The Need for Long-Term Care | GROUP LONG-TERM CARE INSURANCE

The Need for Long-Term Care

The need for long-term care arises from the following factors:

• An aging population

• Increasing costs

• The inability of families to provide full care

• The inadequacy of insurance protection

An Aging Population

Long-term care has traditionally been thought of as a problem primarily for the older population. The population aged 65 or over is the fastest-growing age group; today, it represents about 11 percent of the population, a figure that is expected to increase to between 20 percent and 25 percent over the next 50 years. The segment of the population aged 85 and over is growing at an even faster rate. While less than 10 percent of the "over 65" group is over age 85 today, this percentage is expected to double over the next two generations.

An aging society presents changing problems. Those who needed long-term care in the past were most likely to have suffered from strokes or other acute diseases. With longer life spans, a larger portion of the elderly will be incapacitated by chronic conditions such as Alzheimer's disease, arthritis, osteoporosis, and lung and heart disease—conditions that often require continuing assistance with day-to-day needs. The likelihood that a nursing home will be needed increases dramatically with age. One percent of persons between the ages of 65 and 74 reside in nursing homes, and the percentage increases to 6 percent between the ages of 75 and 84. At age 85 and over, the figure rises to approximately 25 percent.

It should be noted that the elderly are not the only group of persons who need long-term care. Many younger persons are unable to care for themselves because of handicaps resulting from birth defects, mental conditions, illnesses, or accidents.

Increasing Costs

More than $50 billion is spent each year on nursing home care. This cost is increasing faster than inflation because of the growing demand for nursing home beds and the shortage of skilled medical personnel. The cost of complete long-term care for an individual can also be astronomical, with annual nursing home costs of $30,000 to $50,000 and more not unusual.

The Inability of Families To Provide Full Care

Traditionally, long-term care has been provided by family members, often at considerable personal sacrifice and great personal stress. However, it is becoming more difficult for families to provide long-term care for the following reasons:

• The geographic dispersion of family members

• Increased participation in the paid work force by women and children

• Fewer children in the family

• More childless families

• Higher divorce rates

• The inability of family members to provide care because they themselves are growing old

The Inadequacy of Insurance Protection

Private medical expense insurance policies (both group and individual) almost always have an exclusion for convalescent, custodial, or rest care. Some policies, particularly group policies, do provide coverage for extended-care facilities and for home health care. In both cases, the purpose is to provide care in a manner that is cheaper than care in a hospital. However, coverage is provided only if a person also needs medical care; benefits are not provided if a person is merely "old" and needs someone to care for him or her.

Medicare is also inadequate because it does not cover custodial care unless this care is needed along with the medical or rehabilitative treatment provided in skilled nursing facilities or under home health care benefits.