Financial Service Professionals, 67(1), 30–35.
Medicare – Long-Term Care Information. (2016). Retrieved from http://longtermcare.gov/medicare-medicaid-more/medicare/
Who Pays for Long-Term Care in the U.S.? | The SCAN Foundation | Aging and Long Term Care with Dignity and Independence. (2013). Retrieved November 19, 2016, from http://www.thescanfoundation.org/who-pays-long-term-care-us