Graying boomers and rising costs mean planning for tomorrow’s care is today’s necessity

Aging well in America today requires planning. Most of us, however, don’t do a good job preparing for an increasingly common prospect: the need for long term care.

By our 80s or 90s, many of us will require some help taking care of ourselves, whether we live at home, in assisted living or in a nursing home. If we don’t have a healthy spouse or other relative ready and willing to provide these services for love rather than money, we must pay others for assistance in getting around, taking our medications or other daily tasks. Yet, most of us have not prepared for this expense, and don’t even realize that we should.

Widely held misconceptions are a major barrier to sound public and personal planning for long term care (LTC). Most Americans, for example, assume Medicare will pay for their LTC. For the most part, that’s not the case. Medicare pays only for skilled nursing facility care for a limited time after at least a three-day hospitalization. Home care and nursing home care that consists of room, board and assistance with daily living are uncovered. Medicaid – public health insurance for the poor – kicks in only after your assets are exhausted. In addition, Medicaid covers only care in nursing homes, not assisted living or home care.

Rep. Tom Allen has been a leader in efforts to educate the public about these facts and the need for new public and private strategies to provide greater access to LTC. He is also a founding co-chair of the bipartisan House Long Term Care Caucus. The caucus serves as a voice in Congress for approximately 10 million Americans now receiving long term care, and focuses attention improving the access, quality and affordability of LTC for all.

Allen is an original co-sponsor of a recent resolution passed by the House that declared this week, the first full week in November, “Long Term Care Awareness Week.” He also advanced the public education effort by helping persuade the Social Security Administration to join this campaign. Starting this fall, Social Security statements mailed to individuals will make it clear that Medicare does not pay for LTC and therefore, individuals may want to consider private insurance to cover these costs.

Tuesday, Allen introduced a bill, the Long Term Care Quality and Modernization Act, with Rep. Earl Pomeroy, D-N.D., to deal comprehensively with LTC and help sustain the quality improvement gains in LTC settings across the country. Their measure will promote capital investment for aging skilled nursing facilities, assist in creating a stable and well-trained work force and modernize the LTC payment system.

Allen is also a co-sponsor of HR 3363, which would make LTC insurance premiums tax exempt under cafeteria or flexible spending plans, which permit employees to deduct a fixed amount or percentage from their pre-income tax salaries for qualified expenses the employer does not reimburse.

It is clear the time has come for this attention and support. In October, the first baby boomer applied for Social Security retirement benefits. Others in this disproportionately large (78 million strong) generation will follow, ushering an era that will not only strain Social Security, but also Medicare, Medicaid, and other health care systems.

According to the U.S. Department of Health and Human Services, about 60 percent of individuals who reach age 65 will require LTC in their lifetimes. By 2040, the number of individuals 85 or older (those most likely to require LTC) is projected to increase more than 250 percent, from 4.3 million in 2000 to 15.4 million. Maine, with one of the oldest populations in the country (only Florida, West Virginia and Pennsylvania have more seniors as a percentage of their population), will be especially burdened unless prepared.

The pool of workers who support Social Security, Medicaid and Medicare – Generations X and Y – will bear a heavy load during the coming decades. There will be fewer of them to provide the uncompensated care by family members our society has come to expect. (AARP estimates say more than 44 million adults now provide unpaid care to another, at a value of $257 billion annually.)

Nursing home care now costs about $70,000 a year; assisted living is about $40,000. Few families are prepared for such large expenses. Elderly citizens must exhaust their savings before they can turn to public funding. Medicaid, neither intended nor designed to be used primarily for LTC, is now paying for almost half of all it, at a cost of $101 billion in 2005. Medicare is the second-largest source of payment, historically funding about 20.4 percent of American expenditures, while private insurers covered only 7.2 percent of all LTC expenditures.

The bottom line, therefore, is both individual families and society must take responsibility for this looming crisis. A combination of private and public investments are needed now, to ensure all Americans can expect to enjoy their golden years.

John Orestis, a former mayor of Lewiston, is president of North Country Health Care Associates, a provider of nursing and convalescent home care in Maine.