Long-Term Care

Long-term care includes an array of services used by persons who need assistance to perform daily activities that are basic to living independently. These daily activities include self-care activities (e.g., eating, dressing, bathing, and getting around the house) and household tasks (e.g., shopping, preparing meals, managing money, using the telephone, housecleaning, and taking medications). The term "long-term care" encompasses the range of services needed to perform these activities; it may also include supervision and monitoring for safety and some medical care. Long-term care services are provided in private homes, nursing homes, and a variety of other settings. Conditions that can create a need for long-term care services include physical disability, frailty, chronic illness, mental retardation, mental illness, and cognitive disabilities such as Alzheimer's disease.

The growing need for long-term care

The number of persons who need long-term care depends on how that need is defined. A broad definition would include anyone who has difficulty performing a range of daily activities expected of his or her age group. In 1994 an estimated 12.8 million Americans of all ages said they needed assistance with everyday activities as a result of chronic conditions. The majority of Americans in need of long-term care, approximately 57 percent (7.3 million), were adults age sixty-five or older. Forty percent (5.1 million) were working-age adults age eighteen to sixty-four. Three percent were children under age eighteen who were limited in their ability to engage in play or school activities expected for their age due to physical or mental disabilities (GAO, 1994). In 1994 approximately 6.6 million persons age sixty-five or older received help with one or more daily activities (Kassner and Bectel). Many other adults live independently with little or no assistance from others.

The need for long-term care services in the United States is likely to increase dramatically as a result of an increasing older population. Individuals age eighty-five and older are the most rapidly growing age group in the nation. The eighty-five and older population is expected to rise from 3.9 million in 1997 to 8.5 million in 2030 and to eighteen million in 2050. Estimates of the number of baby boomers (Americans born between 1946 and 1964) who will need long-term care range from two to four times the number of disabled older persons in the late 1990s, depending on the impacts of medical advancements on increasing longevity and on treating and preventing disability (GAO, 1998). Indeed, the proportion of Americans age sixty-five or older with a chronic disability declined from 24 percent in 1982 to 21 percent in 1994 (Federal Interagency Forum on Aging-Related Statistics).

Although most older people do not need long-term care, older persons are the primary users of long-term care services. Three percent of all persons age fifty and older, and 11 percent of persons age eighty-five and older, receive help with two or more daily activities (Kassner and Bectel). An estimated 39 percent of persons who turned sixty-five and 56 percent of persons who turned eighty-five in 1995 will use a nursing home during their lifetime (Murtaugh et al.). The average length of stay for nursing home residents sixty-five years and over is 290 days, but half stay no more than about two months (63 days) (Gabrel).

Women have a longer life expectancy than men and are more likely than men, at every age, to have a disability (Kassner and Bectel). Older women also tend to have lower incomes and are more likely to live alone than older men. As a result, the majority of nursing home and home care users are women. In 2000 women comprised an estimated 58 percent of the population age sixty-five and older and 70 percent of persons age eighty-five and older (Federal Interagency Forum on Aging-Related Statistics). Women accounted for about 75 percent of nursing home residents aged sixty-five and over (Gabrel) and 70 percent of older home care consumers (Munson 1999).

Where is long-term care provided?

In 1994 nearly 80 percent of older persons who reported needing assistance with one or more daily activities lived in their own home or another community setting. Just over 20 percent lived in nursing homes. Of those living in homes and communities, an estimated one million lived in supportive housing that provided some long-term care services, such as assisted living facilities (GAO, 1998).

The bulk of long-term care, however, is provided by unpaid family members or friends (GAO, 1994). Between 1987 and 1997 the proportion of U.S. households involved in unpaid caregiving activities for a person over the age of fifty jumped from approximately 8 percent (seven million households) to 22 percent (more than twenty-one million households).

Caregivers varied in the amount of time they spent caregiving and in the scope of care provided. While the average unpaid caregiver provided eighteen hours of care per week, nearly one in five (18 percent) provided forty or more hours of care per week (NAC/AARP, 1997). Nearly all caregivers surveyed (98 percent) said they helped with at least one household management activity, such as transportation, grocery shopping, housework, preparing meals, or managing finances, or giving medication. More than four in five (81 percent) helped with three or more of these activities. Over half (51 percent) helped with at least one personal care activity, such as getting in or out of chairs, dressing, bathing, toileting, or feeding. Over a fourth (29 percent) helped with three or more of these activities. In 1996 more than seven in ten unpaid caregivers (73 percent) were women, and 12 percent were age sixty-five or older (NAC/AARP).

Because many members of the baby boom generation have remained single longer and have had fewer children than their parents, a smaller proportion of this generation will have a spouse or adult children available to provide unpaid caregiving when they are older. In addition, families are more likely to be geographically dispersed, and women are more likely to work outside the home than they were formerly. As a result of these demographic changes, it is predicted that older persons of the future will have fewer unpaid caregivers available and will be more dependent on paid long-term care services (GAO, 1998).

Individuals who need more assistance than unpaid caregivers can provide may receive long-term care in a range of settings, including home care, adult day services, supportive housing, and nursing homes. Home care refers to a range of services, including nursing care, personal care, assistive devices, meals, and home modifications, provided to people with disabilities in their own homes. Many unpaid caregivers use one or more home care services to help with caregiving. For example, 47 percent of caregivers reported acquiring a wheelchair, walker, or other assistive device. In addition, many caregivers reported purchasing personal or nursing care services (38 percent), home modification (28 percent), home delivered meal services (16 percent), assistance with housework (16 percent), and respite care (14 percent) (NAC/AARP 1997).

Adult day centers provide a range of services to physically impaired or mentally confused adults who live at home, thus allowing caregivers to have respite or go to work during the day. Adult day centers provide less than twenty-four-hour care and typically operate during normal business hours five days a week. As of 1996, there were an estimated four thousand adult day centers operating in the United States (NADSA).

Supportive housing refers to care in a homelike setting in the community for people in need of assistance with daily activities or protective oversight. Supportive housing can be an alternative to nursing homes for some. Typically, however, supportive housing offers only very limited nursing care. The major types of supportive housing settings include assisted living, adult foster care, congregate housing, and continuing care retirement communities (Blanchette).

Assisted living is a rapidly growing option for individuals with long-term care needs who prefer to live in the community and who generally do not require the level of skilled nursing or custodial care provided in a nursing home (GAO, Assisted Living, 1999). While definitions of assisted living vary, the term generally refers to a residential, homelike setting that provides or coordinates personal care services, twenty-four-hour supervision, social activities, and some health-related services. Although the lack of consensus on a definition precludes an exact count of assisted living residents, states reported a total of 32,886 licensed assisted living facilities with 795,391 units or beds in 2000, a 30 percent increase since 1998. These numbers include board-and-care homes, which are often similar to assisted living but usually provide no health-related services (Mollica).

Nursing homes are the most easily recognized form of long-term care, although far more people receive long-term care in their own home or in other community settings. The National Nursing Home Survey defines nursing homes as "facilities with three or more beds that routinely provide nursing care services." In 1997 approximately 1.5 million persons sixty-five years and over lived in nursing homes (Bishop).

As opportunities have expanded for care in the community (often termed home and community-based care), the proportion of older people residing in nursing homes has declined. Between 1985 and 1995 the number of nursing home residents per thousand individuals age sixty-five and older fell from 46.2 to 42.4, an 8.2 percent decline. In 1995 nursing home residents tended to need more intensive care than did their counterparts in 1985, because individuals with fewer impairments were more likely to receive care in the home or another community setting, such as an assisted living facility (Bishop).

Financing of long-term care

In 1998 the average cost of care in a nursing home was $56,000 per year. National spending for nursing home and home health care in 1998 totaled $117 billion dollars (HCFA, "Table 7." 2000; "Table 9," 2000). These expenditures do not include much of the spending on home and community-based long-term care services, much of which is spending by older persons themselves and their families (termed out-of-pocket expenditures).

Nearly a third (30 percent) of home health and nursing home care expenditures were paid by older persons themselves and their families, and the largest portion (39 percent) was paid by Medicaid (see Figure 1). Long-term care services are usually not covered by private health insurance policies or Medicare. Moreover, few people have private long-term care insurance, which is unaffordable for many and often provides only limited coverage.

Costs to family caregivers. These expenditures for long-term care do not include any accounting of unpaid caregiving. If unpaid caregivers had to be replaced by paid workers, the estimated cost would be $196 billion as of 1997 (Arno et al.). This amount is far more than national spending on home health and nursing home care combined in the same year ($115 billion) (HCFA, "Table 9," 2000).

These unpaid caregivers often incur both direct and indirect costs. In a national survey of caregivers to older persons, half had regularly spent their own money on caregiving. The average amount spent was $171 a month per caregiver, or approximately $1.5 billion per month in direct costs to caregivers nationwide. More than half of all caregivers reported that their caregiving responsibilities caused them to have less time for other family members or for personal activities. More than half made at least some work-related changes (e.g., modifying their work schedule or taking time off during the day) to accommodate the demands of caregiving. Fifteen percent of caregivers reported suffering physical or mental health problems as a result of caregiving, and one in four found caregiving to be emotionally stressful (NAC/AARP).

Private long-term care insurance. Although private long-term care insurance is a growing form of financing of long-term care, relatively few older persons have coverage. The number of long-term care insurance policies sold doubled from about three million in 1992 to almost six million by mid-1998 (Coronel). People are often reluctant to buy long-term care insurance because they believe that they will never need long-term care or believe, erroneously, that care will be covered through Medicare or private health insurance. The cost of long-term care insurance premiums is unaffordable for many people. Consumer Reports estimated that only 10 to 20 percent of older persons could afford long-term care insurance ("Long-Term Care Insurance Special Report").

Medicaid. The federal- and state-financed Medicaid program contributes to the cost of care for about two-thirds of nursing home residents (GAO, 1998). Medicaid has strict financial and functional eligibility requirements. These requirements vary from state to state, but in all states, individuals must be impoverished before they can qualify for benefits. In most states, nursing home residents can have no more than $2,000 in liquid assets to be financially eligible for Medicaid coverage of their care. In addition, individuals who need long-term care due to cognitive or mental impairments often have difficulty meeting Medicaid's functional eligibility standards. In most states, Medicaid will not cover long-term care services for individuals who need prompting, physical cueing, or supervision to perform activities of daily living or who need supervision due to mental impairments, unless they meet other nursing or functional criteria (O'Keefe).

People of all ages prefer to receive long-term care services in their own homes, if possible, or in homelike supportive housing settings, such as assisted living. Historically, however, Medicaid has covered long-term care primarily in institutions. The federal government and the states have limited Medicaid coverage of home and community-based long-term care out of concern about the potential cost of covering services for the large number of people with disabilities who are cared for by their families at home (GAO, 1998). In 1965, when the Medicaid program was developed, there were few alternatives to institutions for people who needed more long-term care than their families could provide (Kassner).

Today, however, there is a growing movement to expand Medicaid coverage of home and community-based long-term care services (Kassner). The 1981 Omnibus Budget and Reconciliation Act gave states the option of applying for Medicaid waiver programs to fund home and community-based services for people who meet Medicaid eligibility requirements for nursing homes (GAO, 1998). Waiver programs allow states to offer services not covered under the regular Medicaid program and to waive certain Medicaid requirements. Specifically, services do not have to be statewide; states can use more liberal financial eligibility criteria; and designated groups can be given benefits that other groups are not eligible to receive (Lutzky et al.). All states now have waiver programs or a program similar to a waiver. Through these programs, states are increasingly offering services in the home or in the community that enable older persons and persons with physical disabilities, developmental disabilities, or mental retardation to avoid living in an institution.

Unlike nursing home residents, most assisted living residents pay entirely out of their own incomes. Average monthly rates for assisted living facilities range from less than $1,000 to over $4,000 (GAO, Assisted Living, 1999). Many states are now providing Medicaid coverage of assisted living, though this coverage remains limited. In 2000 Medicaid programs in thirty states covered assisted living or residential care services for approximately 58,544 beneficiaries, a nearly 50 percent increase since 1998. Still, Medicaid covered only a small fraction of the 795,391 licensed assisted living and board-and-care units or beds (Mollica).

The growth of Medicaid waiver services was partly a result of laws and court rulings, including the 1990 Americans with Disabilities Act (ADA), which required that states provide services to people with disabilities in the "most integrated setting appropriate" (Lutzky et al.) In 1999, in Olmstead vs. L.C., the Supreme Court ruled that unnecessary institutionalization of persons with disabilities constitutes discrimination based on disability under the ADA. However, the decision allows states some flexibility in making placement decisions as long as a state has an equitable plan to provide care in less restrictive settings and moves people off waiting lists for such services at a reasonable pace.

Despite growing coverage of home and community-based care, Medicaid still has an institutional bias. In 1999 only 26 percent of Medicaid long-term care funds were spent on home and community-based services. Such services cost less than nursing home care, thereby allowing more persons to receive care for lower total costs. In fact, 64 percent of Medicaid recipients who were older and disabled long-term care clients received some type of home and community-based services (Doty). In several states, financial eligibility standards are stricter for home and community-based long-term care services. This gives individuals an economic incentive to choose a nursing home over home care. Also, the federal government requires states to provide nursing home services under Medicaid, whereas providing home and community-based services is optional (Kassner). Many states have waiting lists because the demand for waiver services exceeds the capacity of waiver programs (Lutzky et al.).

Medicare. Medicare plays a limited role in long-term care. Unlike Medicaid, the federally funded Medicare program does not have financial eligibility requirements. Medicare provides limited coverage of nursing home care, paying for only up to a hundred days of skilled nursing care following a three-day hospital stay; after twenty days, beneficiaries must contribute a copayment of up to $97 per day (HCFA, Medicare and You, 2001). In 1998 Medicare accounted for $10.4 billion of the $87.8 billion in national expenditures on nursing home care (HCFA, "Table 7," 2000).

Due to court decisions and administrative changes in the late 1980s, Medicare has expanded coverage of home and community-based long-term care through its home health care benefit (GAO, 1998). In 1991 Medicare spending on home health care totaled $4.2 billion, about a quarter (26 percent) of national spending on home health care. By 1998 Medicare spending on home health care more than doubled to $10.4 billion and accounted for over a third (35 percent) of national spending on home health care (HCFA, "Table 9," 2000). The Balanced Budget Act of 1997 changed the Medicare reimbursement system in order to control spending, encourage efficiency, and decrease fraud and waste (HCFA, National Health Expenditures Projections, 2000).

Ensuring quality of long-term care

Monitoring quality of long-term care services has been a long-standing challenge, especially in nursing homes. The Nursing Home Reform Act of 1987 set new standards for care and established rights of nursing home residents, in response to numerous reports of neglect and abuse in nursing homes. A notable impact of the act is a substantial reduction in the unnecessary use of physical restraints and chemical restraints (drugs) in nursing homes.

The Nursing Home Reform Act has been difficult to enforce, however, and has often failed to protect nursing home residents from poor care and unsafe conditions. Federal and state inspections showed that more than one in four nursing homes nationwide had deficiencies that caused harm to residents or placed them at risk of death or serious injury each year from 1995 to 1998 (GAO, Nursing Homes, 1999).

Because the picture is often bleak in nursing homes, home and community-based services may offer better quality of life. These services allow individuals to receive care in a home or community setting rather than in an institution. In 1987 federal law mandated new quality standards for home health care agencies that are reimbursed by Medicare and Medicaid. States also have their own licensing laws for home health services covered by state-funded programs. Within the same state, several government agencies may be involved in regulating or contracting for home care services. In addition, there are hundreds of unlicensed agencies, such as agencies that provide temporary home care workers for private-paying consumers, operating in every state. Many researchers are skeptical that the fragmented regulatory system can effectively enforce quality home care (Coleman).

Quality of home care has been difficult to assess. Studies have found that clients reported high levels of satisfaction and at the same time reported serious deficiencies in worker performance. These inconsistencies suggest that clients may overstate their levels of satisfaction (Coleman).

A new movement called consumer-directed care presents an opportunity to empower individuals to manage their own home care. Many publicly funded programs now give beneficiaries the option to choose their own care providers and to manage their own plans of care, much as privately paying individuals do. Consumer-directed care is advocated primarily by younger adults with disabilities, who want to live in the least restrictive environment possible and to direct their own care. While some advocates contend that providing consumers with autonomy and control will improve care quality, others are concerned about potential health and safety risks. Experts have noted that long-term care often involves a trade-off between maximizing consumer choice and ensuring safety (Coleman).

Assisted living facilities often emphasize a philosophy of facilitating residents' privacy, autonomy, independence, and dignity, and promoting care in a homelike environment (Lewin-VHI). They are licensed and regulated by the states rather than the federal government, and standards and oversight approaches vary across the states. In a 1999 study of assisted living in four states, the General Accounting Office found that more than a quarter of facilities were cited by state oversight agencies for having five or more quality-of-care or consumer protection deficiencies or violations during 1996 and 1997. Frequently identified serious problems providing insufficient care to residents; having insufficient, unqualified, and/or untrained staff; not providing residents the appropriate medications or storing medications improperly; and violating state admission and discharge regulations (GAO, Assisted Living, 1999). Nonetheless, older persons and their families frequently choose assisted living for persons who do not need the more intense services of nursing homes, because the quality of life in assisted living is typically preferred over that in nursing homes.