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LTC Bullet:

Monday November 6, 2000


Robyn Stone has produced a report for the Milbank Memorial Fund that we want to bring to your attention. It contains some well-documented data and analysis that anyone who advises seniors on long-term care will find useful. Best of all, the report is relatively objective and balanced, which is a surprise given Stone's reputation as a critic of private long-term care insurance and an outspoken advocate of government financed health care. She served on both the Pepper Commission and Hillary Clinton's health care task force. Dr. Stone is currently Executive Director of the American Association of Homes and Services for the Aging's Institute for the Future of Aging Services.

What follows, at some length, is information on how to obtain the full report, excerpts to pique your interest, and a comment or two from us. We will not cite much of the financing data in the report, because most of it is out-dated and more current information is readily available at and other websites.

Bibliographic reference: Robyn I. Stone, "Long-Term Care for the Elderly with Disabilities: Current Policy, Emerging Trends, and Implications for the Twenty- First Century," Milbank Memorial Fund, New York, 2000. Copies of the report may be requested from the Milbank Memorial Fund, 645 Madison Avenue, 15th Floor, New York, NY, 10022, (212) 355-8400, e-mail:; an electronic version is available on the web at


“Policymakers now face three significant questions: (1) Who should pay for long-term care, and how? (2) How should services to elders with disabilities and their families be designed, and who should deliver them? (3) How can the labor force delivering that care be recruited, trained, and maintained?” (p. 1)

“Among those aged 85 and over, 21 percent were in nursing homes in 1995 and another 49 percent were community residents with long-term care needs (Figure 2; Alecxih 1997a).” (p. 7)

“The proportion of elders likely to use nursing homes ranges from 39 percent to 49 percent, depending on the database; estimates of those living in a nursing home for at least two years after age 65 range from 16 percent to 25 percent (Alecxih, 1997a, Murtaugh et al., 1990).” (p. 10)

“At any given time, slightly more than 10 percent of people over age 65 live in the community and need some degree of long-term care. Another 5 percent are in nursing homes. After age 65, almost half of all Americans will spend some time in a nursing home.” (p. 11)

"The importance of an informal support system is underscored by the fact that 50 percent of elderly people with long-term care needs who lack a family network live in nursing homes, compared to only 7 percent of those who do have family caregivers (National Academy on Aging, 1997).” (p. 12)

“According to the 1994 National Long-Term Care Survey, more than seven million Americans--mostly family members--provide more than 120 million hours of unpaid care to elders with functional dis- abilities living in the community. If these caregivers were paid, the cost would run from $45 billion to 94 billion a year (ASPE and AoA, 1998).” (p. 12)

“Thirty-six percent of informal caregivers are adult children. Forty percent are spouses; the prevalence of spousal caregiving increases with the level of the recipient’s disability.” (p. 12)

“The average age of the informal caregiver is 60.” (p. 13)

“Nearly half of female caregivers with part-time paid jobs report working less because of elder care responsibilities.” (p. 13)

“In 1997, an estimated 89.4 percent of nursing aides were female (BLS, 1998a). . . . 96 percent of those employed by agencies, and 100 percent of the self-employed, were female (Leon and Franco, 1998).” (p. 14)

“In 1995, approximately $106.5 billion was spent on long-term care. Public resources accounted for 57.4 percent of it. The largest part of public funds, 37.8 percent, came from Medicaid (inclu- ding 21.1 percent federal and 16.7 percent state dollars).” (p. 16)

[CLTCF Comment: this data is not only old, but also misleading. A significant proportion of so- called private long-term care expenses or "out of pocket" costs is really only Social Security income contributed by Medicaid recipients toward their cost of care, as opposed to spend down of assets or savings.]

“In fact, 35 percent of all Medicaid spending on home care in the United States in 1995 occurred in New York (Kenney et al., 1998).” (p. 17)

“Many observers have argued that elderly people are unprepared for long-term care expenditures because they believe that Medicare will cover them. In reality, Medicare primarily covers acute care costs. . . . However, the belief that Medicare covers long-term care has more validity now than in the past. Through a series of regulatory and administrative changes since 1989, Medicare has come to support more long-term, nonskilled personal care (Komisar and Feder, 1998).” (p. 18)

“There is also some evidence to suggest that providers participating in Medicaid home care programs are being encouraged by states to help their clients become eligible for Medicare home health benefits in order to reduce state costs for long-term care. . . . New York and Minnesota have explicit Medicare ‘maximization’ policies.” (p. 20)

“Controversy has raged around private long-term care insurance for the last decade. The private sector argues that public programs will never meet the demand. Consumers and regulators express concern about high premiums and fraudulent marketing practices.” (p. 22)

“It is somewhat ironic that homes for the aged, board and care home, and other types of residential care were replaced in the late 1960s and 1970s by nursing homes modeled after hospitals. . . . One recent study estimates that anywhere between 15 and 79 percent of the nursing home population, nationwide, could live in residential care instead (Spector et al., 1996).” (pp. 30-31)

“Today’s professional and paraprofessional workforce is woefully unprepared to meet the long-term care needs of an aging society. This problem is likely to worsen as the baby boomers age in the first half of the new century.” (p. 38)

“The shortage of paraprofessional workers--cer- tified nursing aides in nursing homes and home care aides--is currently a crisis for long-term care providers. . . . Paraprofessionals are among the worst paid workers in the service sector (‘Who Makes What,’ 1998). Unattractive job features include low wages and benefits, lack of career advancement, high potential for injury, and exposure to much emotional stress. According to National Occupational Employment and Wage Data for 1996 (BLS, 1997), the median hourly wage was $7.46 for nursing assistants, $7.51 for home health aides, and $6.48 for personal and home care aides.” (p. 39)

“The extent to which these added years will be free of disability is subject to debate. . . . Some researchers argue that medical advances have increased life expectancy but have not delayed the onset of illness (GAO, 1994). They predict that declining death rates may actually increase long-term care needs if, for example, more people live long enough to develop age-related conditions such as dementia or live longer with existing disabilities.” (p. 42)

“One gross measure of the availability of informal caregivers is the ratio of the population in the average caregiving range--ages 50 to 64--to the population aged 85 or older. In 1990, that ratio was 11 to 1; by 2050, there will be only four potential caregivers for every elderly person (RWJF, 1996).” (p. 48)

“Today, one out of eight older people has an income below the official poverty line (Smith, 1997)--although after adjustments for the value of non-cash benefits, such as food stamps, Medicaid, and the implicit rental value of housing, only one out of 20 elders is poor at present.” (p. 51)

“A recent survey of Americans aged 42 and over found that only 12 percent think that they or their spouses are very likely to require long-term care; only 11 percent feel that they are very likely to require assistance with daily activities (Greenwald, 1998). Ignorance about who pays for long-term care is still common. Almost three out of four respondents to a recent survey believe that Medicare is the primary funding source for most older persons’ services, and 48 percent report they have done little or no long-term care planning (National Council on Aging, 1997b).” (p. 55)

“Several key points can be drawn from this discussion of long-term care financing:

*“Financing in the United States will continue to be a patchwork of public and private sources with no uniform public policy to provide a framework.

*“Medicaid will continue to be the primary source of public funding for long-term care, perpetuating wide variation in long-term care options available to elders with disabilities from state to state.

*“Private long-term care insurance will continue to cover a small proportion of those at risk for needing long-term care. An employer-based group market is not likely to grow substantially in the near future.

*“The federal and state governments will rely increasingly on the tax code to achieve incremental reform, including tax credits for caregivers and care recipients and tax breaks to encourage the development of a private insurance market.” (p. 65)

[CLTCF Comment: All of these points are true unless the government does something to shake things up, remove the perverse incentives in public policy that sustain the status quo, and encourage individual responsibility while reducing welfare dependency for long-term care. We suggest the Center for LTC Fnancing's "LTC Choice" proposal as the instrument of change.]

“Whether we like it or not, long-term care is coming of age. It will be one of the major challenges of the twenty-first century. We can wait for the crisis to hit, or we can actively develop financing, delivery, and training strategies that build on the lessons learned from the successes and failures in our own country and other nations--strategies that strike the right balance between public and private resources and that recognize that the long-term client and family must be directly involved in the process of care.” (p. 73)

[CLTCF Comment: Hear, hear! You can download a free version of LTC Choice: A Simple, Cost-Free Solution to the Long- Term Care Financing Puzzle" in PDF Format, at LTC Choice