NCPA - National Center for Policy Analysis

With Medicaid, Long-Term Care of Elderly Looms as a Rising Cost

September 13, 2012

As Medicare draws attention in the presidential race, many families worry about the long-term care provided by Medicaid. As baby boomers start to retire, families have less money for health care costs which force them to rely heavily on Medicaid, says the New York Times.

Long-term care, which includes nursing home and hospice services for seniors, makes up a significant portion of Medicaid spending around the country.

  • Medicaid spends five times as much on each senior in long-term care as it does on a poor child.
  • Nearly 32 percent of Medicaid's $400 billion in shared federal and state spending goes toward long-term care.
  • This is especially problematic for states like North Dakota, where spending on long-term care reaches nearly 60 percent.
  • Nursing homes cost, on average, $80,000 a year; 22 percent of those costs came directly out of pocket from individuals and families.

To qualify for Medicaid, a person can have no more than $14,800 in assets. For most middle-class families, this means that they have to pay out of pocket. Some families have been cited as spending over $300,000 in five years for nursing homes.

Federal and state governments are beginning to address the issue of costs of long-term care for seniors by proposing fundamental changes to the Medicaid system.

  • Twenty-six states have sought waivers to try and cut costs by giving privately managed-care organizations a fixed sum for a lifetime of care for a person, which includes doctor and hospital visits as well as nursing home placement.
  • In New York -- which has the biggest Medicaid budget in the country at $54 billion -- a proposed plan would have about 78,000 nursing home residents choose one of several managed care plans.
  • Finally, the federal government has proposed to replace Medicaid with block grants for states to spend on health care.

Source: Nina Bernstein, "With Medicaid, Long-Term Care of Elderly Looms as a Rising Cost," New York Times, September 6, 2012.


Browse more articles on Health Issues