Evaluating Hardships Faced by Elderly Americans Requiring Long-Term Care and Support

Elderly adults suffering functional and cognitive impairment often have no choice but to endure substantial out-of-pocket expenses to cover the long-term services and support (LTSS) they require, according to a new study by The Commonwealth Fund. LTSS is not covered by Medicare, placing the burden of financing these necessities on afflicted individuals and their families.

Analysis of the National Health and Aging Trends Study (NHATS) from 2015 suggests that individuals with a single or multiple LTSS needs can amass financial burdens more than 2 to 3 times higher than those with no LTSS requirements. Figures from the NHATS show that Medicare beneficiaries with no LTSS needs accumulate an average annual Medicare cost of $5389, whereas individuals with a single need collect an average of $11,938 and those with high LTSS needs (2 or more) garner a vast average of $15,109. Without reflecting the costs of premiums that Medicare recipients must pay, beneficiaries with high LTSS needs are responsible for paying an average out-of-pocket expense of $2759, which is more than double the cost of those without LTSS needs ($1347), and marginally higher than those with a single or lesser LTSS needs ($2337).

“In the past 50 years, the needs of Medicare beneficiaries have evolved beyond what the program covers to encompass both health and LTSS needs,” wrote the researchers. “Without significant updates to the program, many beneficiaries will continue to face significant financial burden, delay necessary care, and experience avoidable adverse outcomes.”

Many Medicare beneficiaries have no choice but to use credit cards to fund the costs of medical care and LTSS. However, while individuals with high LTSS also have the highest out-of-pocket spending, they are less likely to own a credit card (24.1%) than individuals with a single LTSS need (20.3%) or no LTSS needs (15.3%). Research has shown those with high LTSS needs who credit cards take longer to pay off their balances than individuals with a single or no LTSS needs (7.5% with high LTSS needs pay the minimum opposed to 6.8% with lesser LTSS needs and 4.3% with no LTSS needs), that the majority of their balance is derived from medical costs, their debt is constantly increasing, and they become more dependent on credit cards to cover their healthcare needs.

“If they are not able to access the care they need, carry out their medical care plan, or safely perform ADLs [activities of daily living], older adults are likely to experience worse outcomes and become even more costly to the health care system,” explained the researchers. “Additionally, not being able to pay for housing costs or nutritional needs places older Medicare beneficiaries at risk of expensive nursing home placement.”

The majority (66.7%) of elderly Medicare recipients require at least one type of LTSS or struggle to perform essential ADLs including walking, eating, dressing, or using a lavatory. Services vary in both type and intensity and include utilization of assistive devices, essential home modification, personal care, transportation, meal delivery services, and more. It was found that 33.4% of Medicare recipients use LTSS for a single ADL while another 33.4% require 2 or more services.

It is imperative that elderly patients receive the help they need to survive. The authors acknowledge, “Not receiving assistance may lead to severe adverse consequences for older adults, including an inability to pay for food, rent, or utilities that provide light, heat, or warm running water … older Medicare beneficiaries with the greatest LTSS needs are more likely to experience these adverse consequences than those without such needs.”

As the need for LTSS among elderly individuals remains extremely high, the Medicare program lacks a solution to alleviate the financial hardships placed on them and their families. Regarding qualified low-income (less than $24,000 annually) beneficiaries, state Medicaid programs provide some but not all the funding they require. However, the extent of Medicaid assistance varies by state, and 1 out of 3 destitute individuals do not qualify for support. It was found that 25% of all Medicare recipients spend 20% or more of their income on premiums and out-of-pocket health expenses.

“Our findings also point to the importance of Medicare coverage of personal care services to enhance access to needed care, reduce the financial burden of out-of-pocket expenses, and prevent or delay entry into long-term nursing home care,” wrote the researchers. “This analysis shows that the average expenditure on personal care services for those with high LTSS need receiving paid help is nearly $10,000 a year. Adding to Medicare coverage a targeted personal care benefit that provides up to $400 a week would substantially alleviate this financial burden while also helping people live independently.”

While US policy makers and researchers have long debated methods of expanding coverage for individuals requiring LTSS, no infallible system has been designed. In 2010, the Community Living Assistance Services and Supports Act was signed into law along with the Affordable Care Act but was found to be unsustainable by HHS and was subsequently eliminated.

The authors concluded, "Without an affordable, sustainable financing solution, Medicare beneficiaries with LTSS needs will continue to be at greater risk of delaying necessary care, being placed in a nursing home prematurely, and having to 'spend down' into the Medicaid program."