Long-Term Services and Supports Costly Now, More So in Future

Planning and Paying | January 29, 2019 | by Barbara Gay

Two studies, one issued by the Commonwealth Fund and one by the congressional Joint Economic Committee, show the difficulty long-term services and supports costs pose for older people and their families now and how these costs likely will increase for the future as informal, unpaid family caregiving becomes less available. 

Writing of The Financial Hardship Faced by Older Americans Needing Long-Term Services and Supports, authors Amber Willink, Karen Davis, John Mulcahy, Jennifer L. Wolff, and Judith Kasper found that older people who need long-term services and supports spend more out-of-pocket and have higher Medicare expenses than older people who do not need long-term services. Older people using long-term services and supports more often have credit cards debt related to the costs of services and are more likely than other seniors to have difficulty paying for housing, food, and other necessities. The report notes that, "[without] an affordable, sustainable financing solution," older people needing long-term services and supports "will continue to be at greater risk of delaying necessary care, being placed in a nursing home prematurely, and having to “spend down” into the Medicaid program."

The report compares Medicare spending for beneficiaries living in community settings and receiving some form of long-term services and supports against spending for beneficiaries who don't need these services, finding the total more than twice as high for beneficiaries using long-term services and supports. Beneficiaries using long-term services and supports similarly spent more than twice as much out-of-pocket for services covered by Medicare. People needing long-term services and supports also had high out-of-pocket spending for assistive devices, paid personal care, meal delivery, transportation and other services.

The study called for an update of the Medicare program to cover personal care services that would delay entry into a nursing home. It also noted the importance of programs like home energy, housing, and nutrition assistance to enabling older people to age in place in community settings.

On January 24, the congressional Joint Economic Committee released An Invisible Tsunami: 'Aging Alone" and Its Effect on Older Americans, Families, and Taxpayers. The report describes the reduction of the "social capital" of informal, unpaid caregiving on which older people traditionally have been able to depend when they needed long-term services and supports. The report notes that coming generations of older people have had more divorces and fewer children than their parents had, that fewer of them belong to faith-based organizations, and that fewer aging Americans have close friends in their neighborhoods than was true in the past. As a result, the report predicts long-term services and supports costs will exceed recent projections because people needing these services will have to pay out-of-pocket for them and will come to rely on Medicaid coverage to a greater extent than current and past generations have. The report calls for planning on the part of policymakers, health care providers, and individuals to prepare for future long-term services and supports needs.

We don't find the information or conclusions of either of these reports surprising. For many years we have worked for a better way of financing long-term services and supports, an effort validated by these two studies. Long-term services and supports financing will continue to be one of our top policy priorities, along with preservation and enhancement of the social safety net on which thousands of older people and their families rely when they need these services. Both reports also demonstrate the need for more paid caregivers, now and in the future, and workforce development also will be at the top of our policy agenda.