Between now and 2030, it is anticipated that the number of people needing long-term care is likely to double.¹ Without changes in financing arrangements and in the organization of service delivery, access to needed care in the future could be more difficult to obtain, even for the well to do, than it is today.

“State Medicaid programs, which currently pay for a substantial share of long-term care, will feel even greater pressure.”

In large part this is because, after 2015, the number of people needing assistance is likely to be growing faster than the number of people available to provide long-term care.

This demographic is driven by the fact that the populations at greatest risk are less likely to have had children and if they did, they were more likely to have had fewer children, on average, to depend on for assistance than in previous generations. Moreover, this decline in fertility rates will have also slowed the rate of growth in the labor force, making it more difficult for long-term care providers to recruit workers.

State Medicaid programs, which currently pay for a substantial share of long-term care, will feel even greater pressure. As the number of people needing assistance increases faster than the number of people available to provide assistance, the costs of care will increase. Higher costs may result in larger proportions of persons who need long-term care at risk for more hospitalizations and impoverishment and therefore more applications for public assistance through Medicaid.

Currently there are relatively few options for persons to better plan for long-term care. Long-term care insurance is the most promising, but current products are not sufficiently comprehensive nor are they without their own risks. Nevertheless, virtually all public policy initiatives outside of Medicaid are directed at encouraging more people to purchase long-term care insurance. Medicaid has been focusing on improving the effectiveness and efficiency of targeting services and expanding home and community based care as a way of reducing nursing home expenditures.

The article above is a summary of an issue brief written for the New Jersey Policy Forums on Health and Medical Care. The complete brief defines long-term care, some of the issues surrounding the financing and delivery of care, and a few of the policy options under consideration by states and the United States Congress.

To download a pdf of the 16-page issue brief, click on Financing Long Term Care in New Jersey and Across the Nation. Click here for a list of Health Policy Forums and related issue briefs by topic.

¹ U.S. Department of Health and Human Services (HHS) & U.S. Department of Labor (DOL) The Future Supply of Long-Term Care Workers in Relation to the Aging Baby Boom Generation: Report to Congress (Washington, DC: Office of the Assistant Secretary for Planning and Evaluation, 2003), http://aspe.hhs.gov/daltcp/reports/ltcwork.htm.