About nine million people over the age of 65 will need long-term care this year, according to Medicare.gov, and that number is expected to rise to 12 million by the year 2020. Fortunately, thanks in part to the increasing demand as the baby boomer generation moves toward retirement, people with long-term care needs have more options today than in years past.
What Is Long-Term Care?
Long-term care is an umbrella term that refers to a wide range of medical and non-medical services for elderly individuals, as well as for those with disabilities or chronic illnesses. In most cases, long-term care helps people meet day-to-day health and personal needs like dressing, eating and bathing.
Long-term care comes in many different forms, including:
-In-home care: People who receive in-home care can continue living at home while getting the help they need from care providers who come and go on a regular basis according to the individual’s needs. Depending on the situation, in-home care may be limited to everyday tasks like bathing and eating, or may include more specialized health care services.
-Assisted living facilities: An assisted living facility is a group housing arrangement that provides on-site services for elderly and disabled individuals. Residents often have their own apartments and live relatively independently with easy access to the care they need.
-Nursing home care: Nursing homes are similar to assisted living facilities in that they provide on-site care to residents, but the level of care provided by nursing homes tends to be far more intensive. Typically, nursing home residents are older individuals who require constant care.
Costs of Long-Term Care
With increased options comes a greater need for careful long term care planning — but, unfortunately, most people are unprepared. According to a survey conducted by Lincoln Financial Group, only 44 percent of Americans have taken steps to plan for their long-term care.
In Pennsylvania, the median cost of in-home care is $19 per hour for homemaker services and $20 per hour for home health aide services, both of which are slightly above the national average. Meanwhile, the median cost of assisted living in Pennsylvania is close to average at $39,015 per year, and the median cost of nursing home care is well above average at $99,280, according to MarketWatch.com.
Although the task of planning and preparing for long-term care may seem overwhelming, there are a wide range of resources and options available to help create a plan that works for your circumstances. To discuss the type of care you want and create a plan for financing it, contact a certified elder lawyer experienced in helping clients plan for their long-term care.
Health and Human Services Secretary Kathleen Sebelius released an ambitious national plan to fight Alzheimer’s disease. The plan was called for in the National Alzheimer’s Project Act (NAPA), which President Obama signed into law in January 2011. The National Plan to Address Alzheimer’s Disease sets forth five goals, including the development of effective prevention and treatment approaches for Alzheimer’s disease and related dementias by 2025.
“This is a national plan—not a federal one, because reducing the burden of Alzheimer’s will require the active engagement of both the public and private sectors.”
In February 2012, the administration announced that it would take immediate action to implement parts of the plan, including making additional funding available in fiscal year 2012 to support research, provider education and public awareness. Today, the Secretary announced additional specific actions, including the funding of two major clinical trials, jumpstarted by the National Institutes of Health’s (NIH) infusion of additional FY 2012 funds directed at Alzheimer’s disease; the development of new high-quality, up-to-date training and information for our nation’s clinicians; and a new public education campaign and website to help families and caregivers in long term care planning and find the services and support they need.
To help accelerate this urgent work, the President’s proposed FY 2013 budget provides a $100 million increase for efforts to combat Alzheimer’s disease. These funds will support additional research ($80 million), improve public awareness of the disease ($4.2 million), support provider education programs ($4.0 million), invest in caregiver support ($10.5 million), and improve data collection ($1.3 million).
“These actions are the cornerstones of an historic effort to fight Alzheimer’s disease,” Secretary Sebelius said. “This is a national plan—not a federal one, because reducing the burden of Alzheimer’s will require the active engagement of both the public and private sectors.”
The plan, presented today at the Alzheimer’s Research Summit 2012: Path to Treatment and Prevention, was developed with input from experts in aging and Alzheimer’s disease issues and calls for a comprehensive, collaborative approach across federal, state, private and non-profit organizations. More than 3,600 people or organizations submitted comments on the draft plan.
As many as 5.1 million Americans have Alzheimer’s disease and that number is likely to double in the coming years. At the same time, millions of American families struggle with the physical, emotional and financial costs of caring for a loved one with Alzheimer’s disease.
The initiatives announced today include:
Research – The funding of new research projects by the NIH will focus on key areas in which emerging technologies and new approaches in clinical testing now allow for a more comprehensive assessment of the disease. This research holds considerable promise for developing new and targeted approaches to prevention and treatment. Specifically, two major clinical trials are being funded. One is a $7.9 million effort to test an insulin nasal spray for treating Alzheimer’s disease. A second study, toward which NIH is contributing $16 million, is the first prevention trial in people at the highest risk for the disease.
Tools for Clinicians – The Health Resources and Services Administration has awarded $2 million in funding through its geriatric education centers to provide high-quality training for doctors, nurses, and other health care providers on recognizing the signs and symptoms of Alzheimer’s disease and how to manage the disease.
Easier access to information to support caregivers–HHS’ new website, http://www.alzheimers.gov, offers resources and support to those facing Alzheimer’s disease and their friends and family. The site is a gateway to reliable, comprehensive information from federal, state, and private organizations on a range of topics. Visitors to the site will find plain language information and tools to identify local resources that can help with the challenges of daily living, emotional needs, and financial issues related to dementia. Video interviews with real family caregivers explain why information is key to successful caregiving, in their own words.
Awareness campaign – The first new television advertisement encouraging caregivers to seek information at the new website was debuted. This media campaign will be launched this summer, reaching family members and patients in need of information on Alzheimer’s disease.
Today’s announcement demonstrates the Obama administration’s continued commitment to taking action in the fight against Alzheimer’s disease.
In 2013, the National Family Caregiver Support Program will continue to provide essential services to family caregivers, including those helping loved ones with Alzheimer’s disease. This program will enable family caregivers to receive essential respite services, providing them a short break from caregiving duties, along with other essential services, such as counseling, education and support groups.
For more information on the national plan to address Alzheimer’s disease, visit: www.alzheimers.gov.
Costs for long term care insurance in 2012 have risen compared to the prior year and several insurers have filed for rate increases raising concern among consumers and consumer groups.
“No one likes to pay more so concern is understandable,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance, an industry trade group representing several thousand specialists who market LTC insurance. “But there is quite a bit of misinformation surrounding what’s taking place.”
To address the issue, the industry executive has been speaking with reporters, consumer representatives and making available association staff to discuss the matter with consumers. Slome appeared today on Martha Stewart’s radio network to explain what’s taking place.
“Historic low interest rates are the primary culprit and the Federal Reserve has indicated it plans to keep rates this low for the foreseeable future,” Slome notes. For every one-half percent drop in interest rates, a long term care insurance company needs a 15 percent premium hike to build up the needed capital to pay future anticipated claims.
Regarding the need for rate increases on existing long term care insurance policies, Slome explains it is never a take it or leave it proposition for the consumer. Insurers always offer an option by which the policyholder can continue to pay the same amount.
The Association executive points to a recent request for rate hike from a leading insurer. Policies affected are those offering a five percent automatic compound or simple inflation coverage, where benefits automatically increase by five percent each year for the life of the policy. “The company offers an option to reduce their future inflation percentage which allows people to avoid the rate increase altogether,” Slome says.
This is a prospective reduction in inflation; so all inflation additions previously applied to the policy will remain in place. “There is no reduction of their current benefit level,” Slome points out. “Only future inflation increases would be at a rate lower and the new inflation percentage offered as an option to customers will be in the range of 2.7% to 3.9%.”
Slome advises consumers with long term care insurance policies to speak with their agent regarding their concerns. “The protection is still incredibly important for people to have and valuable to those who need it,” Slome points out. “Last year, insurers paid over $6 billion in benefits to some 200,000 individuals who own long term care insurance. The largest open claim has surpassed $1.5 million and the policyholder paid less than $2,500 for their protection.” Some eight million Americans currently have some form long term care planning protection.
Long-term care as an employer-provided benefit continues to be a dwindling part of an employee’s overall health care benefits package, according to the results of a Long-Term Care (LTC) Benefits Program Pulse Survey announced today by HighRoads, the industry leader in employer health care compliance and benefits management. Key findings show that 51% of survey respondents provide long term care while 49% do not. About half of those who have dropped LTC say they did so because the insurance carrier offering the coverage has exited the market. On a positive note: 96% of companies who are offering LTC coverage say they will continue to do so.
In other key findings, the survey found that, of those who do not offer the coverage, some 40% plan to do so again in the future, on a voluntary arrangement, as opposed to a group basis.
HighRoads conducted the survey to assess current employer practices and future plans for offering long-term care (LTC) benefits programs to their employees. Respondents ranged in size from fewer than 5,000 employees to more than 50,000 employees. The majority of respondents have more than 10,000 employees.
“HighRoads’ survey indicates that long term care plans‘ coverage is continuing to be an endangered item for employees. The country has a growing number of retirees – many of whom will need some type of long-term medical care services in the future. It is a serious issue when insurers no longer are willing to provide this as part of an employee’s health benefits plan,” said Michael Byers, CEO, HighRoads. “With the elimination of the CLASS provisions from the ACA, which would have enabled working Americans to purchase coverage to supplement LTC and Medicare and pay for non-medical expenses to allow a disabled person to remain independent, millions of Americans will be left without a safety net should they become disabled,” added Byers.
According to data from the 2005 National Interview Survey and the 2004 National Nursing Home Survey conducted by the Health Policy Institute at Georgetown University found that over 10 million Americans need long-term services and support to assist them in life’s daily activities and that number is expected to grow with the aging of the population and growing number of people with disabilities.
The HighRoads survey found that more than 90% of the employers who offer LTC do so as an additional benefit to their employees. The remainder is equally divided between offering long term care as part of their overall health care strategy and being required by union contracts to offer this benefit.
Of the employers who responded 71% offer coverage on a group basis. The remainder offer it on an individual basis.
The world’s leading employers choose HighRoads to gain complete control over their health care costs and compliance. With HighRoads’ service, employers have online access to benefits plan information and pricing, competitive benefits benchmarks, and complete benefits management. The privately-held company is headquartered in Woburn, MA.
The question most frequently asked by consumers contacting the American Association for Long Term Care Insurance is, “will I really need long term care?”
“This is the first generation of Americans who in large numbers are living long lives,” explains Jesse Slome, executive director of the national trade group. “As a result, it really is the first generation exposed in very large numbers to the huge financial and emotional toll resulting from living into your 80s, 90s and even past age 100.”
According to the Association, few individuals can accurately predict how long they will likely live. “They’ll say until age 67 when the reality is that they will likely live to age 87,” Slome explains.
To provide greater access to information to consumers, the Association has added information to it’s Consumer Learning Center with links to leading online life span calculators and long term care quotes. “We urge all adults over the age of 55 to take five minutes to see how long they may live,” Slome urges. “We think many will be surprised though they may then realize they are not prepared.”
According to the long term care insurance trade group, the vast majority of new long term care insurance claims begin after individuals reach the age of 70. “Two thirds of new claims begin after age 80 but you can only purchase long term care insurance when you are still able to medically health qualify,” Slome notes. The organization’s recommended ages to start planning fall between ages 55 and 64.
A 55-year-old couple purchasing long-term care insurance protection can expect to pay $2,700-per-year (combined) for about $340,000 of current benefits which will grow to over $700,000 of combined coverage when the couple turn age 80.
According to the 2012 National Long-Term Care Insurance Price Index published by the American Association for Long-Term Care Insurance (www.AALTCI.org) prices for long-term care insurance policies currently being offered are between six and 17 percent higher than comparable coverage a year ago. “Insurance prices have increased as a result of the historic low interest rates and yields on fixed income investments,” explains Jesse Slome, AALTCI’s executive director. Between 40-and-60 percent of the dollars an insurer accumulates to pay future claims comes from investment returns.
The Association annually analyzes what consumers will pay for the most popular policies offered by 10 leading long term care plans. The study found that the average cost for a 55-year old single individual who qualified for preferred health discounts is $1,720 for between $165,000 and $200,000 of current coverage. In 2011, the same coverage would have cost an average of $1,480 annually.
In addition to across the board increased rates, the Association found that the spread between the lowest cost and the highest cost policy had increased compared to the prior year. “For the 55-year-old single policy applicant the highest price policy cost almost 80 percent more than the lowest priced policy,” Slome noted. “For some categories, the difference was as much as 132 percent and no single company always had the lowest nor the highest rate which is why we stress the importance of comparison shopping.”
The Association study examined prices for single individuals age 55 as well as couples, ages 55, 60 and 65. According to the report, a 60-year old couple purchasing the same level of protection ($340,000) could expect to pay about $3,335 -per-year if both spouses qualified for preferred health discounts. The preferred health discount would save them approximately $500 compared to standard health rates and are a good incentive to act at younger ages, Slome points out. “The available benefit pool for the 60-year-old couple would only grow to about $610,000 when the couple turns 80,” Slome notes. “To have future coverage of $700,000, equal to what the 55-year-old couple would have, they will have to buy a higher, more expensive policy,” Slome explains.
The Association priced policies that included a three percent compound inflation growth factor. “You want the value of the benefit you buy today to grow to keep pace with rising costs,” Slome noted. A policy valued at $170,000 for each policyholder would grow to roughly $300,000 in 20 years. “Married couples have the option of buying policies with a “shared care rider” meaning the combined benefits can be used by either spouse or spouse or split between them.
“For roughly 15-to-25 percent more, instead of having having access to a benefit pool of $350,000, either spouse has access to a combined pool in excess of $700,000,” says Slome. “The ability to purchase a more affordable shorter duration policy but have access to a much larger combined pool of dollars is easy to explain and of great value to the buyer.”
“Over 70 percent of people today buy a 3-to-5 year benefit period,” states Larry Moore, Director of Marketing for American Independent Marketing, a leading national marketer. “When you factor in discounts available to couples, good health discounts and some of the lower-cost inflation options, long-term care insurance can be far more affordable than many people think.”
The complete 2012 Price Index will be published in the Association’s 2012 Long-Term Care Insurance Sourcebook. For more information, visit the American Association for Long-Term Care Insurance’s website at http://www.aaltci.org or call (818) 597-3227.
Every day, over 10 million frail seniors, younger people with disabilities, and their families struggle to find and pay for long-term care to stay independent and remain at home, and the need for care is expected to grow to over 15 million Americans by 2020.
Yet, the issue of long-term care has been completely absent from this year’s presidential campaign. No questions have been asked during the debates. The candidates have not posted any views or positions on their websites, and only two candidates have responded to a national survey on their views to address this growing national challenge.
Long-term care helps older adults and individuals with disabilities manage everyday activities, such as dressing, bathing, using the bathroom, preparing meals, and taking medication.
While these home care services are cost-effective and help people stay independent and out of expensive nursing homes, they are not covered by traditional health insurance. Medicare does not cover them, and only 3% of adults have private long-term care insurance.
Medicaid offers some coverage for long term care, but individuals must spend-down and impoverish themselves to qualify – often exhausting a lifetime of savings. Waiting lists also have doubled over the past decade, with some states cutting home and community-based services to trim budgets.
As a result, over 90% of all long-term services provided today are delivered informally by more than 42.1 million family members. These caregivers often face enormous burdens, adversely affecting their health, ability to work, and financial security.
To help raise this critical issue among the presidential candidates, 15 national aging and disability organizations, including the National Council on Aging (NCOA), invited each candidate to answer five questions about their views on long-term care. The questionnaire was distributed in November to all major candidates for President, regardless of political party affiliation.
So far, only two presidential candidates-Barack Obama and Newt Gingrich-have responded to the questionnaire. The five questions and responses received to date are available at http://www.ncoa.org/LTSSsurvey.
“The number of Americans needing long-term care is expected to double in the coming decade as the population ages,” said James Firman, NCOA president & CEO. “Clearly, this is an issue that cannot be ignored. Voters deserve to hear the candidates engage in a dialogue about an issue so central to the future of our country and the lives of millions of individuals and families.”
The National Council on Aging is a nonprofit service and advocacy organization headquartered in Washington, DC. NCOA’s mission is to improve the lives of millions of older adults, especially those who are vulnerable and disadvantaged. NCOA is a national voice for older Americans and the community organizations that serve them. It brings together nonprofit organizations, businesses, and government to develop creative solutions that improve the lives of all older adults. NCOA works with thousands of organizations across the country to help seniors find jobs and benefits, improve their health, live independently, and remain active in their communities.