Summary: Long-term care presents a significant burden for many persons and for public programs. Long-term care in a nursing home can cost more than $40,000 per year, with many nursing home residents paying that out of their own pockets. In addition to this out-of-pocket spending, Medicaid and Medicare paid out more than $51 billion in 1995 for long-term care for the elderly. More than a million elderly persons with extensive disabilities live at home, relying on their families for assistance. The aging of the baby boomers, particularly as they reach age 85 and older, will have a dramatic impact on the numbers of persons needing long-term care and will challenge individuals, families, and public programs to finance and furnish that care. This testimony (1) provides an overview of current spending for long-term care for the elderly, (2) discusses the increased demand that the baby boomers will likely create for long-term care, (3) describes recent shifts in Medicaid and Medicare financing of long-term care, and (4) discusses the potential role of private long-term care insurance in helping to pay for this care.
