CHAPTER I – THE NEED AND THE BASICS
LONG-TERM CARE SERVICES AVAILABLE
| Long-Term Care Service | Medicare | Private Medigap Insurance | Medicaid | You Pay on Your Own* |
| Nursing Home Care | Pays in full for days 0-20 if you are in a Skilled Nursing Facility following a recent hospital stay. If your need for skilled care continues, may pay for days 21 through 100 after you pay a $119/day co-payment | May cover the $119/day copayment if your nursing home stay meets all other Medicare requirements. | May pay for care in a Medicaid-certified nursing home if you meet functional and financial eligibility criteria. | If you need only personal or supervisory care in a nursing home and/or have not had a prior hospital stay, or if you choose a nursing home that does not participate in Medicaid or is not Medicare-certified. |
| Assisted Living Facility (and similar facility options) | Does not pay | Does not pay | In some states, may pay care-related costs, but not room and board | You pay on your own except as noted under Medicaid if eligible. |
| Continuing Care Retirement Community | Does not pay | Does not pay | Does not pay | You pay on your own |
| Adult Day Services | Not covered | Not Covered | Varies by state, financial and functional eligibility required | You pay on your own [except as noted under Medicaid if eligible.] |
| Home Health Care | Limited to reasonable, necessary part-time or intermittent skilled nursing care and home health aide services, and some therapies that are ordered by your doctor and provided by Medicare-certified home health agency. Does not pay for on-going personal care or custodial care needs only (help with activities of daily living). | Not Covered | Pay for, but states have option to limit some services, such as therapy | You pay on your own for personal or custodial care, except as noted under Medicaid, if you are eligible. |
If the person has sufficient income and assets, he is likely to pay for his long-term care needs out of his own private resources. If he can meet functional eligibility criteria and has limited financial resources, or depletes them paying for care, Medicaid may pay for his care. If he requires primarily skilled or recuperative care for a short time, Medicare may pay. The Older Americans Act is another Federal program that helps to pay for long-term care services. Some people use a variety of payment sources as their care needs and financial circumstances change.
The total amount spent on long-term care services in the United States (in 2003) was $183 billion. This does not include care provided by family or friends on an unpaid basis (often called “informal care.”) It only includes the costs of care from a paid provider.
While most information on “who pays for long-term care” presents these national figures, it is important to remember that each person's individual experience will differ. These figures combine the experiences of everyone receiving paid care, but there are significant variations from person to person.
On an aggregate basis, the biggest share, nearly 44 percent is paid for by Medicaid. On an individual basis, however, “who pays for long-term care” can look very different. This is because people with their own personal financial resources do not qualify for Medicaid unless they use up their resources first paying for care, so-called “spending down”. If they have reasonable income and assets, most likely they will be paying for care on their own.
Also, while Medicare overall pays for 18 percent of long-term care; it only pays under specific circumstances. If the type of care that one needs does not meet Medicare's rules, Medicare will not pay and the person will likely to pay for their own care.
With the baby boom generation aging and the cost of services going up, paying for long-term care is an issue of pressing importance for policy-makers and individuals alike. While some individuals can count on friends and family to assist with the activities of daily living, many others must determine how to pay for extended home-health services or a potential stay in a nursing facility.
Expenditures on nursing home care make up the largest part of long-term-care costs in the United States.
Almost $122 billion was spent on services provided by free-standing nursing homes in 2005, with an additional $47.5 billion spent on home-health care. Medicaid accounted for the largest share, or 43.9 percent, of the total spent on nursing facilities. Consumers covered an additional 26.5 percent of these nursing home costs out-of-pocket and private insurance covered another 7.5 percent...
The Centers for Medicaid and Medicare Services (CMS) reported that the total amount spent for nursing home care in 2005 was $122 Billion. They also presented the most recent statistics that shows that a 65 year old man has a 27% chance of entering nursing home at some point in his lifetime, while a 65 year old woman has a 44% chance. The cost of a private room in a nursing home averages more than $70,000 per year and such figures drastically affect state governments who spend 18% of their general fund budgets on Medicaid, so the cost of long term care just keeps escalating.
Learning more about the “rules” for when Medicare, Medicaid, other public programs or private insurance might pay for long-term care is an important part of understanding “who will pay” if and when you need care.
It's difficult to predict if or how much care will be needed and whether there are family or friends who can provide some or all of the necessary care, and how much care may cost. However, it's reasonably easy to predict that if someone needs extensive long-term care services or need services over a long period of time, they will have to pay for some or all of it out of their personal finances. That's why an increasing number of people are using private financing options to help them pay for long-term care if and when they need it.
Private long-term care financing options include long-term care insurance, trusts, annuities, and reverse mortgages. Which option is best for the individual depends on many factors including age, health status, their risk of needing long-term care, and their personal financial situation.
Health Screening May Be Required
Some methods of paying for long-term care may require health screening. Some options require that the person be in relatively good health (not currently needing long-term care and not having a debilitating chronic condition such as Parkinson's disease that would almost certainly mean that they would need long-term care eventually.) In contrast, some options are only available to a person in poor health.
The table below shows whether the person's current health is a consideration in eligibility for each option listed.
Relatively Good Health |
Poor Health or Terminally Ill |
Health Considerations are Not Important |
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Age Requirements
Some private payment options are good choices for older people; others make more sense for a younger person.
Better Option for Younger Person |
Better Option for Older Person |
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(And the following shows the problem!)
Early in November 2007, it was announced that the first "baby-boomer" has applied for Social Security. It is immaterial as to how they came up with this specific time, but the point is that the first drop has hit the beach in advance of a tsunami…
PLANNING FOR A NURSING HOME CONFINEMENT
People are living longer – surprise, surprise. This is the good news. The bad news is that because people are living longer, there are more ill older-generation people than ever before. Whereas people used to look forward to living long enough to retire at age 65, now they anticipate living for another 20-30 years. Now, when people think about getting older, they worry about what they will do in their “golden years.”
Each generation is a little wiser than the preceding generation, and even though many of their worries are the same, the later ones have the advantage of building upon the knowledge of the previous generations. One thing that many - if not most - have learned is the need for planning. Many have seen family and friends become disabled because of illnesses or accidents in their later years, and they are also aware that there will be care needed for the older folks as their health deteriorates.
PLANNING, WHEN AND HOW?
Bill has just turned 65 and has retired. His wife, Ann, is now 63, and they have three children, all married with children of their own. Bill’s mother typically outlived her husband, Bill’s father, and has recently moved into an assisted living facility as she has difficulty in “getting around.” One of their grandchildren is autistic and required a lot of attention from her parents – her mother had to give up working to take care of the child. Their son is struggling financially as he has two children in college, one of which will go to law school if there is any way that he can afford to do so. Their daughter has a happy family, with a good husband and three lovely children. All-in-all, each of their children is totally wrapped-up with their own family matters and Bill or Ann would not want to disturb those situations under any circumstances.
Bill remembers visiting with his grandfather in an “old folks home” when he was small and his memory is that the place where his grandfather stayed smelled “funny” and was full of people who seemed to have no place to go or nothing to do, and every visit was depressing. Bill decided that he never would go to a place like that to stay.
Ann’s parents have a “plan” for such contingencies; one that they feel would serve them quite nicely. Her parents are in their early 70’s and are just now ‘starting to slow down.” Her father has difficulties in walking any distances at all and her mother is terribly forgetful, so she has to check on her parents very often. Their plan, which they have just now started to fulfill, is to sell their house – it is way too large for them now anyway. They want to be “independent” so they do not want to move to any kind of place that “does for them.” They cannot stand the thought of not being independent. Therefore, they are planning on buying a small house or condominium in an area where they can walk to the grocery store, Wal-Mart and Applebee’s. They will use the money that they get from the sale of their house so that they will not have a mortgage, and whatever is left over will provide additional funds to supplement their Social Security and a small pension that her father has. That, in a nutshell, is their plan.
For Bill and Ann, there must be additional planning because if either of them become incapacitated, they are going to have to take care of themselves as they would never impose on their children to help as they are all busy raising their own families. If they have sufficient funds to make it worthwhile, they could use the services of an estate planner so that the surviving spouse will not be hit with a large tax burden. Trusts could be established so that the funds will be used to the best advantage of each other and their children when they both pass on, or are not able to handle their own financial matters. Perhaps they may want to use the services of a financial planner also, especially if their income is derived from various sources or they are invested in the stock market or similar investments.
What does this have to do with Long-term Care Insurance (hereinafter referred to as “LTCI”)? To jump ahead a little, in those situations where a financial planner or an estate planner becomes involved:
FThere have been, and will probably continue to be, lawsuits involved where a financial planner, estate planner, or sometimes, just an insurance agent – does not make the client aware of the availability and advantages of Long-term Care Insurance.
Heirs who anticipate inheriting sizeable estates will be quite offended if they learn that the estate has been diminished by nursing home and/or other long-term care expenses, and that the “professional” who assisted in the estate or financial planning, did not make the estate owner aware of such a program.
THE “SANDWICH GENERATION”
A member of the “Sandwich Generation” is called this because in addition to their own needs, they are burdened with the responsibility of caring for their own parents. Many of the caregivers are married, some with children. There just are not enough hours in a day to care for an invalid parent plus other family responsibilities. Some caregivers do not marry and have families because of their "obligations" to provide care for an ailing parent of other family member.
Recent studies show that seven million people in the United States work as unpaid caregivers and seventy-five percent of them are women (and the majority of them are daughters-in-law). The National Family Caregivers Association has conducted many studies and these studies show clearly that caregivers who are fulltime and performing the services often (too often) suffer from depression and a variety of physical ailments, notably back pain, besides all of the financial stress arising from these situations.
What Is Long-Term Care?
“Long term care” (LTC) may be defined as “day-to-day care that a patient receives in a nursing facility, in his own home, or some other facility following an illness or injury resulting in the patient being unable to perform (usually) at least two of the five basic activities of daily living: walking, eating, dressing, using the bathroom and mobility from one place to another.” Dictionary of Insurance Terms, 3rd Edition Activities of Daily Living (ADLs) will be discussed in more detail later and Long Term Care Insurance (LTCI) extends beyond this definition of ADLs, but is a good place to start. It must be noted that long-term care goes beyond medical care and nursing care and assistance to the patient can be received in several settings. Typically, individuals associate long-term care with nursing homes, and not surprising, the earliest “Long Term Care Insurance” policies were designed to cover those expenses.
Also, although it most often affects older people so they are the primary users, it should be noted that younger persons may suffer a debilitating illness or become involved in an accident, and they can also require long-term care.
Basically, LTC is usually the process of maintaining or improving the ability of (usually) elderly people with disabilities to function as independently as possible and for as long as possible. However, LTC is not strictly a “medical” treatment as it also includes social and environmental needs on a much broader plane than purely medical needs. Mental or Cognitive Impairment results in the need for supervision and monitoring.
Primarily long-term care services are not complex while in a nursing home in most cases; however when elderly persons with complex medical needs are discharged to, or remain in, traditional long-term care settings (including their own homes) then the care can become more detailed and precise. Therefore, in the planning for long-term care, services that may be needed and the location of such services being provided, both must be carefully considered. The care may range from simple assistance with activities in a person's own home or a residential care facility or it can mean highly skilled care in a nursing facility.
Most importantly, the case of long-term care can be quite expensive, even though it basically is personal care as described in the definition above, but such personal care can be extended over a substantial period of time. A person with Alzheimer’s disease, for example, may live for 20 years or more in a nursing home even though they may be oblivious to their environment.
Long-term care does not include hospital care, therefore Long Term Care Insurance benefits do not include hospital benefits—such costs are usually covered by hospitalization insurance and/or Medicare.
F The most common definition of “long-term” in this context is 90 days or longer.
To illustrate the problems of those requiring long-term care, many of the activities that a healthy person takes for granted, such as grocery shopping, housecleaning and paying bills—and, importantly, taking medication— often present huge difficulties for the ill or disabled person. For a disabled person, the environment in which he or she lives can become formidable or even threatening. Stairways, basements, door sills and long hallways can become physical barriers. The very simplest of household devices such as microwave ovens or remote controls may become confusing to operate. Everyday chores for their very survival, may take hours to complete, such as preparing meals, doing laundry, keeping living quarters clean and sanitary, etc.
THE RISK OF NEEDING LONG-TERM CARE
What are the chances of needing long-term care? This is a reasonable question when a person contemplates spending money for needs that may or may not every occur. Since the introduction of Long Term Care Insurance, actuaries and other statisticians have been hard-at-work trying to answer this question. Obviously, some people may never need long-term care. On the other hand, statistics show that, this year (2005), about nine million men and women over the age of 65 (roughly nearly 3.6 %) will need long-term care. By the year 2020, 12 million older Americans will need long-term care most of which will be cared for at home; family members and friends are the sole caregivers for 70 percent of elderly people.
F The U.S. Department of Health and Human Services statistics show that those who are age 65 face at least a 40 percent lifetime risk of entering a nursing home and nearly 10% will remain there for 5 years or longer.
The probability of entering a nursing home and staying for longer period of time, increase with age and recent statistics indicate that at any given point in time, about 27% of those age 85 or older, are in a nursing home. No surprise, but women have a 44% greater chance of entering a nursing home than men (as they generally outlive men) after age 65.
The total amount spent on long-term care services in the United States (in 2003) was $183 billion. This does not include care provided by family or friends on an unpaid basis (often called “informal care”). It only includes the costs of care from a paid provider.
While most information on “who pays for long-term care” presents these national figures, it is important to remember that each person's individual experience will differ. These figures combine the experiences of everyone receiving paid care, but there are significant variations from person to person.
On an aggregate basis, the biggest share, 48 percent, is paid for by Medicaid. On an individual basis, however, “who pays for long-term care” can look very different. This is because people with their own personal financial resources do not qualify for Medicaid unless they use up their resources first paying for care, so-called “spending down.” If you have reasonable income and assets, most likely you will be paying for care on your own.
Also, while Medicare overall pays for 18 percent of long-term care; it only pays under specific circumstances. If the type of care you need does not meet Medicare's rules, Medicare will not pay and you are likely to pay for your care on your own.
Surveys have been made that indicate that throughout the country, the greatest majority of citizens have no idea as to what long-term care would cost. More than 60% felt that the cost of long-term care was $50,000 a year or less, while nearly 20% thought it was higher and the rest didn't have a clue.
Results of a California study showed that when asked how they will pay for long-term care if it is needed, a third of the respondents believe that their family assets and income will be enough to pay for long-term care should it be needed. Only one out of ten surveyed have invested in a program to cover the costs of this care.
Nearly one quarter of the respondents (24 percent) say their children or family would provide the care or help pay for it if it is needed—and this percentage would be higher in rural America.
Interestingly, over 55% of the respondents with private health insurance either believe that their policies will cover all of their long-term care or are uncertain.
LTCI has become an important consideration for planning because people are living longer and the number of elderly is growing—there are 76 million “Baby-Boomers” (those born between 1946 and 1964) who have very recently retired or will be retiring within the next few years. There are fewer available caregivers and healthcare costs are increasing at a rate of over 10% per year and prescription costs have increased about 15%.
In addition, and perhaps most importantly for those who expect for the government to take care of them if they need long-term care, both Medicaid and Medicare are unprepared for the onslaught of senior citizens needing long-term care. The future of both of these programs is being closely scrutinized so that they can meet the challenges of the future.
LTC INSURANCE INCLUDED IN FINANCIAL PLANNING
In addition to the legal concern (voiced earlier) that arises when estate/financial planners do not make an effort to provide coverage for the risk of long-term care, Long Term Care Insurance must be considered as a financial planning tool as much as the other important tools, i.e., Wills, Trusts, Guardianship of minor children, and Powers of Attorney.
Specialists in Elder Law, who are engaged in long-term care planning, stress that the most important thing that an elder person can do, is to have a Power of Attorney in effect. There are two types of Power of Attorney:
(1) Financial Durable Power of Attorney, which provides for financial control when an individual can no longer make these decisions, and
(2) Medical Durable Power of Attorney which provides for appointing a health care surrogate to make medical decisions. For reference, this is much stronger than a living will.
WHO NEEDS CARE AND WHY
As indicated previously, seniors are the fastest growing segment of population and the heaviest users of long-term care and health care services and in states where there is a large number of elderly, such as California, Arizona and Florida, the elderly population (age 65+) is expected to grow more than twice as fast as the total population. The elderly age group will increase an average of 112% during the period 1990-2020. Since women live longer than men, they are disproportionately affected by long-term care as they are more likely to develop the functional ailments that require long-term care services. Two-thirds of residents in long-term care facilities are women.
In the past, families were much more concentrated in a geographic area and this was true all over the country—in New York City it was not unusual to find several generations growing up and living in the same tenement. Much of America was rural and it was necessary for family members to work on the farm for the family’s livelihood. During the Depression and WWII, many family members moved to other parts of the country where jobs were waiting, such as the West Coast. Today, families are scattered and family members have their own responsibilities so that in many cases it is nearly impossible to provide for the care of ailing or elderly family members. Another and more recent factor is that more women work outside of the home and traditionally, women were the caregivers for family members.
NEED FOR CARE
Measuring the extent of an individual's functional impairment is essential to determine care needs as well as whether or not the insured has met the coverage triggers in LTCI policies. Much research has gone into defining minimal components of independent functioning. As the need for more long-term care grew, it soon became apparent that some measuring “sticks” must be applied so that meaningful legislation, both in state and federal laws, is developed so as to measure an individual's ability to function independently in the community.
LONG TERM CARE INSURANCE BENEFIT “TRIGGERS”
“Triggers” – as explained later in detail – is the physical or mental condition of the insured that determines when benefits will be paid under a Long Term Care Insurance policy. Although most LTCI policies require a physician's certification that nursing care is required because of illness, injury or medical emergency,
F Newer policies are not allowed to require prior hospitalization.
There will be later discussion in respect to Coverage Triggers as to how they differ between TQ and NTQ policies.
ACTIVITIES OF DAILY LIVING (ADLs)
A physical impairment research in a 1963 study by Stanley Katz introduced the measurement of physical functioning called Activities of Daily Living (ADLs). ADLs are often used by health care experts to determine whether a person is capable of living independently and serve the purposes of measurements to assess a person's need for nursing home, home health or other long-term care services.
The ADLs previously mentioned (walking, eating, dressing, using the bathroom and mobility from one place to another) are used in LTCI policies, but typically bathing and continence are added. The Partnership policies must have 6 ADLs: Bathing, Continence, Dressing, Eating, Toileting and Transferring.
INSTRUMENTAL ACTIVITIES OF DAILY LIVING (IADLs)
Obviously there are other functions that require assistance so that the individual can be independent and can continue to live outside of a nursing facility. These are called Instrumental Activities of Daily Living (IADLs) and usually include cooking, cleaning, doing laundry, household maintenance, transporting themselves, reading, writing, managing money, using equipment such as the telephone, and comprehending and following instructions.
In an area between ADLs and IADLs, is a very important function often overlooked—that of taking medication. One might think that it doesn’t require assistance to lift a pill box and take a pill with a glass of water, BUT, there are often (too often) times when a person that can perform the ADLs “forgets” to take medication, “forgets” as to when they took it last, how much they are supposed to take and when. Experienced Caregivers are very aware of these situations and immediately take steps to regulate and schedule medication for their patients. Some LTCI policies consider this as an IADL.
In addition to managing medication managing medications, IADLs include moving around outside of the residence and in particular, going to the “grocery store” and the doctor’s offices. Generally, these patients are unable to drive so the Caregiver will either drive their own car or that of the patient’s. Also, if the patient is ambulatory, and with the physician’s permission, many patients enjoy and derive considerable benefit from going on walks, regardless if they can move on their own, use canes or walkers, or even use a wheelchair.
Preparing meals is another important IADL. A patient that is totally mobile but with mental or cognitive problems can be a danger to themselves and others while operating a stove (for instance). Even operating a microwave can be a problem for some.
The same applies for doing the laundry. A drier can easily start a house fire if improperly operated, or a washing machine can overflow. Even performing light housekeeping duties can be destructive, if not downright unsanitary, if the patient is unable to do what is needed.
COGNITIVE IMPAIRMENT
Cognitive Impairment refers to confusion or disorientation resulting from a deterioration or loss of intellectual capacity that is not related to, or a result of, mental illness, but which can result from Alzheimer's disease, senility or irreversible dementia. Many seniors with mental impairments can perform all of the ADLs, but they need constant supervision to protect themselves and others while performing them. The most feared cognitive impairment is Alzheimer’s disease which has caused grief in families who watch their loved ones “disappear.” In addition, those who have suffered strokes and other diseases and conditions that cause irreversible brain damage, face an uncertain and deteriorating future.
Policies sold today must include coverage for long-term care required by people who are physically able to perform the tasks but forgot how or why to perform the tasks or can't perform them safely on their own. Approximately one third of all senile people can perform all ADLs, but they need constant supervision, prompting or instructing in order to complete them safely.
DETERMINING EXTENT OF COGNITIVE IMPAIRMENT
Methods used to determine consist of one of two accepted standard tests that are recognized and accepted throughout the medical profession, the Folstein Mini-Mental State Exam or the Mental Status Questionnaire (MSQ).
THE NEED FOR LONG-TERM CARE
The US Census Bureau estimates that the mean average age of the US population has increased from a little over age 35 in 1990 to nearly age 37 in 2000. In 1900 the average life expectancy in the US was between 40 and 50 years, but by 2000, this has doubled. The average years of life remaining at representative ages is shown below:
At Age |
Average Years of Life Left - Males |
Average Years of Life Left - Females |
Difference |
55 |
29.40 |
32.92 |
3.52 |
60 |
25.15 |
28.42 |
3.27 |
65 |
21.09 |
24.12 |
3.03 |
70 |
17.31 |
20.08 |
2.77 |
75 |
13.86 |
16.34 |
2.48 |
80 |
10.87 |
12.90 |
2.03 |
85 |
8.31 |
9.86 |
1.55 |
U.S. Senior Population Growth
The US Census Bureau statistics indicate that the older population at age 65 will grow from 54% during the period of 2000 to 2020, compared to 136% from 2000 to 2020. At age 85+ .the growth rates for 2000 to 2020 will be 58%, compared to 351% for years 2000 to 2050. AARP Public Policy Institute
For whatever it’s worth, 2/3 of all of the people who ever lived to be age 65 is alive today. The Age Wave
- The fastest growing population group in Southern states is age 85 and over.
- Today, statistics indicate that approx. 1 in 75 Southerners are more than 85 years old; that number will grow to 1 in 65 in 2010 and 1 in 35 by 2040.
- The older population is increasingly non-white. Minorities who are older than 60 will increase by 350 percent between 2000 and 2040.
- Nearly two-thirds of those in long-term care facilities in retirement states are covered by Medicaid.
- The influence of the 85 and over age group in Florida, California and Arizona will emerge most strongly between 2030 to 2040 as the first of the baby boomers reach 85 years of age. Area Agency on Aging
Nursing Home Residents Are Predominantly 85 or Older. Even though 22% of persons 85 or older reside in nursing homes they make up half of all persons in nursing homes and many more are receiving care in the home or community. "About 50 percent of all nursing home residents are 85 or older, thus the current nursing home population is frailer than ever before and requires more specialized care." CDC, National Nursing Home Survey, NCHS
The Problems of Tax-supported Long-term Care
The cartoon at the first of this Chapter says it pretty well—people are living longer, and older folks have more need for long-term care than do the younger citizens.
Medicaid provides a large proportion of long-term care to those citizens who are disabled or have cognitive impairments and who cannot afford to pay for the necessary care. A special problem exists for Medicaid and Medicare—and the Social Security program—which are tax-supported programs. The major problem can be simply stated: there now are fewer Caregivers and fewer taxpayers to pay for the services. To put it in proper prospective, 92 per cent of all nursing home costs are paid by the individual patient or by Medicaid nationally, which is undoubtedly the largest unfunded liability in the U.S. For contrast, Medicare only pays 8% of the total costs of long-term care. HCFA
The parents of the Baby-Boomer generation produced 3.9 children per family, or nearly 2 children to pay taxes and provide care for each parent. For a variety of reasons, the average number of children born to baby-boomer couples was only 1.1 or about ½ child for each parent. Therefore, there are less taxpayers to pay for long-term care costs (and other tax-supported programs) and to provide the care necessary. This means there will be fewer paying in and more taking out of the government programs for seniors.
By 2050, the population aged 65 or older will outnumber children aged 0-14 for the first time in recorded history. By the year 2050, there should be almost a million citizens over age 100! US News & World Report
According to a recent California study, the Baby Boomers were in their most economically productive years, and they represented 35% of the state’s population. By the year 2010, the Baby Boomers will represent only 25% of the population of California, and by 2020 will be in pre- and early-retirement ages (45 to 64 years). During the period of 2000 to 2010, an era of fluctuating births and improving survivorship, from 14% in 1990, the elderly population will grow to 22 % in 2030. From available statistics, these percentages closely track other states also.
This large elderly statistical group will strain services and programs required by an aging population. At the same time, the 0-19 age groups will decrease by 7 percent, and by 2030 there will be little distinction between any of the age groups.
For America's 77 million Baby Boomers, paying future long-term care costs remains as their largest looming expense. According to the Bureau of the Census, in 2020, one out of every six Americans will be age 65 or older - roughly 20 million more seniors than today. Furthermore, by 2020, the number of Americans 85 and older - the people most likely to use long-term care will double to seven million, and double again to 14 million by 2040. Health Insurance Association of America, 6/28/01
There will be a rapid growth in the number of persons age 60 and over as the Baby Boomers begin turning 60 in 2006. Although baby boomers have a very positive view of aging, there is an overwhelming level of denial regarding the likelihood of needing long-term care. Source: STAT Research Survey study conducted by Center for Aging Research and Education:
GOVERNMENTAL FINANCING PROBLEMS
Government estimates indicate there will be almost 70 million people over 65 by 2030 and that nearly 8.5 million of those will be over 85. Since that is far-and-away the greatest section of the population who use nursing homes, it is important to note that nursing home stays in Florida (perhaps the “retirement capital”), for instance, may cost $50,000 - $60,000 a year and more in some areas. There is every reason to believe that these costs will continue to rise as at this time, for example, about 1.5 million people live in nursing homes nationwide and the number could grow to 5 million by 2040.
Nursing homes are big business with 17,000 nursing homes and large corporations dominating the industry and nursing home costs presently exceeds $85 billion. The time is “a-coming” when governmental funding will be insufficient to pay LTC, and other health care costs (Medicare, Medicaid, etc.) of the Baby Boomers as they are aging rapidly. As later described, the State and the federal government are working closely in various attempts to alleviate this growing problem. The Partnership Program with Long Term Care Insurance is a step in that direction.
FAMILY CAREGIVERS FACE CHALLENGES
As described in the previous mention of the "Sandwich Generation" the majority of home care is provided by family members and/or close friends and usually, one person assumes the primary role because he or she is closest geographically, closer to the parent emotionally, or a take-charge type of person. While the primary role is probably and usually the most time consuming and stressful, all those involved face similar difficult issues. It can be difficult for adult children to find solutions and assistance that their parents will find acceptable. Deciding on who will be involved may also be difficult and usually it boils down to immediate family and close friends. Limited support can usually be provided by distant relatives, some friends, neighbors, and community organizations. For the person needing care, they often hesitate to ask a child for help in the fear that their relationship can be harmed and the same can apply between siblings when one needs help from another in caring for a family member.
Taking care of a parent can affect all relationships. People may be more involved with brothers and sisters or their spouse and children may feel neglected. Any existing tension in their marriage is likely to increase. Colleagues at work may provide a diversion from caregiving. Even if they are sympathetic to added demands, they still expect people to get their work done on time. Walking tightropes like these can add to caregivers' stress.
One study shows that the average caregiver now devotes 18 hours a week to helping elderly loved ones. To balance the demands of work and home, employees often miss business meetings, decline transfers or business trips, come to work late, reduce their hours or take unpaid leave.
US Senate testimony reveals that family members provide 80% of LTC in America. If these unpaid family members were replaced by paid home care providers, the estimated cost would be nearly $200 billion dollars annually. Caregiver Chartbook - Robert Wood Johnson Foundation
Nearly one-quarter of American households (22.4 million) are involved in caregiving to elderly relatives or friends. National Alliance for Caregiving Pension & Benefits Reporter, June 1, 1998. The majority of family caregivers—65 per cent— do not receive help from family or friends. In interviewing caregivers, over 40% of family caregivers consider the loss of leisure time, feelings of isolation, and the change in family roles to be the most burdensome aspects of caregiving. Unfortunately Caregiving takes its toll as 49% of family caregivers have suffered from prolonged depression because of their care-giving experience. The Family caregiver Alliance, April 24, 1997.
WHO ARE THE CAREGIVERS?
It is estimated that one in four households is involved in caregiving in some fashion. These caregivers are about 30% daughters, a slightly less percentage by wives, about 10-14% by husbands and the remainder by sons and unrelated friends. While the statistics may be quite old, at one time, nationally, a survey discovered that the predominant class of caregiver was daughters-in-law which resulted in many parents taking another look at their children’s spouse…
One set of statistics indicate that between 20 to 40 percent of caregivers also have children under 18. Someone came up with the statistic that the average woman spends 17 years caring for children and 18 years caring for an elderly relative. Be that as it may, nearly 57 percent of caregivers are age 65 and over, while 40 percent are ages 18 to 64 and 3 percent are children under 18.
THE EFFECT OF LONG-TERM CARE ON EMPLOYERS
In the more heavily populated states, over half (53 % in California, for instance) of caregivers under age 65 have dual responsibilities, work and caregiving. This is not unusual at all, as in many heavily populated states one in four employees provides assistance to elderly relatives and by 2006 that figure is projected to be one in two. An employee that provides caregiving services must be affected by attendance problems and continual concern about the well-being of the person that they provide care for, with the result that there is inevitability a substantial loss in productivity. For the average company, the estimated cost associated with such caregiving is over $3,000 per employee annually.
STUDY QUESTIONS
CHAPTER ONE
1. The largest share of long-term care in the US is financed by
A. Long Term Care Insurance.
B. Medicare.
C. private out-of-pocket funds.
D. Medicaid.
2. People are living longer which means
A. there are fewer doctors as there are fewer sick people.
B. people don't have to worry about long-tem care as mostly they are healthy.
C. there are more ill elderly people than ever before.
D. people take their medications better than ever before.
3. Many people find that when they are nearly ready to retire, they must take care of their parents who are ill. These people, mostly baby-boomers, as also called
A. the sandwich generation.
B. the unforgiving generation.
C. the hard rock generation.
D. the wealthy generation.
4. Day-to-day care that a patient receives in a nursing facility, in his own home, or some other facility following an illness or injury resulting in the patient being unable to perform (usually) at least two of the five basic activities of daily living: walking, eating, dressing, using the bathroom and mobility from one place to another, defines
A. the need for gerontologists.
B. part of the mission statements of most nursing homes.
C. long-term care.
D. assisted living facility services.
5. When discussing long-term care, this usually relates to
A. a period of 90 days or more.
B. an assisted living facility or congregational care.
C. insurance.
D. Medicare benefits.
6. Long Term Care Insurance (LTCI) should be considered as
A. an estate planning tool.
B. an easy way to make a living as these plans are easy to sell.
C. part of disability policy.
D. too expensive for 99% of Americans.
7. Measuring the extent of an individual's functional impairment is essential to determine care needs as well as
A. to determine the financial outlay to make the home safer for impaired homeowners.
B. whether or not the insured has met the coverage triggers in LTCI policies.
C. the need to purchase an LTCI policy, or perhaps, a second one.
D. declare bankruptcy so that Medicaid can take over.
8. Often used by health care experts to determine whether a person is capable of living independently and serve the purposes of measurements to assess a person's need for nursing home, home health or other long-term care services, are (is)
A. psychological tests performed in a hospital.
B. tests to determine whether the person has sufficient funds to enter a nursing home.
C. a check of credit reports and police reports.
D. Activities of Daily Living.
9. Policies sold today must include coverage for long-term care required by people who are physically able to perform the tasks
A. and who have sufficient funds to hire personal duty nurses.
B. but forgot how or why to perform the tasks or can't perform them safely on their own.
C. and who have a driver's license.
D. and are presently in a hospice.
10. An employee that provides caregiving services must be affected by attendance problems and continual concern about the well-being of the person that they provide care for,
A. with the result that there is inevitability a substantial loss in productivity.
B. but there is no loss of productivity as caretakers make good employees.
C. usually are old enough so that they retire early.
D. will usually be promoted because such an employee sets a good example for other employees.
ANSWERS TO STUDY QUESTIONS
1D 2C 3A 4C 5A 6A 7B 8D 9A 10A