PPA 419 – Aging Services Administration Lecture 6a – Long- term Care and Medicaid

Introduction Long-term care services provide assistance to individuals with difficulties in – Activities of daily living (ADLs) Eating, bathing, dressing, getting in and out of bed, using the bathroom – Instrumental activities of daily living (IADLs) Housework, laundry, shopping, taking medication, transportation.

Introduction Characteristics of community-dwelling elderly with substantial long-term care needs (6.4 million) – 9% over 85 – 29% below 150 percent of poverty – 28% fair or poor health – 31% alone, 56% married, 13% with others.

Introduction Characteristics of nursing home residents (1.6 million) – 72% female – 49% 85+ – 64% Medicaid coverage – 83% need assistance with 3+ ADLs – 70% memory loss.

Impact of Sociodemographic Change on the Future of Long-Term Care Introduction – Sociodemographic change can have an impact on both the potential demand for long-term care and the supply of workers available to provide this care. – Population projections indicate that the sheer volume of those likely to demand long-term care, along with age distribution, racial and ethnic mix, and education level will change over the next fifty years. – Long-term care includes institutional services, paid home- and community-based care, and unpaid support through family and friends.

Impact of Sociodemographic Change on the Future of Long-Term Care Long-Term Care Users – The probability of long-term care increases as one gets older, particularly after age 75.

Impact of Sociodemographic Change on the Future of Long-Term Care Long-term Care Users (contd.) – Majority of long-term care users (60%) are elderly. – Higher probability of using long-term care Female Black Widowed or never married Less than a high school education

Impact of Sociodemographic Change on the Future of Long-Term Care Long-term Care Users (contd.) – 40 percent use only informal care (friends and family). Men Minorities Married individuals Less education – Nursing facility care Female Non-minorities Widowed over never married

Impact of Sociodemographic Change on the Future of Long-Term Care Effects of Change on Demands for Care – The Baby Boom bulge Population 65 and over will double by Most rapid growth between will drop from 28% to 23% of elderly between 2005 and 2020, but will jump to 34% by Number with at least one ADL limitation will increase from five million to eleven million by 2050, while those with two limitations will increase from 2.0 million to 4.6 million. Proportion of disabled over 85 will increase from 36 to 49 percent. Result: Greater demand for long-term care services and potentially greater demand for institutional services.

Impact of Sociodemographic Change on the Future of Long-Term Care Effects of Change on Demands for Care – Minority elders An increasing proportion of minorities among the elderly might increase demand for long-term care services. African-Americans are 50 percent more likely to use long-term care (mostly informal and community-based) Hispanics require less overall care, but rely more on informal care. – Better educated elders Greater percentage with high school diploma or GED. Education may reduce disability rates.

Impact of Sociodemographic Change on the Future of Long-Term Care Effects of Change on Demands for Care – Elders with higher income Average income of the elderly will increase 60% in real terms between 2001 and Single women will have largest increases, but will still have lowest levels of income. Incomes for elderly couples and single people age 85 and over will increase more rapidly than for younger groups. The latter will still be about 30 percent lower than for all elderly.

Impact of Sociodemographic Change on the Future of Long-Term Care Effects of Change on Availability of Informal Support – More spouses Percentage of married elderly will increase slightly. – More childless individuals Nearly twice as many women may not have informal support from children.

Impact of Sociodemographic Change on the Future of Long-Term Care Summary – By 2050, the number of individuals reaching ages that may require long-term care will more than double. – Will increase demand for long-term care workers. – Supply will depend on wages paid, labor force participation patterns of older workers, and immigration. – Increased numbers of African-American elderly may signal increased demand, whereas greater education may signal decreased demand.

Impact of Sociodemographic Change on the Future of Long-Term Care Summary (contd.) – Diversity will require greater emphasis on cultural competency. – Greater education may affect methods of communication – Real income may counterbalance costs if costs do not increase to match income increases. – Informal supports may decline with declining birth rate. – Community based settings may demand more transportation. – But: Baby boom may overwhelm everything else.

Long-Term Care: Medicaid’s Role and Challenges Over 12 million people in the United States need help with basic activities of daily living (ADLs) requiring long-term care services (institutional, community, informal) million in community and 1.5 million in nursing facilities Elderly are the primary users and among the elderly, the very old and those who live alone.

Long-Term Care: Medicaid’s Role and Challenges Spending on long-term care reached $115 billion in Over 40 percent was financed by Medicaid, including half the costs of nursing home care. However, Medicaid only pays for those who have exhausted their financial resources. More than one-third who entered nursing homes, and more than 70 percent who were there at least one year, had catastrophic expenses (40 percent of income and assets).

Long-Term Care: Medicaid’s Role and Challenges Elderly pay out-of-pocket for 30 percent of long-term care costs. Medicare and private insurance play a limited role. Current system does not adequately cover all those with disability needs (up to 20 percent report an inability to meet all long-term care needs). Increases in disabled population and health care costs will likely make the problems worse.

Long-Term Care: Medicaid’s Role and Challenges Health Insurance Coverage for Elderly with long-term care needs – 57% Medicare and private – 19% Medicare and Medicaid – 16% Medicare only – 3% Medicare and other – 5% Other and unknown

Long-Term Care: Medicaid’s Role and Challenges For the elderly and nonelderly poor who need long- term care, Medicaid is a significant source of health insurance – 64% of – 44% of 65+ For long-term care itself, Medicaid is a significant source. – $115 billion on long-term care (12% of national health spending). 66 percent financed by Medicaid and out-of-pocket expenses. – $83 billion on nursing home care. 78 percent financed by Medicaid and out-of-pocket expenses. – Informal care not included in these costs.

Long-Term Care: Medicaid’s Role and Challenges Medicaid – 40% of all long-term care costs. – 50% of nursing home costs. – 70% of nursing home residents. – Long-term care is 35% of Medicaid budget. Medicaid is nation’s safety net provider for long-term care. Middle-income individuals must spend down assets and income to become eligible. – Discuss.

Long-term care policy issues Access to care – Availability of providers to deliver care at low rates Repeal of Boren amendment may make things worse. – State restrictions on nursing homes and nursing home beds. – Access to community-based alternatives has been limited in most states. Medicaid’s institution bias.

Long-term care policy issues Quality – Long-standing concern – Comprehensive nursing home reforms OBRA 1987 Improvements in quality of care, reductions in restraints, increases in behavior management programs, hearing aids, psych therapy. Growing demand for Long-term care – Baby boom. Financing – Public programs remain liable.