Many Americans, their parents, and grandparents are in need of long-term services and support (LTSS) due to declining physical and mental health. The costs of this type of care can build over time and place an immense burden on the elderly and their families, especially because Medicare does not cover the price of LTSS.
Several different studies have pointed to the fact that the costs of long term care (LTC) have only increased and that research will be explored further in this article. More people than ever need assistance in their later years, but less healthcare workers are choosing to go into this particular field.
One might assume that LTC only refers to any sort of medical care that is administered over a long period of time. However, this is not strictly true. The term is used when speaking about a person who needs assistance completing otherwise normal daily activities. The American Action Forum lists six activities that qualify:
Those who have difficulty completing any of these daily activities may require LTSS. The patient might only have trouble with a few of them, or nearly all of them, but there is no specific number of these qualifiers that must be met in order for someone to require LTSS. Severe cognitive impairment is another condition typically associated with LTSS.
A 2020 study by the American Action Forum found that about 14 million people needed LTSS, and the number is only rising. They projected that LTC costs will reach as high as $2.5 trillion and that 24 million Americans will need LTSS by 2030. This is partially due to the fact that more people are living long enough to be affected by chronic illnesses and conditions, leading to an increased need in complex and long term medical care.
When looking at the cost of LTC, many insurance companies and data companies combine the total cost of services that were paid for and the estimated value of unpaid labor by family or friends because so many people simply can not afford to go to a healthcare facility. Even if someone does have insurance, many insurance companies have limited eligibility or coverage when it comes to LTC, so much of the payment must come out of pocket.
While Medicare does not cover most LTC, there are other programs that can aid those who need it. Medicaid is one of those programs and it covers more than half of the total spending for LTSS. A government study showed that Medicaid expenditures have increased every year since 2008 by at least 2%, indicating that there is a similar increasing need for this type of medical care each year.
Part of the increasing cost has to do with supply and demand issues within the healthcare system. By 2030, 1 out of every 5 U.S. citizens will be of retirement age because baby boomers will all be older than the age of 65. This means that more seniors will need healthcare more often, and likely for a longer period of time. This is true for general healthcare as well. As the population grows, so will the requirements for medical care. By 2058, the U.S. population is estimated to grow to a whopping 400-million people.
In addition to an expected decline in senior health, seniors who have chronic illnesses are expected to rise as well. Not only will these people need LTC, they will need complex care that takes a trained medical professional to administer it. Fightchronicdisease.org estimates that chronic disease could cost the country about $2 trillion on average per year alone. By 2030, the number of individuals with chronic diseases is projected to be at 83.4 million, as compared to 30.8 million people in 2015.
More seniors will spend at least some time in a nursing home, the cost of which is not cheap. Quality care is important, but difficult for most to find. This is exemplified by the 4 out of 10 seniors who will choose to spend their latter years in their own home instead of seeking the care home that they might actually need. However, if the person chooses to hire a healthcare provider to come to their home, the cost is high as well.
The cost of LTC for seniors often falls on their families and loved ones, but the financial stress impacts the wellbeing of the ill as well. A study by Health Affairs estimates that 14.4 million middle income seniors will be alive by 2029. Many of those, 60%, will require LTS. Many of the answers may lie in insurance solutions. Currently, most regular insurers, private or through an employer, will only help with the cost of certain LTC needs and the requirements are staggering.
For insurance companies, it is important to guide clients through the process and help them find the best insurance solutions for their LTC needs.