Study Finds That the Need for Long-Term Care Insurance May Be Overstated
A new study by Boston College's Center for Retirement Research indicates that purchasing long-term care insurance makes finan...Read more
[This article was originally published on December 29, 2008. The links were updated on June 13, 2018.]
Certainly, the current economic downturn is not going to affect the needs of some seniors for help with activities of daily living. But it could affect where that help is provided -- at home, in assisted living or in a nursing home. And it could affect who provides the care -- a family member or someone who is hired.
Here are a few likely trends:
Most nursing home care and, increasingly, care at home as well, is covered by Medicaid. This is a joint state-federal health care program for people who are "poor" under its complicated rules. Even before the current recession, Medicaid was growing and straining the ability of states to pay the cost. This has caused states to restrict eligibility for benefits. Such restrictions are likely to tighten further.
With fewer people working, more will be available to care for family members at home, perhaps delaying or avoiding the move to assisted living or a nursing home.
With money becoming scarcer for just about everyone, families will be more reluctant to pay for nursing home, assisted living or home care. This may result in more beds and services being available and a decrease in costs. In fact, according to the 2008 MetLife Market Survey of Nursing Home & Assisted Living Costs, over the past year the cost of semi-private rooms in nursing homes increased just 1.1 percent and the cost of private rooms did not change, in contrast to increases that substantially exceeded the inflation rate in most recent years.
We are likely to see bankruptcies of nursing homes and assisted living facilities if they cannot fill their beds as anticipated and if Medicaid and Medicare reimbursement rates are insufficient to cover their expenses. Facility shut downs will be very disruptive to residents as well as to their families.
With alternative jobs less plentiful, the supply of qualified care providers should grow.
Planning ahead is even more important, whether purchasing long-term care insurance, protecting assets to qualify for Medicaid, or simply making one's wishes known ahead of time.
Even prior to the onset of the recession, many more alternatives to nursing home care were being developed, including assisted living, new home care models, community partnership programs, and increased Medicaid coverage of care provided in the community. Anyone providing care for a senior needs to do much more research about the alternatives available.
These changes are not all bad. Fewer Americans working quite as hard as most adults have in recent years should allow more time for us to care for our loved ones and to find the right solutions among the increasing number of care choices available.
A qualified elder law attorney can help your family explore care alternatives and how to pay for them. To find an attorney near you, click here.