Long-term care (LTC) entails different types of services that are designed to meet the person and health care needs of an individual over a long period of time. These services are thus usually provided for individuals to assist them to live well when they cannot undertake everyday activities by themselves. People that usually need long-term care services may have serious ongoing health condition or could be disabled. The need for long-term care could also occur in case of a heart attack or stroke. However, for the larger population, the need for the services usually develops as one gets older, frailer as a result of illness, or their disability gets worse. The larger population that needs long-term care services are usually the elderly population that may no longer support themselves adequately. One of the main problems for this population is financial challenges and adequate support caused by the increasing elderly population that causes an increase in the demand for the services. This paper thus analyzes the financial challenges that the aging population faces when accessing long term care services.
Funding Options of Long-Term Care
The funding of long-term care is one of the main issues for patients that need LTC services. There are primarily two ways that one can pay for long-term care and it involves either public or private funding. Public funding involves initiatives undertaken by the government to provide for healthcare for its population. However, the problem with government supported funding is that it places huge financial pressures on the national budgets. Medicare and Medicaid are examples of public funding initiatives. The total national spending on LTC amounted 310 billion in 2013 where Medicaid covered 51 percent of all the expenditures (Joshua, 2017).
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Private Funding
The option for private funding can involve huge amount of costs that many people can hardly afford. According to the National Research Council (2014), a nursing home can cost approximately more than 80,000 per year, an assisted living facility can cost $40,000 per year, and intensive day care could cost $20,000 per year. Many people do not have such huge amounts of funds to afford care for long periods. Young people that are disabled have not had a chance to earn income and save such huge amounts of money while a small percentage of older Americans can support themselves through those funds. Private funding arrangements can thus have severe and unintended consequences for those that opt for this mode of payment. For individuals that do not have adequate income, it could mean that they rely on informal caregivers.
Private Insurance
One of the main form of alternatives to LTC is through the use of private insurance. An effective use of insurance can be used to mitigate against the huge financial burdens of healthcare costs. However, Schmitz and Giese (2019) observe that the total number of private LTC insurance policies in the United States are small. The market for private insurance is thus small. Private insurance for long-term care also usually have high premium prices. Joshua (2017) observed that for the year 2011, there were approximately 7 million Americans that had private LTC insurance and the average annual cost amounted to $2,283. Even though some may want to opt for private types of insurance, such an option is thus usually not easily accessible or is rather expensive.
Medicare and Medicaid
Medicare and Medicaid may appear as ideal options for LTC services but these funding options have their limitations. Medicare is a health insurance program for people that are above the age of 65 or those that have certain disabilities. Medicare has a limited amount of LTC where an individual can stay in a nursing home care for at least three days. Medicare is limited because it provides 100 percent for the first 20 days, and one would be required to pay $161 per day through day 100 and beyond day 100 no payments can be made (“Long Term Care Insurance”, 2019). Medicare can also provide treatment at home but would take place only when one is confined to their home and the treatments have been ordered by a doctor. Individuals that may thus need LTC services and are under Medicare expect to experience financial burdens as a result of the limited pay that Medicare provides.
Medicaid covers for healthcare and LTC costs and a large percent of residents in nursing homes are under Medicaid. For one to qualify for Medicaid, one should verify that they no longer have savings or any assets to pay for medical services. Federal requirements are that one’s financial history should be examined so as to determine there has been no transfer of assets. The challenge of thus using Medicaid is that it can serve as the last option for individuals that may require long-term care. It is thus an ideal option for individuals that have very low income and a limited number of assets. One of the challenges of Medicaid is that it provides little choice regarding where one will receive care and the program covers a limited home health care.
Financial Burden from the Growing Elderly Population
One of the causes of the financial challenges and financial burdens for long-term care services has been caused by the growing elderly population. According to Joshua (2017), the growth rate of the elderly and retired population is expected to outpace the general population growth within the next 50 years. LTC needs have thus been shown to have a close link with the age of the population. The demand for LTC services is thus expected to increase dramatically for those that are above age 85 and have long-term care needs. It is also expected that there will be approximately 94 million people aged above 65 by the year 2050 and their family sizes will be smaller. This shows that the elderly people will have fewer resources in terms of children that are willing to support them and provide long-term care services. The demand for informal caregivers is thus expected to rise. However, with the demand for informal care rising faster than its supply could push its costs up and they may not adequately serve the growing elderly population that needs LTC services.
The growing burden of the elderly population can also be understood by considering the current population that requires long-term care services. Spetz et al. (2015) carried out an analysis of national surveys to determine the current staffing and use of long-term care and determine whether the workers would meet the demand by the year 2030. Empirical data was used to carry out the analysis and it was determined that the projected demand for long-term care workers would be higher than the current trend The study also showed that other occupations such as social workers, community and social service workers, and home health and personal care aides are expected to increase. With the population of the elderly expected to grow significantly, it was determined that the growth in the current workers would not meet the number of workers. This shows that there is a need for policy workers and educators to redouble their efforts and to create and fund programs that should train, recruit, and to retain long-term care workers.
The financial preparation of the healthcare needs of the growing elderly population has also been difficult. According to Crowley (2018), the elderly population has not received adequate support to self-prepare. The study revealed that many Americans do not have the financial ability to adequately plan for their long-term care as most usually outlive their assets and thus rely on the assistance from the public. One of the reasons for this is that there is still a level of uncertainty regarding whether one would actually long-term care services. Therefore, there are several determinants which can impact the probability for one to adequately plan for long-term care. The aging demographic along with the large number of individuals that are living with an individual that has a chronic health condition at their old age places an increasing huge amount of demand for communities and individuals to become adequately prepared.
Potential Solutions
The analysis of the funding issues related with long-term care services revealed an increasing financial burden for individuals that may need LTC. The public and private funding initiatives in the United States had several problems and limitations. In order to solve the problem with the current situation, Mosca (2017) observed that countries should take a close look into the possibilities of having an adequate implementation of private and public funding. In the United States, there is a need to address the limitations that Medicare and Medicaid have when it comes LTC services. The analysis further revealed that there were market failures when it comes to private funding. Therefore, it is important to address these market failures and to ensure that private insurance for LTC have friendly costs and that it is more accessible to the larger population.
The analysis also revealed that there is an increasing demand for LTC services and this is not matched by the growing workforce. Therefore, there is an urgent need to have a highly trained and competent workforce to assist the growing population that need LTC services. In order to realize this, some of the initiatives that can be taken is to improve the working conditions and wages for individuals that work in LTC services. Technology can also be used to ease the work that the caregivers provide. However, the developing technology should be matched with an increase in a supporting workforce.
Patients that need long term care services are expected to increase and one of the ways to alleviate the financial responsibility is to treat LTC as a social responsibility. The National Research Council (2014) revealed that not everyone can be prepared adequately through savings to facilitate payment for LTC services. By treating caregiving as a social responsibility, the community and family members would be ready to provide LTC services. Family caregivers would alleviate the financial challenges that the elderly and disabled population faces when dealing with LTC services.
Conclusion
The topic of interest that was analyzed was long term care services and specific problem that was identified was the financial challenges and financial burden that the population that needs LTC services face. The different funding options available was found to have several limitations. Medicare only supports individuals up to 100 days and Medicaid offers support only when one shows evidence that they do not have the financial capability to pay for LTC services. It was also identified that these financial challenges are expected to increase as the elderly population increases. The elderly population is expected to grow significantly and this has not been matched with an increase in the supply of LTC workers. In order to solve the financial challenges, it was observed that there is a need to expand private funding and improve the number of family caregivers.
References
Crowley, J. (2018). Predicting Long-Term Care: Determinants of Probability. Journal of Life Care Planning, 16(3).
Joshua, L. (2017). Aging and Long Term Care Systems: A Review of Finance and Governance Arrangements in Europe, North America and Asia-Pacific. Washington, DC: World Bank Group, 1-112.
“ Long Term Care Insurance”. (2019). Retrieved from https://www.shoreunitedbank.com/investments/long-term-care-insurance
Mosca, I., Van Der Wees, P. J., Mot, E. S., Wammes, J. J., & Jeurissen, P. P. (2017). Sustainability of long-term care: puzzling tasks ahead for policy-makers. International journal of health policy and management, 6(4), 195.
National Research Council. (2014). Financing long-term services and supports for individuals with disabilities and older adults: Workshop summary. National Academies Press.
Schmitz, A., & Giese, C. (2019). Is Insurance the Answer to the Long-Term-Care Financing Challenge? Generations, 43(1), 86-88.
Spetz, J., Trupin, L., Bates, T., & Coffman, J. M. (2015). Future demand for long-term care workers will be influenced by demographic and utilization changes. Health Affairs, 34(6), 936-945.
