Sustainable Solutions for Long-Term Care
authors Cindy Sanders
Choices impacting where and how to age have never been more abundant. Technology and assistive care companies have made it easier to age in place. Independent, assisted, skilled nursing, and continuum of care facilities offer a broad spectrum of accommodations and activities to suit any taste and ability level. Memory care units make it possible for couples to stay in close proximity when one needs additional resources. And rehabilitation facilities allow individuals to return to a lower level of acuity after an interval of intensive therapy.
“The range of options is absolutely critical,” said Maribeth Bersani, chief operating officer for Argentum (formerly the Assisted Living Federation of America). “There is no one answer for everyone.”
Noting the senior housing industry has continued to grow and innovate, she pointed out, “Assisted living is now 25 years old so it’s already not the way the pioneers built it.” Bersani added with a laugh that quite a few of the original ice cream parlors and sundae socials have given way to stocked bars and happy hours. “As the resident changes, the communities will change, as well,” she said.
Despite the array of possibilities, she continued, families too often find themselves with limited options in the face of urgent need.
“It is a need-driven business because people wait too long, and then the situation is so critical that you almost don’t have the opportunity for choice,” Bersani said.
There are a number of factors impacting choice. One issue is supply and demand for services as people live longer. With the first of the baby boomers turning 70 this year, the need for long-term services and supports is only expected to rise.
According to the Administration on Aging, individuals 65 and older numbered 44.7 million in 2013 (the latest year for which data is available). That figure represents 14.1 percent of the U.S. population. By 2040, those 65 and older will represent 21.7 percent of the total U.S. population. By 2060, the projection is there will be about 98 million Americans, more than twice the number in 2013, who are classified as seniors.
The range of options can also be overwhelming. “There is no one place you can direct people,” Bersani said, adding seniors really have to do some soul searching to think about what works best for them on both a physical and emotional level. “It’s a very individual, personal decision.”
Savings … or lack thereof … is perhaps the biggest factor impacting what options are truly viable. Bersani said baby boomers aren’t really saving for long-term needs. The Government Accountability Office released a report last year that showed Social Security provides most of the income for about half of the households age 65 and older, and nearly one-third of households age 55 and older have no retirement savings at all. For those who do have some savings, the GAO report pegged the median amount at just over $100,000 for households with members aged 55-64.
Katie Smith Sloan, president and CEO of LeadingAge, pointed out that 12 to 18 months in a skilled nursing facility or assisted living community could completely erase that savings.
“We’re on a path that is completely unsustainable and fairly irrational,” she said of the current system. “When (individuals) deplete their savings, they have to go on Medicaid so people are impoverishing themselves … and Medicaid was never meant to be the long-term care payer of last resort. People are drowning, and it is straining state budgets.”
Finding a rational, equitable, affordable way to pay for the services and supports people need is central to LeadingAge’s mission and public policy efforts. Sloan said LeadingAge supports a solution used to offset risk in many other aspects of life – insurance. “We believe long-term care is an insurable event,” she stated, adding her organization is pursuing universal coverage. “It needs to be universal to create a big enough risk pool,” she continued. “Insurance just doesn’t work when there’s not a big enough risk pool.”
Currently, Sloan noted, “There’s a very paltry long-term care insurance market – about 5 percent have coverage.”
Both Sloan and Bersani said their organizations were supportive of the CLASS Act (Community Living Assistance Services and Supports Act), which passed as part of the Affordable Care Act and created a voluntary and public long-term care insurance option for employees. However, it was deemed unworkable and was later repealed.
“We’re both working at the federal level to try to get some incentives for people to save,” Bersani said of Argentum and LeadingAge, among other groups charged with advocating on behalf of seniors.
Similarly, Sloan said her organization and colleagues across the senior care spectrum are working to answer key questions about the best way to put a broader insurance product in play so that it could be workable and sustainable. Issues to be addressed include:
- How individuals pay for coverage.
- When benefits kick in and what they cover, and
- How benefits are paid out on behalf of those covered.
“What I find hopeful right now is that we have really strong data to support the need for action that we didn’t have before, and I think there is a growing interest on part of policy makers,” said Sloan.
Bersani echoed the sentiment, noting, “We are seeing renewed interest in trying to help people plan. I’m very encouraged by that.”
Sloan noted, “Every lawmaker in this country has someone in their family who has accessed long-term services and supports for a loved one so it’s an issue near and dear to people’s hearts.”
Saying CLASS might have been a bit ahead of its time, Sloan concluded, “We have a window of opportunity now that we didn’t have before. People are more aware of our aging population. Now we need some champions in Congress.”
2016 Pathways Report: Perspectives on the Challenge of Financing LTSS