1. Cynthia K. Wrona
HSM410 Policy Paper:
The Impending U.S. Long-Term Care Crisis
Professor Alan Fowler
August 26, 2006

2. The Impending Long-Term Care Crisis
I. Introduction
There is a crisis looming on the U.S. health care horizon. It is the impending long-
term care crisis. By the year 2030, there will be 70 million U.S. citizens age 65 and older.
5.2 million of them will be over age 85 with a severe disability requiring long-term care.
(Bodenheimer & Grumbach, 2005) Only those who are either penniless, very wealthy, or
covered by long-term care insurance will be able to afford the care they need. According
to the Health Insurance Association of America, “more than 82 million Americans over the
age of 45 do not have any financial protection against the potentially impoverishing
impacts of long-term care.” (mrltc.com) To that end we must raise awareness of, and
enrollment in, long-term care insurance plans.
The other consideration in this crisis though is that, with the aging of our population,
the healthcare workforce will not be prepared to support the crush of this impending patient
load. Patients, hospitals, insurers, caregivers, AARP, the U.S. Senate Special Committee
on Aging; these are all key players in this healthcare dilemma, working feverishly to
develop plausible solutions to the problem before it is too late.
II. Policy Goals
The goal of these players is clear: raise awareness of the issue now in order to ensure
better protection of our citizens and our healthcare system in the future. The first step in
that regard is to expressly define the types of long-term care and the limitations of their
coverage. Long-term care is a misunderstood and often misinterpreted term. Specifically,
(APA format used)
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3. The Impending Long-Term Care Crisis
“Long-term care includes those health, social, housing, transportation, and other supportive
services needed by persons with physical, mental, or cognitive limitations, sufficient to
compromise independent living”. (Bodenheimer & Grumbach, 2005) That refers to
activities such as bathing, dressing, meal preparation, and eating, which are termed
“activities of daily living” (ADL). The U.S. Senate Special Committee on Aging adds that,
“It differs from other types of health care in that the goal of long-term care is not to cure an
illness, but to allow an individual to attain and maintain an optimal level of functioning….”
(caregiver.org) It is a common misconception that most people are covered for this type of
care through Medicare or Medicaid. If a patient has “spent down” all their assets in order
to qualify for Medicaid coverage, then only nursing home care would be covered and only
at a rate of approximately 43%. (Bodenheimer & Grumbach, 2005)
The typical cost for a nursing home by the year 2020 will be $336 per day (that’s
$122,640 per year). (nursingworld.org) Nursing home conditions are that of “close
quarters where dementia abounds, [being] totally dependent upon underpaid, inadequately
trained staff where the lack of independence and companionship leads to a sense of futility
and a very poor quality of life”. (Bodenheimer & Grumbach, 2005) Medicare, on the other
hand, is quite the opposite of basic nursing home care. It covers only skilled care like
wound dressings and speech therapy, for example. Therefore, it does not cover long-term
ADL care. Medicare covers only approximately 17% of all long-term care costs in the U.S.
“Medicare was never designed to pay for long-term care and custodial services. The limited
scope of Medicare coverage is a problem now and will be a greater problem in the future.”
(nursingworld.org)
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4. The Impending Long-Term Care Crisis
New legislation by the U.S. Senate Special Committee on Aging reinforces notion
of the limited scope of Medicare: “As our nation’s population ages, our ability to pay for
programs such as Medicare and Medicaid will be stretched to the limit…We must begin to
educate the public about the importance of planning for long-term care to ensure future
generations of retiring Americans are able to meet their health care needs.”
(aging.senate.gov). Abysmal Medicaid and Medicare statistics alone should be enough to
peak the concern of U.S. citizens.
A third type of coverage for long-term care is that of private long-term care insurance.
According to The American Society on Aging, “…each person who purchases a long-term
care insurance policy saves the federal government about $6,600 in future spending -
$5,000 for Medicaid, and $1,600 for Medicare.” (mrltc.com) This type of coverage should
be purchased at a younger age (40’s or 50’s) since the premiums are experience-rated.
That means older Americans will pay the highest premiums and, since they normally live
on a fixed income, they usually cannot afford them. The problem is that younger people
see old-age as such a long way off that they don’t think they need this type of coverage.
Long-term care coverage plans can include things like benefits for adult day care,
respite care, and custodial services such as personal care, homemaking, and chore services.
Care can be provided in a nursing home, in an assisted living facility, or most importantly,
at home. This is one area where awareness must be raised since currently, this type of
coverage finances only 10% of all long-term care costs in the U.S. (Bodenheimer &
Grumbach, 2005) Financial Planner, Jeffrey D. Voudrie states that, “ignoring the potential
need for LTC [insurance] is the wrong decision…many families are already finding
themselves caught in the nightmare of having to provide care that isn't covered by
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5. The Impending Long-Term Care Crisis
insurance or the government. This problem will not go away, as the government is likely to
cover even less care in the future. [Voudrie] advises families to take action now.quot;
(ezinearticles.com) Reverse mortgages and accelerated death benefit riders on life
insurance policies are other ways to finance long-term care. Which ever method is used to
finance it, Barbara Edlund of Nursingworld.org sums it up best by saying, “There isn’t
enough money for any type of public program, or expansion of existing programs, to pay
for long-term care for everyone; and that long-term care is a personal responsibility that
requires planning ahead.” (nursingworld.org)
Yet another factor in this impending crisis is the effect it will have on the workforce
of our healthcare system. With the aging of our population, the number of citizens who
will require long-term care is preparing to skyrocket. The number of the people in the
workforce, on the other hand, will be shrinking. Harvard University JFK School of
Government poses the question, “Who will care for us?” (harvard.edu) “Long-term care
providers report unprecedented vacancies and turnover rates for paraprofessional workers.
Increasingly, the media, federal, and state policymakers and the industry itself are
beginning to acknowledge the labor shortage crisis and its potentially negative
consequences for quality of care and quality of life.” (harvard.edu) According to the
Online Journal of Issues in Nursing, “The number and proportion of older Americans are
rising rapidly and are expected to increase into the middle of the 21st century. These
changing demographics will have a tremendous impact on the delivery of health care.”
(nursingworld.org) Furthermore, The Urban Institute, a social policy research organization
states, “The severe shortage of nursing assistants, home health and home care aides, and
other paraprofessional workers is the primary trend influencing the current wave of concern
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6. The Impending Long-Term Care Crisis
about the long-term care workforce. National data on turnover rates…suggests that
turnover rates average about 45 percent for nursing homes and about 10 percent for home
health programs, while other data place average annual nursing home turnover at over 100
percent a year. High rates of staff vacancies and turnover have negative effects on
providers, consumers, and workers: The cost to providers of replacing workers is high;
quality of care may suffer; and workers in under-staffed environments may suffer higher
rates of injury.” (urban.org) Even if we found a solution to the financial aspect of the
long-term care dilemma, it would be meaningless without a resolution to the workforce
aspect of the crisis.
III. Solution Proposals
So what is the solution? There are actually several solutions required to alleviate
these problems. We should begin in the customary place; with the individual. It is each
individual’s responsibility to protect themselves – and their loved ones – for the future.
We cannot depend upon the government for help in this arena. We must educate ourselves.
We should explore the long-term care coverage options available and make the investment
now. Time is money in this regard for the longer we wait, the higher the rates will be.
Secondly, let’s expand upon Medicare coverage to include not only skilled at-home
care, but custodial ADL care, as well. That way all the grown children that would be
willing to quit their jobs to stay home and take care of aging parents would be able to do
so. There are options such as “consumer directed home care” whereby these care-givers
could be paid a salary, allowing them to quit their jobs. (urban.org) This would benefit the
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patients, who have much greater outcomes when cared for at home, it would be less of a
strain on the healthcare workforce, and it would also be less expensive than other options.
IV. Policy Analysis
AARP has begun a strong push to advocate community based long-term care
services to help alleviate the problem. The first two items on their 2006 State Budget
Legislative Agenda are “Funding of key long term care programs, especially those related
to community based care services, and, Funding for the Long Term Care ombudsman
program”. (aarp.org) As a result of their Family Caregiver Focus Groups, AARP in my
home state of Georgia has expanded its respite, community care (CCSP), transportation,
and emergency back-up services for family caregivers. (georgia.gov) Perhaps local area
hospitals might take their cue from AARP and mirror this program in all states.
A more broad-range version of the community based program is the San Francisco-
based On Lok program. On Lok (which is Chinese for “peaceful, happy abode”) was the
first organization ever in the U.S. to assume full financial risk for care of the elderly using
capitation payments from Medicare and Medicaid. The On Lok system integrates total care
of patients with services like: “adult day services, in-home care, home delivered meals,
housing assistance, comprehensive medical care, respite care for caregivers, hospital care,
and skilled nursing care”. (Bodenheimer & Grumbach, 2005) On Lok accomplishes all this
for approximately one-third the usual cost of health care expenditures and only 15% of
their patients ever spend time in a nursing home. (Bodenheimer & Grumbach, 2005) This
program should be widely replicated across the country.
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8. The Impending Long-Term Care Crisis
Finally, we should develop incentives to attract people to the health care workforce
and keep them there. As stated above, the turnover rate, especially in the nursing home
environment, is staggering. This is due, in part, to the stigma of the job. “One important
influence on individuals’ decisions to enter and remain in the long-term care field is how
society values the job. Frontline worker jobs in long-term care are viewed by the public as
low-wage, unpleasant occupations that involve primarily maid services and care of
incontinent, cognitively unaware old people. This image is exacerbated by media reports
that feature poor quality care by providers.” (urban.org) Possible ways to overcome this
problem might be to make the job more appealing or ease the hiring restrictions. “One
major policy issue for workforce development is the extent to which states allow nursing
assistants to perform certain tasks currently performed by nurses (e.g., administering
medications or providing wound care). Giving frontline workers added responsibility and
autonomy may motivate them to remain in the job or encourage others to seek these
positions. Given the current labor shortage and gloomy projections about the future pool of
workers, many providers have expressed interest in immigration as a tool for expanding the
potential labor pool.” (urban.org)
V. Conclusion
Other programs such as tax incentives, flexible spending account changes, and life-
care annuities can also make a change. All of these programs implemented together would
greatly improve the U.S. healthcare system. However, if we had to choose only one of
these options, short of implementing a universal system of healthcare coverage, I would
propose wide expansion of the On Lok system. If they can care for so many citizens, with
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9. The Impending Long-Term Care Crisis
such thorough horizontal integration, for such a low cost with such good results…well are
those not the very goals we seek for a successful health care system? The On Lok system
also succeeds where the other suggestions do not. In comparison to the long-term care
insurance suggestion, most people can afford the On Lok system, where many cannot
afford long-term care insurance. In comparison to the “custodial care” option, not
everyone has family members nearby or with the ability to care for them at home. In
comparison to the AARP initiatives, their goals are positive ones but the success of those
goals is yet to be determined. Finally, the workforce suggestions are also important.
However, if the On Lok system is as successful as it appears, it will automatically attract a
higher quality, and quantity of new people to the healthcare workforce, thereby alleviated
the shortage of workers.
So there you have it. Crisis diverted. Let us subscribe wholly to the On Lok
system of “peaceful happy abodes” and say farewell to the notion of the “tragedy of
chronic illness compounded by the failure of our nation’s healthcare system to meet our
needs”. (Bodenheimer & Grumbach, 2005).
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References
Bodenheimer, T.S., & Grumbach, K. (2005). Understanding health policy (4th ed.). New
York: McGraw-Hill.
Edlund, B., Lufkin, S., Franklin, B., (2003). Long-term care planning for baby boomers:
addressing an uncertain future. Online Journal of Issues in Nursing. Vol. #8 No. #2,
Manuscript 2. Retrieved August 20, 2006 from
www.nursingworld.org/ojin/topic21/tpc21_2.htm
Smith, G.H. (2006). Americans must better prepare for long-term care needs. Press
Releases and Articles. Retrieved August 19, 2006 from the World Wide Web:
http://aging.senate.gov/public/index.cfm?
FuseAction=PressReleases.Detail&PressRelease_id=532
Bayne, M. K. (2006). Long term care insurance (ltci) leader John Hancock introduces ltci
in Puerto Rico. Retrieved August 19, 2006 from the World Wide Web:
http://www.mrltc.com/press-releases-ltc-legislation.html
Family Caregiver Alliance. (2005). What is long-term care? Selected Long-Term Care
Statistics. Retrieved August 19, 2006 from the World Wide Web:
http://caregiver.org/caregiver/jsp/content_node.jsp?nodeid=440
Stuart, G. (2006). Long-term care insurance: security for Americans. Retrieved August 19,
2006 from the World Wide Web:
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http://www.ezinearticles.com/?Long-Term-Care-Insurance:-Security-for-
Americans&id=265497
Stone, R.I., & Wiener, J.M. (2001). Who will care for us? Addressing the long-term care
workforce crisis. Retrieved August 19, 2006 from the World Wide Web:
http://www.innovations.harvard.edu/showdoc.html?id=3325
AARP. (2006). AARP New York’s 2006 state legislative agenda. Retrieved August 19,
2006 from the World Wide Web:
http://www.aarp.org/states/ny/
ny-advocacy/aarp_new_yorks_2006_state_legislative_agenda.html
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