Families are draining their savings: the need for long-term care coverage becomes a major issue


In addition to reminding us of the high cost of long-term care, the COVID pandemic has exposed shortcomings in how we manage the care itself, including quality of facilities, quantity of beds, staff scheduling and a lack of commitment to improving the system.

Long-term care reform must be at the top of the federal government’s political agenda if we, as a society, are to enable people to age with dignity and well-being. Reform should emphasize expanding coverage and strengthening linkages with broader health and public health systems to create equity. A 2021 report by four leading researchers details this, and other proponents of long-term care reform agree with it.

Every day in the United States, 10,000 people reach the age of 65 and the number of older adults will more than double over the next few decades to 88 million people and represent more than 20% of the population of ‘by 2050. The government has predicted that more than half of adults turning 65 today will eventually need long-term assistance with daily activities such as eating, dressing and bathing.

This essential care should not represent a personal financial challenge for anyone. In early 2022, the Kaiser Family Foundation reported that residents and staff in long-term care facilities were caring for more than 201,000 deceased COVID-19 patients, representing at least 23% of all COVID incidents. -19 in the United States.

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Why we must act now

Given recent data from the Centers for Disease Control and Prevention on a national increase in cases, it is necessary to emphasize the importance of affordable long-term care insurance to pay for necessary treatment and care.

The national annual median cost of care ranges from more than $108,000 per year for a private room in a nursing home to $20,280 per year for adult day health care services five days a week, according to the 2021 Genworth Financials Cost of Care Survey. .

A semi-private room costs $7,756 per month or $93,075 per year. The average length of stay for all nursing home residents is 485 days, according to a February 2019 report from the National Center for Health Statistics.

Families empty their savings

In my experience as a gerontologist at the Alzheimer’s Center at Rush University Medical Center in Chicago, I spoke to older people who worried about the costs involved at the end of their lives. Several families told me that they were taking out reverse mortgages, spending their savings and dipping into their retirement accounts to pay for long-term care.

When an individual is part of a married couple, this can be tricky. If he has to pay for private health care for his sick spouse, the healthy spouse often expresses the concern to maintain his lifestyle.

Many people I speak to wish they could pass on their wealth to their children and not have to worry about paying skyrocketing long-term care costs. A survey conducted by Genworth in 2021 found that 66% of caregivers used their personal savings or retirement accounts to pay for the long-term care of a loved one.

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The Medicare Misunderstanding

Some Americans think Medicare covers long-term care. But it only covers up to 100 days of care in a skilled nursing facility for each “benefit period,” which begins the day you check into a facility and ends 60 days after you leave.

If someone needs more than 100 days of such care during a benefit period, they will have to pay out of pocket. For patients whose coverage days are running out, they must either pay with private funds or have a pending Medicaid application to avoid being deported. An exception is nursing homes that do not accept Medicaid.

For eligible low-income patients, Medicaid pays for skilled nursing care (but not assisted living). Medicaid coverage is not available to middle-class seniors whose household income is $17,609 or more for an individual in 2020.

The Affordable Care Act, known informally as Obamacare, included a long-term care insurance program called Community Living Assistance Services and Supports. Critics and independent analysts said the premiums people would pay in the program would not cover the cost of providing care, so Congress repealed that part of the law.

Will Congress act on alternatives?

There are alternatives at play. Rep. Frank Pallone, a New Jersey Democrat and chairman of the House Energy and Commerce Committee, released a draft discussion on a long-term care benefit on May 2, 2018. duration of Medicare. This bill is pending and the Senate has not voted on it. .

House Ways and Means Committee Chairman Richard Neal, a Democrat from Massachusetts, said Medigap supplemental insurance should include long-term care coverage. He wrote to the National Association of Insurance Commissioners, requesting information on ways to expand long-term services and supports through Medigap for older Americans and people with disabilities, but to date there is no got no response.

Rep. Thomas Suozzi, a New York Democrat, recently introduced the Well-Being Insurance for Seniors to be at Home (WISH) Act, legislation that would address one of our nation’s most pressing challenges: funding long-term care for the American elderly.

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The bill allows registrants to claim long-term care benefits only after one to four years of family care, public or local care, or private coverage. Beneficiaries’ waiting times would vary depending on their lifetime income, with high-income people waiting longer than middle- and low-income people. To fund the plan, Suozzi is offering an additional Medicare payroll tax of less than 1%.

Questions about structuring a program

Policy experts disagree on the best way to structure a federal long-term care insurance program. Considerations include whether the program would be completely public or a public-private hybrid, how much cost-sharing enrollees would have to bear, whether participation would be mandatory or voluntary, and whether coverage would be universal.

It will be difficult to fund the program while avoiding the actuarial pitfalls that have driven so many private long-term care insurers out of the market.

In other countries such as Japan, Germany, the Netherlands, Denmark and France, social insurance programs have been extended or universal long-term care coverage already exists.

Several states, including Illinois, Michigan, Minnesota and Washington, have experimented with long-term care insurance plans and could serve as models for a national program.

Alternatives to institutional care

As an alternative to institutional care, any federal long-term care insurance program must encourage the use of home and community care. Nursing home care is much more expensive than home and community care. Research shows that older adults thrive in their homes and communities when they can interact more frequently with friends and family and live in familiar surroundings.

State governments can receive grants from Medicaid — the government’s largest long-term insurer — to help seniors stay at home. Over the past few years, more than 90,000 seniors have benefited from subsidies by getting home care instead of moving to nursing homes.

There is no easy solution to the national long-term care crisis, but policymakers must address it. America can no longer be a country where older people are forced to sacrifice their dignity and health to survive because they cannot afford the care they need.

Michael Pessman is a gerontologist and community engagement coordinator at Rush University Medical Center in Chicago and a Public Voices Fellow through The OpEd Project.

This article is reproduced with permission from NextAvenue.org© 2022 Twin Cities Public Television, Inc. All rights reserved.

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