States from Louisiana to Wisconsin to Washington state have set up study commissions or advisory panels to explore ways to provide or fund long-term care for an aging population.
And while Congress repealed a long-term care insurance program that was originally part of the Affordable Care Act because it was not financially viable, many states are using federal dollars from the ACA to fund other long-term care services with the permission of federal administrators. The programs are aimed at allowing seniors and the disabled to receive care and age in their homes or transition into the community from institutional settings.
State officials face a huge challenge. More than 6 million Americans are 85 or older. That number will jump to almost 9 million in 2030 and nearly 18 million by 2050.
"Long-term care is going to be a serious problem for the states, in terms of Medicaid," said Robert Moffit, a senior fellow at the conservative Heritage Foundation and member of the Maryland Health Care Commission. "And it's going to get larger and larger as baby boomers jam the system."
Help with Daily Living
Most long-term care isn't medical. It's a range of services that help frail elderly or disabled people with their daily living activities, from bathing and using the toilet to cooking and taking medications. It can be provided in a person's home or in an institutional setting, such as a nursing home.
The federal government requires that state Medicaid programs pay for nursing home care for low-income seniors and disabled people. But individual states decide whether to cover home- and community-based services. Many seniors who want to remain in their homes rely on family and friends for help. If that's not possible, they pay for such care out of pocket until they spend down their assets to qualify for Medicaid. At that point, the burden shifts to state government.
State Medicaid directors know all too well about the enormous challenges they'll face as 75.4 million boomers — now ages 52 to 70 — grow old.
"The impact is going to be huge," said Matt Salo, executive director of the National Association of Medicaid Directors. "While the face of Medicaid is pregnant women, kids and low-income working families, that's not where most of the money is going."
Nearly two-thirds of all Medicaid spending on services is for seniors and people with disabilities, who together make up only a quarter of those enrolled in Medicaid.
Medicaid pays for 52 percent of all long-term care, according to the Kaiser Family Foundation. A recent report found that federal and state Medicaid spending on long-term care in 2014 was about $152 billion.
For decades, the bulk of Medicaid long-term care dollars went to care for older adults and disabled people in nursing homes and other institutions. But that trend has shifted, as states react to financial pressures and people prefer to get services in their homes. In 2014, 53 percent of Medicaid long-term funding was spent on home and community-based care.
Either way, long-term care is expensive. This year’s median annual price of a private nursing home room is $92,378 and a “semi-private” shared room is $82,125. In-home health aide services cost $46,332 and adult day care is $17,680.
About a quarter of boomers turning 65 between 2015 and 2019 will require long-term care that will cost at least $100,000 over the course of their lifetimes. Nearly two-thirds of that group will have to pay at least that much out of pocket, according to a report by the US Department of Health and Human Services and the Urban Institute.
People can buy private long-term care insurance coverage, but most don't. Only about 16 percent of those 65 and over who can afford it and are ineligible for Medicaid have the insurance. Only about 5 percent of those aged 45 to 64 do.
In recent years, some companies that sell long-term care insurance have hiked rates and reduced benefits. Others have exited the market. And many people can't afford it. The average annual premium in 2015 was $2,772.