Long-term Care: A Long-term Problem

Long-term services and supports are those services people need to perform their daily activities due to physical, cognitive or mental disabilities.  They range from nursing facility care to help at home with bathing or feeding. 

This is definitely not something most people like to think about.  But ever since it was created, the Colorado Health Institute has been beating the drum about the importance of controlling the growth of Medicaid long-term care expenditures in the face of a rapidly aging population.  And if the increasing attendance at our legislative roundtables on long-term care is any indication, legislators understand the urgency as well.

While 70% of individuals over the age of 65 are expected to need long-term care services at some point in the remainder of their lives, only 10% have private long-term care insurance.  Why the mis-match?  Many folks figure that once they reach the age of 65, they’ll be on Medicare.  It’s a real eye opener when they find out that Medicare doesn’t have a substantive long-term care benefit.  When disenchanted elders then seek coverage in the private long-term care insurance market, premiums are often out of their price range. 

That’s where Medicaid comes in.  Medicaid does have a long-term care benefit, but there’s a catch.  Unlike Medicare, it’s for low-income individuals.  If people don’t qualify for Medicaid, they must use their own resources to pay for long-term care services.  Those services are so expensive that their savings quickly dissipate, they become low-income and then they qualify for the program.   In Medicaid lingo, this is known as “spending down” and it can be a painful process for individuals, their families and the taxpayer dime.    

The 65 and older population in Colorado is expected to increase from 420,000 in 2000 to a whopping 1.2 million 2030.  Unless policies are implemented to increase the uptake of private long- term care insurance or to make it more affordable, the already strained Medicaid long-term care system will be overwhelmed with users.  

Policy solutions can range from increased public awareness about the limits of Medicare, encouraging younger people to purchase private long-term care insurance as part of their retirement planning, modifying the tax code to include incentives for the purchase of long-term care insurance to educating people about the various types of private policies available.

Here at CHI we are thinking about and weighing these options.  There are about 1.2 million reasons that it’s important to make sure that Colorado’s leaders have good information to tackle this issue.

Amy Downs is a vice president at CHI.