GAO Long Term Care Study
Baby Boom Generation Will Greatly Expand Demand for Long-Term Care
It is difficult to precisely predict the future increase in the number of the elderly with disabilities, given the counterbalancing trends of an increase in the total number of elderly and a possible continued decrease in the prevalence of disability. The number of elderly with disabilities remained fairly constant from 1982 through 1999 while the percentage of those with disabilities fell between 1 and 2 percent a year from 1984 through 1999. Possible factors contributing to this decreased prevalence of disability include improved health care, improved socioeconomic status, and better health behaviors. The positive benefits of the decreased prevalence of disability, however, will be overwhelmed by the sheer numbers of aged baby boomers. The total number of disabled elderly is projected to increase, with estimates varying from an increase of one-third to twice the current level, or as high as 12.1 million by 2040.
The increased number of disabled elderly will exacerbate current problems in the provision and financing of long-term care services. For example, in 2000 it was reported that approximately one in five adults with long-term care needs and living in the community reported an inability to receive needed care, such as assistance in toileting or eating, often with adverse consequences.
In addition, disabled elderly may lack family support or the financial means to purchase medical services. Long-term care costs can be financially catastrophic for families. Services, such as nursing home care, are very expensive; while costs can vary widely, a year in a nursing home typically costs more than $50,000, and in some locations can be considerably more. Because of financial constraints, many elderly rely heavily on unpaid caregivers, usually family members and friends; overall, the majority of care received in the community is unpaid. However, in coming decades, fewer elderly may have the option of unpaid care because a smaller proportion may have a spouse, adult child, or sibling to provide it. By 2020, the number of elderly who will be living alone with no living children or siblings is estimated to reach 1.2 million, almost twice the number without family support in 1990.12 In addition, geographic dispersion of families may further reduce the number of unpaid caregivers available to elderly baby boomers.
Public and private spending on long-term care was about $183 billion for persons of all ages in 2003. CBO projected in 1999 that long-term care spending for the elderly could increase by more than two-and-a-half times from 2000 to 2040. A 2001 study projected that these expenditures could quadruple from 2000 through 2050, reaching $379 billion in 2050.13 (See fig. 5.) Estimates of future spending are imprecise, however, due to the uncertain effect of several important factors, including how many elderly will need assistance, the types of care they will use, and the availability of public and private sources of payment for care. Absent significant changes in the availability of public and private payment sources, however, future spending is expected to continue to rely heavily on public payers, particularly Medicaid, which estimates indicate paid about 35 percent of long-term care expenditures for the elderly in 2004.