By: Dale Krause, J.D., LL.M.
After more than 25 years in elder law I have learned that with the wave of baby boomers approaching retirement there will be an unprecedented demand for professional long-term care services. These services include those provided by home health care agencies, assisted living facilities, and nursing homes. With the increased demand prices for the services are likely to skyrocket making them unaffordable to most. With people living longer their risk for age related impairments increases. Statistics show that one in eight Americans over age 65 have Alzheimer’s disease1 and nearly half of Americans over age 86 have the disease, which often requires long-term care services.
What is Long-Term Care?
Long-term care is provided when an individual requires assistance performing activities of daily living due to a disability or old age. Statistics also show that 75% of seniors will require long-term care during their lifetime with more than 50% requiring at least one year of care and 20% requiring more than five years of care. As a result, seniors are consuming national resources at an unprecedented rate, especially those for long-term care. This all comes at a cost.
What Does it Cost?
According to the 2011 Genworth Financial Cost of Care Survey long-term care costs have significantly increased from year to year. The survey also indicated that the average hourly rate of a licensed home healthcare aide was $19, while the average monthly rate of a one-bedroom unit in an assisted living facility was $3,261, and the average monthly rate of a semi-private room in a nursing home facility was $5,790. With these high costs families are finding it difficult to privately pay and are turning elsewhere for relief.
Who Pays for it?Neither health insurance nor Medicare pays for traditional long-term care services. In fact, Medicare only pays for skilled care which always includes hospital and physician charges and can only last up to 100 bed days. Compared to the number of individuals needing services very few have planned ahead and purchased any type of long-term care insurance. Therefore, personal resources are primarily used to pay for long-term care services provided in the home or in an assisted living facility while Medicaid pays approximately 49% of long-term care services provided in a nursing home. Thus, “Medicaid is the nation’s largest health care program2.”
What is Medicaid?
The Medicaid program was created in 1965 and is a joint federal-state program which means that the federal government provides general guidelines and the states are required to follow them. Thus, a state agency considers Medicaid applications, makes qualification determinations, and publishes regulations interpreting federal law. Because no other government programs provide long-term care benefits, Medicaid “has become the default nursing home insurance of the middle class3.”
1 This information was obtained from the 2011 Genworth Financial Cost of Care Survey.
2 National Governor’s Association, supra note 6, at 1.
3 ElderLawAnswers, Medicaid (Introduction).