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. This research culminated in a Financial Innovations Lab® that brought together a curated group of cross-sector stakeholders to develop solutions that can improve access to quality affordable long-term care for middle-income households.
The percentage of adults aged 65 and older who will require a high level of LTC.
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. In 2019, the median 401(k) account balance for those 65 and older was $64,548.
• 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.
In this podcast series on aging, Nora Super joins Soledad O’Brien and Jean Chatzky to discuss the link between healthy longevity and financial wellness.Listen Now
This report lays out how technology, public-private collaboration, and adapting innovative care models can bridge the gaps in our long-term care system for middle-income Americans.Read the Report
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
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