The availability and affordability of long-term care for aging Americans was the subject of a March 27 hearing held by the Senate Finance Committee.
Chair Charles Grassley (R-IA) said the hearing was designed “to raise awareness about the financial risk to every individual’s retirement income security posed by long-term care needs and to consider steps Congress can take to ensure that Americans are better prepared to meet long-term care challenges.”
Sens. Grassley and Bob Graham (D-FL) announced introduction of a jointly-sponsored bill (S. 627) called the Long-Term Care and Retirement Security Act. The measure would allow a tax deduction for the cost of long-term care insurance premiums. S. 627 also would offer a $3,000 tax credit for unpaid caregivers who assist a family member requiring help with at least three activities of daily living, such as eating, bathing, or dressing.
“We want to encourage the purchase of long-term care insurance, and we want to help caregivers who provide their services and help with the expenses of long-term care situations,” said Sen. Graham.
Lisa Maria B. Alecixh of The Lewin Group told the committee that insurance companies began offering long-term care policies in the mid-1980s, with 5.8 million such policies purchased by 1998. “Premium levels vary significantly depending on the level of benefits, age of purchaser, and risk factors such as smoking,” she said. The monthly premiums for similar policies could range from $274 for a 40-year-old purchaser to $7,022 for a 79-year-old purchaser, she said.
Dr. William Scanlon of the General Accounting Office testified that the number of elderly individuals is expected to double over the next 30 years, adding: “With baby boomers expected to live longer and greater numbers reaching age 85 and older, this generation is expected to have a dramatic effect on the number of people needing long-term care services.”
Women Significantly Affected
Dr. Scanlon also said there is “a wide array” of long-term care settings and services, including “institutional care provided by nursing homes for individuals with more extensive care needs, and also home- and community-based care.”
Most of the care “is provided by unpaid family caregivers,” he said, adding: “Women represent 7 out of 10 unpaid caregivers, three-quarters of nursing home residents 65 and older, and two-thirds of home health care users.” He concluded: “Given their longer life expectancies and the fact that married women usually outlive their spouses, many women face a greater risk of needing long-term care by a paid caregiver.”
Sen. Blanche L. Lincoln (D-AR) highlighted long-term care as “very much a women’s issue, which is true with most issues of aging.” She encouraged the committee and the witnesses to focus on efforts to assist women caregivers, describing her family’s own caregiving arrangements with elderly relatives. She also commented on the growing availability of adult day care centers, especially in urban areas, saying: “We have seen how productive adult day care centers can be in terms of providing a respite for caregivers.”
Gail Gibson Hunt of the National Alliance for Caregiving described “the national profile” of a family caregiver, saying it is usually “a 46-year-old baby boomer woman who works full-time and cares for her 77-year-old mother, who has a chronic illness and lives nearby. The caregiver spends an average of 18 hours per week caring for her mother and, on average, will spend four-and-a-half years doing so.”
Ms. Hunt cited a 1998 study by the United Hospital Fund, which estimated the annual value of private caregiving at $196 billion. In addition to time away from work, the average caregiver spends an estimated $170 per month on groceries, medications, home modifications, and other out-of-pocket expenses.
Carol O’Shaughnessy of the Congressional Research Service (CRS) cited statistics gathered by the Institute of Medicine showing 9 million adult Americans currently receive long-term care assistance. Of that number, 5.5 million are over age 65, while 3.5 million are adults aged 18 to 65. In addition, Ms. O’Shaughnessy said, approximately 500,000 children qualify for long-term care.
According to CRS data, federal spending on long-term care totaled $133.8 billion in FY1999. Medicaid payments accounted for 44 percent of spending, while Medicare represented 14 percent. About 25 percent came from families’ out-of-pocket spending. Medicaid covers nursing home care, as well as some home-based services. Medicare usually helps pay for part-time in-home rehabilitation or nursing services, rather than care provided in nursing homes or assisted living facilities.
Long-Term Care Initiative
Sens. Grassley and Graham noted that the 106th Congress approved a law (P.L. 106-501) authorizing a new Family Caregiver Support initiative. The program makes grants to states to provide information, counseling, support groups, caregiver training, respite services, and adult day care services for those who care for elderly relatives. The law also created a series of new demonstration programs, including one aimed at addressing violence against older women. For FY2001, Congress appropriated $125 million for the initiative, designating $5 million of those funds for Native American caregivers. “It was a beginning, but there is much more to be done,” said Sen. Grassley.