The Age-Old Dilemma An aging population brings greater demand for long-term care services, but funding isn’t always to b

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The Age-Old Dilemma
An aging population brings greater demand for long-term care
services, but funding isn’t always to be found.
By Deidre McPhillips, Data Editor | Dec. 27, 2016, at 9:00
a.m.
Bobbie Preddy's mother ran out of money years ago. She's 98 years
old and if she lives longer than six more months, Preddy might be
out of cash, too.
Preddy's mother requires round-the-clock care, due to frequent
urinary tract infections and related conditions. Together, Preddy
and her mother determined the only way she could get the support
and care she needed was at an assisted-living facility. But costs
for even one of the cheapest facilities in the market are hundreds
of dollars more than Preddy's mother can afford with her pension
checks each month.
"I'm going to run out of money and my mother might still be alive,"
she says. "And I don't see anything, anywhere that can help
that."
Preddy's dilemma is not uncommon. Her mother is one of more than 8
million individuals in the U.S. that require support from long-term
care services, according to the Centers for Disease Control and
Prevention, the great majority of whom are more than 65 years old.
Family Caregiver Alliance, a nonprofit support organization for
caregivers, lists at least 10 different options for living
arrangements, each with varying degrees of provided care,
independence and cost. According to the insurance company Genworth,
the average annual cost for a private room in a nursing home in the
U.S. is more than $90,000, and a year in an assisted-living
facility is more than $40,000, expenses that are not always covered
by public insurance programs.
Globally, the number of older persons is growing faster than any
other age group. In 2015, one in eight people was more than 60
years old, according to the United Nations. By 2030, they project
an increase to one in six people, or 1.4 billion individuals over
the age of 60.
When it comes to aging, experts say the greatest challenge our
world currently faces – more than pensions or birth rates – is
planning for and financing long-term care.
Long-term care is like an "exploding bubble," says Randall Ellis, a
professor at Boston University whose research is focused on health
economics. "It's the largest uninsured risk for the aging
population."
In the U.S., when people face the dilemma that Preddy does with her
mother – once houses have been sold, a lifetime of savings has been
depleted and health conditions have reached the point that in-home
care is not an option – others may rely on Medicaid to cover
costs.
In 1965, Medicare and Medicaid became the first public health
insurance programs in the U.S. when they were signed into law by
President Lyndon Johnson. Medicare was intended for individuals
over 65 years old and those with end-stage renal disease, or kidney
failure. Medicaid was intended to cover low-income individuals. But
as of fiscal year 2014, long-term care services accounted for about
a third of Medicaid spending, or $152 billion.
Preddy's mother is well beyond 65 years old and, with an annual
income of about $17,000, would be considered low-income by many.
Her pension is far from enough to pay for her long-term care, but
it is enough to disqualify her for both public health insurance
programs and leave her family scrounging for funds.
"There's an extreme bias in the allocation of resources away from
older people to other groups," says Peter Lloyd-Sherlock, a
professor of social policy and development at the University of
East Anglia in the U.K. whose research focuses on the social
protection of older people in developing countries. Costs
associated with long-term care – financial and otherwise – are
inevitable, he says, and the systems created to distribute those
costs exemplify the values of that society.
Taking care of an individual at home will always be less expensive
than bringing him or her to a nursing home or assisted-living
facility, says Terry Hokenstad, a professor of global health at
Case Western Reserve University. Policies and programs that support
informal caregivers like family members, he said, make it easier to
keep older adults at home and out of long-term care
In a number of European countries, pension funds are used to
compensate unpaid caregivers. Denmark and the Netherlands
automatically cover time spent outside the labor force due to
caregiving, while Germany and Norway reward caregivers with
additional credits to their own pensions.
"Say an older person has a stroke and goes into the hospital,"
Hokenstad says. "The first thing we (Americans) think is to get
them to a nursing home. The first thing they think in the Nordics
is how they can get back into their own home and what sort of
improvements are needed to make it happen."
But Naoki Ikegami, former president of the Japan Society of
Healthcare Administration and the Japan Health Economics
Association, warns against a reliance on informal care for older
adults. A long-term care industry has a public responsibility and
legal obligation to provide appropriate care, he said, but it's
difficult to monitor whether family members are actually caring or
not.
Instead, restricting the "medicalization" of long-term care –
maintaining a separation between health care spending and
activities and those related to long-term care – can keep expenses
down. "Health care can always be interpreted as a life or death
situation," he says. "In health care, we give doctors a blank check
to do whatever the patient needs. But with long-term care, we can
rely on a more objective way of measuring need."
In 2000, Japan developed a universal insurance program for
long-term care in response to public outcry against growing
problems of neglect. Funded by tax revenues and higher premiums for
those over 40 years old, out-of-pocket costs for long-term care
services are limited to a 10 percent co-payment. A revision this
year raised that rate to 20 percent for those with above average
income.
Ultimately, national and global debates on long-term care come down
to whether the responsibility to look after our growing elderly
population should be a public or private one. Like Japan and
Denmark, most developed countries have favored strong, publicly
funded social safety nets.
For Josh Wiener, former director of the Aging, Disability, and
Long-Term Care program for the non-profit research organization RTI
International, creating a successful system is a matter of finding
the political will to make long-term care a policy priority.
"Long-term care is higher on the political agenda mostly everywhere
else than it is in the U.S.," he said. "Germany established a
long-term care insurance program at a time when they were dealing
with the unification of the East and the West. They recognized a
need and they went ahead and did it."
The same happened in Japan, where policy makers saw they had an
aging population and agreed to address it. But the U.S., he said,
tends to avoid the conversation.
For a while, private insurance plans that allow individuals to
protect a greater share of their assets dominated the long-term
care coverage discussion in the U.S. But the number of providers
for these private plans has decreased dramatically in recent
years.
A voluntary public insurance program almost made its way into
President Barack Obama's health care reform plans in 2011. But the
Community Living Assistance Services and Supports program, or CLASS
Act, was quashed for fear of adverse selection, or attracting a
disproportionate number of high-cost users, that would drive up
premiums and because it couldn't prove to be debt-free for at least
75 years as the law requires.
Bobbie Preddy and her mother share a caring and trusting
relationship; they're "simpatico," she says. Preddy doesn't hope
for her mother to die, but she does hope that supporting her mother
doesn't have to cut too much into her own retirement savings.
Based on, “The Age-Old Dilemma,” what is the “age old dilemma,”
the author is addressing? How is it manifesting itself and where?
(Be specific.)