All this talk of late about promoting wellness and disease management as a way of controlling healthcare costs and helping people live longer, healthier lives got me wondering who is going to take care of all us old folks when our bodies start breaking down in the future.
The number of Americans aged 85+ alone (an indicator of long-term care demand) is expected to reach 21 million by 2050, up from just 4 million in 2000. Right now, something like 10 million people require LTC at any given time. The majority are cared for by unpaid help (e.g., children taking care of their parents at home); a smaller number are cared for at home by paid help; and only around 13% or so are in nursing homes. While numbers vary (I pieced the above together from the Urban Institute, Census Bureau and CDC’s National Nursing Home Survey), you can expect all of the above to increase substantially in the years ahead.
Who pays now — and who will pay in the future when there are too many old people (like me) and too few children to care for us?
The bulk of paid LTC services is funded out-of-pocket or by Medicaid; Medicare pays a smaller portion.
Only a tiny percentage of LTC is paid for by private insurers. That’s largely because LTC insurance remains a niche product aimed at helping the relatively wealthy and upper middle class protect their assets. According to the American Assn. for Long-Term Care Insurance, about 180,000 people received LTC benefits in 2008 (out of 8.25 million covered under LTC insurance). Total LTC premiums in 2008 were about $20 billion and claims expense was about $8.5 billion.
Leading insurers are Genworth, John Hancock, MetLife, Prudential and Mutual of Omaha. There are also 27 state public-private partnerships, in which individuals purchase private LTC insurance and receive some level of asset protection in case they exhaust their benefit and have to apply for Medicaid.
All of which suggests to me an expanded government role in the future to help fund LTC for an aging nation. The only question is at what cost to taxpayers.
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