Long-Term Care: What Direction for Public Policy?

Publication Date: January 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Health

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Abstract:

The need for long-term care is expected to grow substantially in the future. While need cannot be predicted with certainty, total public and private spending for long-term care for the elderly could double from 2000 to 2025, even assuming no expansion of benefits. How these added costs would be financed is unclear.

More than $140 billion was spent on long-term care services in FY2000, representing over 12% of total U.S. personal health care expenditures. Increases in life expectancy and the impact of the aging of the Baby Boom population will dramatically affect future demand for services. Long-term care policy in the United States is based primarily on Medicaid, which finances 47% of public and private spending. Medicaid long-term care spending almost tripled during the 1990s, straining state budgets. Many people indicate that the Medicaid financing system is biased toward institutional care. Families and individuals finance about 22% of total spending on long-term care.

Issues for Congress include: how to pay for these escalating expenses; how to apportion costs among the public and private sectors; and how to help people get the long-term care benefits they both want and can afford. Although Congress has considered broad-scale reform in the past, it has primarily made incremental changes to current programs. Different directions have been suggested for long-term care policy, including additional incentives for private insurance, expanded home and communitybased services, and broader social insurance protection.