Americans are spending billions of dollars each year on long-term care for older adults, and many are struggling to figure out how to pay for care for a loved one, or how to fund future care for themselves.
According to a 2017 survey from the Associated Press-NORC Center for Public Affairs Research, only about one-third of Americans age 40 and older have set money aside to pay for their own long-term care expenses.
Additionally, only 15 percent of respondents said they feel "very" or "extremely" confident they’ll have the financial resources to pay for those long-term care expenses.
"Wherever I go … if I’m just talking with people, everyone has a story about trying to make long-term care work for someone in their family, and the economics of this are really important," said Christine Bishop, professor of economics at the Heller School at Brandeis University in Massachusetts.
It’s estimated the number of adults 65 or older will grow to 98 million by the year 2060. That’s double the number of what was reported in 2014.
That means figuring out how to pay for this care will only become more important in the coming years and decades. And Bishop, who was a senior staff member on a U.S. Senate commission on long-term care in 2013, is trying to figure out how to do just that.
While many think Medicare will help cover the costs, Bishop said that’s not always the case. While Medicare may pay for skilled nursing after a hospital admission, and some home health, she said the program doesn’t covered so-called "function" care for older adults.
"Everyday tasks of daily living become difficult for people with functional impairment, and help with eating, with getting around, with dressing, with grooming, with getting to the bathroom, are just not covered by Medicare," she said.
That cost of caregiving, Bishop said, is at the core of this.
"We do have a basic fundamental issue that long-term services and supports require hands-on care from another person, real services from an individual who is going to help the client," she said. "That means as our economy keeps going, and productivity goes up in other areas, we’re going to have to have to pay these people a wage to draw them into the market."
There’s also the issue of unpaid caregiving, which isn’t necessarily reflected in the data, but is one of the biggest things that needs to be addressed going forward.
"The biggest cost is the time and effort of family and friends, informal caregivers who are spouses and adult children and friends, and they’re not paid," Bishop said. "Sometimes they’re thought of as free care, but this is also a huge resource for our care needs."
Bishop said bringing down costs will require more buy-in from the public and policymakers that long-term care should be considered as something we’re all responsible for.
"This has been seen as an individual and family responsibility, and it’s hard to move the needle, to get people to think about sharing it across many people," she said. "I believe we need to have some kind of public program that’s going to make sure that people are sharing these costs."
What that might look like is still unknown, but we could see solutions in the coming years.
"This has been on the backburner in recent years, partly because of how important solving our health insurance situation has been," Bishop said. "We do need to solve the health insurance issues first, but there are groups in Washington who are trying to get together in a bipartisan way and think about how we should be financing long-term care. So there is some hope on the horizon, I would say."
Bishop also suggested looking abroad for ideas.
"Germany and Japan and some other countries really have made this a part of their social insurance scheme, to make sure that there is a basic level of long-term services and supports that people will have access to," she said.
In the meantime, states may need to be the ones to come up with new ideas for pay for long-term senior care. Bishop referenced efforts in Hawaii to pass universal long-term care for older adults, and while she acknowledged Hawaii’s approach may not work for other states, it’s a good start.
"States may have to step up on this, and be the lead on it," she said.