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Affording end of life and long term care

September 10, 2012

A new study in the Journal of General Internal Medicine finds that nearly a quarter of Medicare recipients spend more than their total household assets on out-of-pocket health care costs in the last five years of their lives. That’s in co-payments, home health care, things Medicare doesn’t cover.

(Did you know that Medicare doesn’t cover long-term care? If you’re really poor, Medicaid will cover some of it. But to be eligible you have to meet strict guidelines. And you pretty much have to use up all your own resources first.)

This study also found that the biggest expenses were for people with Alzheimer’s, who often need special care. What’s more, the Alzheimer’s Association says that Alzheimer’s care sometimes gets billed under a mental health code, which means Medicare will only cover a portion.

Demographically speaking, we’re about to be hit by a wave of older people. Boomers are aging, plus we’re all living longer. Here in Rhode Island, we’ve already got the nation’s biggest percentage of people over 85. And among older people we’re seeing the rise of some devastating mental and physical illnesses, including Alzheimer’s, which can run up huge medical bills.

Those facts, and some other recent articles (such as this one the looming crisis for Medicaid and long term care for the elderly in the NY Times) and stories got me thinking: what are we going to do about the cost of long term care for this quickly graying population?  How are we going to take care of an aging population with more and more special needs? Are we headed for a crisis?

We may be. I’ve been emailing with Donald H. Taylor, Jr., an associate professor of public policy at Duke University, who blogs and publishes a lot on long term care. I asked him if the Affordable Care Act might address some of the looming LTC issues, and here’s what he told me via email:

ACA [the Affordable Care Act] won’t do much for long term care. The CLASS [Community Living Assistance Services and Supports Act] provisions could have, but are on hold because they do not have a means of forced risk pooling like an individual mandate. Block granting of Medicaid [which Republicans would like to see] as a means of saving federal dollars would be a disaster, and pit the young poor v. elderly and disabled who depend on Medicaid to pay for LTC.

So, what’s the solution? Well, not everyone will need the most expensive and highest level of care in old age: nursing homes. Thank goodness, because nursing home care is incredibly expensive. There may be more efforts to help people stay in their own homes or communities by providing home health care workers, for instance. There’s an effort underway right now in Rhode Island to address the state’s growing Alzheimer’s needs in a more comprehensive way, including helping caregivers and coordinating better care in the community.

But the bottom line is, or at least it seems to me, that the burden of care will continue to fall on families, who do the yeoman’s work of it now. And they may not only have to burn through all of their loved one’s money to pay for health care but even begin dipping into their own when that runs out.

Are you providing some kind of care – in your own home or another – to an aging family member? What’s it been like?

3 Comments leave one →
  1. Virginia permalink
    September 10, 2012 6:40 pm

    Nice post, Kirsten. As CEO of the state’s association of nursing homes, I share Professor Taylor’s opinion about ACA. The individual mandate will not help nursing homes in the same way it will help other health care facilities — our patients already have insurance coverage. It’s just POOR coverage that doesn’t cover the cost of care.

    What’s more, my family’s experience has given me far more hands-on experience than I ever would have wished, on the issue of long term care needs. I agree with you that nursing home care is expensive. Contrary to popular opinion, however, home care often costs more. The family member for whom I care cannot safely be left alone. She has a home health aide 12 hours per day at the moment, at a cost of $24 per hour. That’s $288 per day, $8,640 per month. And that doesn’t include the cost of meals, housing, and RN care.
    Most of us in the field recognize that long term care as we know it today is unsustainable — but what will replace it? Other industrialized nations don’t have the same problems, but the reasons are difficult to tease out, just as they are with overall health care costs.

    • September 11, 2012 10:06 am

      Thanks for weighing in, Virginia. Clearly, I need to investigate the issue more and invite you to keep the conversation going.

      $8640 a month for home health care–gasp! If someone doesn’t have the personal wealth to pay for that, what are the options – Medicaid? I imagine that many times the only option is another family member providing care.

      Also, you say nursing home patients already have insurance. Is that at private nursing homes?

      Thanks again for commenting. – Kristin

  2. Virginia permalink
    September 11, 2012 12:50 pm

    $8640 a month for home health care, and that’s only 12 hours per day. The other twelve, a family member needs to be there. On top of that, there are ordinary household bills, such as groceries, mortgage, and utilities. In a nursing home, these are all included in the daily rate. The average daily rate that R.I. Medicaid pays for nursing home care is around $194, which totals just under six thousand dollars per month.

    We expect my family member to make a full recovery. If this were not the case, however, we would move her into my home, to eliminate the separate housing and utility costs. Eventually, she would exhaust all of her assets, (as your post explains) and then she would qualify for Medicaid. Medicaid would place her in a nursing home, because that’s the least expensive setting for someone who needs 24/7 care. If we wanted to keep her in our home instead, we would have to pick up the $8640 a month cost.

    As for my statement that nursing home patients generally have health coverage; two thirds of them have their stays covered by the Medicaid program. That’s because they’ve exhausted their resources, and are “impoverished” to the extent necessary to qualify for Medicaid — a program that was created back in the 1960s to provide health coverage to the poor. These are the people to whom I referred when I said they have “POOR coverage . . . that doesn’t cover the cost of care.” Many of the remaining one third have Medicare coverage that pays for their stay, under the limited Medicare skilled nursing facilty benefit.

    Only around ten percent of nursing home patients lack coverage, and pay for their stays out of pocket. These are generally the people en route to becoming “impoverished” enough to qualify for Medicaid — eventually they end up covered by that program. Would the “individual mandate” required under ACA help these patients? Probably not. It depends on whether nursing home care is a required benefit under the new health plans, and how people covered by Medicare will be treated under the new law. It will NOT help nursing homes, however. Insurance company rates will undoubtedly be lower than today’s private pay rates.

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