An aging population combined with high levels of disability associated with age indicates a likely substantial increase in financing needs of long-term care in the future, which may aggravate the problems with the current system. But this is not the only reason why the demand for long term care has become a growing dilemma to many today. There’s more. A study revealed that long-term care is the main cause of skyrocketing out-of-pocket costs. Today, only few people have insurance against the high cost of long-term care. In fact, Medicare does not cover long term care and only 9 percent of the population over 55 years had some type of private health insurance which has limited coverage. And others depend on Medicaid, a means-tested welfare program, to pay for their long-term care services. In addition, public spending, particularly Medicaid and Medicare are significant and likely to increase with the growing need for long-term care. Long-term care accounts for about one third of total Medicaid spending. In the past, it was projected that costs for the elderly would be about double in constant dollars between 2000 and 2020 which is actually happening now. Also, although older people prefer the system of home and community-based services, long-term care financing and delivery focused on institutional care. In 2004, data showed 20 percent of Medicaid long-term care expenditures for people aged 65 and older opted to home and community services. Moreover, quality of services of long-term care is often problematic. Statistics showed in 2005, approximately 16 percent of the establishments mentioned was the quality of care problems that have caused harm or immediate danger to residents. Plus, there is a lack of workers of long-term care due to their high turnover and low education level. This in effect led to the decline of delivery systems which includes informal care, paid home care, residential care facilities and nursing homes. The social and demographic changes pose additional challenges as well. Disabled older population will grow faster than the younger population, likely to increase the economic burden of long-term care. The rapid growth of the population will significantly increase the number of seniors using paid long-term care. These in effect lead to total paid hours of home care would almost quadruple in the high disability scenario. As a solution, Medicaid and Medicare expansions could make paid services more affordable. But, since there is also shortage in terms of workers, problems in recruiting and retaining long-term care workers limit the availability of paid services and increases in costs as well.
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