NCPA - National Center for Policy Analysis

Long-Term Care: Expectations vs. Reality

February 3, 2015

A new report from Health Affairs reveals that Americans' perceptions of their future need for long-term care differ markedly from reality. According to the study:

  • Sixty percent of adults aged 40 to 65 believed that they would not likely need long-term care services, despite that 70 percent of adults will most likely need long-term care services in the future.
  • Americans who reach the age of 65 have a 46 percent change of spending time in a nursing home.
  • One-third of adults above the age of 40 have not made plans to pay for long-term care services.

This is significant not just for people's own long-term health costs but for America's federal-state health care program for the poor: Medicaid. The Health Affairs report notes that Medicaid pays for two-thirds of all long-term care services in the United States. In fact, NCPA Senior Fellow Pam Villarreal recently authored a report on this very subject. Looking specifically at Wisconsin, whose elderly population is growing faster than the rest of the nation, Villarreal highlighted the role of Medicaid in covering long-term care costs -- in 2014, just 7 percent of Wisconsin Medicaid enrollees were receiving long-term care services, yet the state spent 40 percent of its Medicaid dollars on long-term care.

Of course, taxpayers ultimately shoulder the burden of Medicaid costs. Villarreal offered a number of suggestions that would improve long-term care, one of which was encouraging and allowing for home care instead of institutionalized care whenever possible, as the former is generally much less expensive. For example, the median annual cost for a semi-private nursing home room in Wisconsin is more than $87,000, and for a private room, the cost is more than $97,000. Compare this to a home health aide, whose median annual cost in Wisconsin is $50,336.

Source: Carrie E. Henning-Smith and Tetyana P. Shippee, "Expectations About Future Use Of Long-Term Services And Supports Vary By Current Living Arrangement," Health Affairs, January 2015; Pam Villarreal, "Improving Long-Term Care in Wisconsin," National Center for Policy Analysis, November 2014.


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