The Milken Institute Center for the Future of Aging and Innovative Finance teams have joined together to tackle one of the nation's most pressing challenges: financing and delivering long-term care (LTC). Based on extensive market research, the teams analyzed the greatest barriers to meeting the LTC needs of Americans and developed recommendations on improving LTC funding and delivery throughout the United States.
The percentage of adults aged 65 and older who will require LTC at some point in their lives.
Twice the annual income of the average older (65+) middle-income family is needed to pay for one year of nursing home care.
The number of private insurers offering long-term care insurance today, compared with slightly more than 100 in 2002.
What is Long-Term Care?
LTC is the continuum of long-term services and supports (LTSS) designed to meet an individual's health or personal care needs when they can no longer perform everyday activities on their own. LTSS includes:
• Assistance with activities of daily living (ADLs, such as eating, bathing, and dressing).
• Instrumental activities of daily living (IADLs, such as housekeeping and managing money) over an extended period.
How is Long-Term Care Currently Funded?
• Individuals and families pay 52 percent of LTC costs out-of-pocket.
• Medicaid pays for nearly 34 percent of LTC costs, primarily for low-income people or those who have spent down their financial assets to qualify for coverage.
• Private LTC insurance pays less than 3 percent. Most Americans are under-prepared to self-fund the very high costs of care, and the private LTC insurance market has suffered severe constriction in recent years.
How Prepared Are Americans to Meet Their LTC Needs?
• Today, pensions aren't available to most Americans, and very few have saved sufficiently for retirement. A typical American with savings and home equity, aged 65–74, has median financial assets of just $109,750 and only $86,800 in home equity.
• Most Americans are unaware that Medicare does not cover long-term services and supports (LTSS) and therefore have not adequately assessed care costs, insurance options, and the income/asset limits associated with Medicaid.
• On average, an American turning 65 today will incur $138,000 in future LTSS costs.
Market Scan: Future of Long-Term Care amid Current Landscape of Barriers and Opportunities
Our teams created a presentation summarizing key findings and recommendations from our landscape analysis. It provides an overview of the state of the LTC market and potential solutions to address the gaps in funding and care delivery.View the Presentation
Long-Term Care Funding and Delivery Recommendations
We shared a summary of our research with federal and state policymakers, including potential solutions to address LTC funding gaps, market failures, and care delivery needs.Learn More
Living to 100: How Will We Afford Longer Lives?
Nora Super discusses financing long-term care with the Wharton Pension Research Council.Read the Article
Innovative Strategies to Finance and Deliver Long-Term Care
Nora Super, Arielle Burstein, Jason Davis, and Caroline Servat explore new ways to finance and deliver long-term care for an article in the Wharton Pension Research Council.Read the Article