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Long-Term Care Out-of-Pocket Costs Higher Than Reported
By
Stephen Baetge
Staff Writer
The
costs of long-term care continue to increase, with many families
footing the bill by reaching into home equity, retirement savings
and personal finances to a greater extent than previously thought,
according to a recent study which included the costs of assisted
living – a key component of long-term care previously excluded
from many cost studies.
According to the U.S. Department of Health and Human Services (HHS), long-term
care includes a broad range of health and support services that people need as
they age or if they become disabled.
The majority of long-term care services consist of personal care or assistance
with the activities of daily living, which many families are able to provide
at minimal cost to their elderly loved ones.
As the care and support needs increase, however, paid care is usually needed
to supplement family-provided services and support.
According to HHS data, the average long-term care costs in the United States
for 2008 were $187 per day for a semi-private room in a nursing home; $209 per
day for a private room in a nursing home; $3,008 per month for care in an assisted
living facility; and $29 per hour for a home health aide.
In Sacramento, the average monthly cost for an assisted living facility is $2,716.00.
HHS expects these costs to increase as the population ages and medical expenses
rise.
A recent study by Avalere Health found that nearly 30 percent of long-term care
costs are paid out-of-pocket. The amount was a full 10 percent higher than reported
in widely-used previous estimates, which did not include spending on assisted
living.
The analysis found that individuals and their families contributed an estimated
$64 billion of their own funds out-of-pocket toward long-term care services in
2006.
In addition, families and communities played a central role in the nation’s
long-term care system by providing unpaid care valued at $350 billion. Private
health and long-term care insurance played a much smaller role, contributing
a little over $16 billion.
The study showed that most seniors and their families rely on home equity, income
from adult children or retirement savings to pay for these expenses.
This dismal economy has resulted in the loss of value by these asset classes,
resulting in diminishing funding capacity in the face of a rapidly growing long-term
care population.
Avalere also found that the long-term care need among individuals 85 and older
is nearly four times as high as the need in the population aged 65 to 84. The
proportion of those over age 85 is expected to be nearly one-fifth of the elderly
population by 2050.
“As we enter serious health reform discussions, we must recognize the extent
to which the system is held together by private financing and family contributions,” said
Anne Tumlinson, lead researcher of the analysis.
“Reform efforts will need to take a comprehensive look at how care is currently
financed and incorporate creative ways to support the growing needs of senior
care,” she concluded.
Funding for the research was provided by California’s SCAN Foundation,
a nonprofit think tank that seeks solutions to long-term care problems.
This page and its contents ©2009
Metropolitan News Company, Inc.
