Long Term Care Usage Parsed in New Government Report

Long Term Care Usage Parsed in New Government Report

As the prevalence of family caregivers wanes in the Baby Boomer era, retirees are preparing for the chance that they may need long term care some day. A new report compiled by the CDC and National Center for Health Statistics evaluates the different kinds of paid care service providers and gives an insight into the dynamics of long term care in the United States.

Long Term Care Provider Types

According to the report, more than 8 million Americans utilized one of the five forms of paid long term care service in 2012. Those five types of care service providers include adult day service centers, home health agencies, assisted living and other residential communities, nursing homes, and hospices. The distribution of use rates varied substantially by state, but more than half of all long term care recipients received care from home health agencies.

Of the 8 million individuals who received long term care in 2012, more than 4.7 million utilized 12,200 different home health agencies for care. Nearly 1.4 million individuals received care in a nursing home and more than 700,000 at assisted living and other residential communities. Nursing homes had the highest use rates in most states and adult day service centers had the lowest. In 12 states, though, nursing homes and residential communities had similar use rates.

Among the five different provider types, nearly all operated on a for-profit basis, except for adult day service centers, which were mainly non-profit. Estimates for the amount of expenditures spent on long term care paid services falls between $210.9 billion and $306 billion annually. The source of payments varied dramatically based on provider type, though. The majority of assisted living and residential community care is paid for by out-of-pocket expenses, while Medicaid pays for most nursing home care.

Increasing Need

The number of Americans who need long term care is estimated to increase from 15 million in 2000 to 27 million in 2050, placing a strain on Medicaid, which currently covers around 40% of all long term care costs. This increase is mainly due to the rapidly aging population that enjoys advancements in health care and technology that previous generations did not.

The population of Americans aged 65 and over is set to more than double in the next few decades, rising from 40.2 million in 2010 up to 88.5 million in 2050. Even more surprising is the number of much older individuals, aged 85 and up, which is set to nearly triple from 6.3 million in 2015 to 17.9 million in 2050. This group has the highest rate of disability and the greatest need for long term care, which will soon see a huge increase in patients.

Though adults aged 85 and older are most likely to need long term care, this type of care isn’t just reserved for the elderly. In fact, the report found that 36.5% of people receiving care in an adult day service center are under the age of 65, along with 17.6% of those receiving care from a home health agency. Long term care is often thought of as a service just for seniors, but that isn’t the case. Injury and chronic illness are common reasons that younger people might need long term care, so it’s crucial to allocate funds for long term care as you age.

Plan for Risk

Not surprisingly, the majority of those receiving long term care were women, who made up 72% of residents at assisted living communities and 67.7% of nursing home residents. Long term care has always been more of a woman’s issue due to their longer lifespan and likelihood that they won’t have someone around to care for them when they become ill or disabled.

If you haven’t yet begun planning for the possibility of long term care, now is the time to start considering your risk. Read the full report here or find out more about long term care and how best to prepare your retirement portfolio for the high costs.

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