Long-term Prognosis

Assisted living, home care, on the rise for elderly

The share of older people residing in skilled nursing facilities declined from 4.5 percent in 2000 to 3.1 percent in 2010, while the share of those in other long-term care facilities, such as assisted living, has been growing. These are among the facts presented by the U.S. Census Bureau in its recently released report, 65+ in the United States: 2010.

The facts from the report bear out conventional wisdom: America is getting older. In 2011, the Baby Boom generation – people born from 1946 to 1964 – began to turn age 65. As this cohort ages, the United States will experience rapid growth in both the number aged 65 and older and their share of the total population. The social and economic implications of the aging of the U.S. population will be of significant interest to policy makers, the private sector, and individuals, and will have an impact on long-term care.

Following are some of the report’s key findings related to long-term care.

• According to the 2010 Census, 3.1 percent of the older population resided in skilled nursing facilities, down from 4.5 percent in 2000.
• The share of the older population residing in nursing facilities rises progressively among older age groups, from 0.9 percent for the population aged 65 to 74, to 3.2 percent for those aged 75 to 84, and to 11.2 percent for those aged 85 and over. In addition to those residing in skilled nursing facilities, another 2.4 percent of older people resided in senior housing facilities that offered one or more special support services.
• While the share living in nursing homes is down, the share in other care settings, such as assisted living facilities, has been growing. Among Medicare enrollees residing in a long-term care facility, the proportion living in an assisted living facility increased from 15 percent in 1992 to nearly 25 percent in 1998, as based on the Medicare Current Beneficiary Survey.
• There were 31,100 residential care facilities, such as assisted living facilities and personal care homes, with 971,900 beds nationwide, according to data from the 2010 National Survey of Residential Care Facilities. The vast majority (91 percent) of residents in these residential care facilities were non-Hispanic white, and 70 percent were female. More than half (54 percent) of the residents were aged 85 and over, and more than a quarter (27 percent) were 75 to 84 years old, while 9 percent were aged 65 to 74, and 11 percent were under age 65.

The cost and funding of long-term care

• Medicaid funds for long-term care have been shifting away from nursing homes, with funding for home- and community-based services increasing from 13 percent of total funding in 1990 to 43 percent in 2007.
• The cost of long-term care varies by care setting. The average cost of a private room in a nursing home was $229 per day, or $83,585 annually, in 2010. Average assisted living rates were $3,293 per month or $39,516 annually. For in-home care, rates averaged $21 per hour for home health aides and $19 per hour for homemakers. Adult day care centers cost on average $67 a day. However, the average cost varies widely across states. Increases in the costs of these options have also varied. For instance, from 2005 to 2011, the cost of nursing home care and assisted living facilities rose by 4.4 percent annually, compared with just 1.4 percent annually for home health aides.
• Less than one-fifth of older people have enough personal resources to live in a nursing home for more than three years, and almost two-thirds cannot afford even one year. Out-of-pocket expenses accounted for only 28 percent of total long-term-care spending in 2006.
• The largest share (43 percent) of long-term-care expenditures was covered by Medicaid. This is more than Medicare (18 percent) and private long-term-care insurance and Medigap combined (7 percent). Medicare provides skilled nursing home coverage to aged and disabled patients for only short time periods after hospitalization.
• Residential care facilities, in general, provide care to a more affluent population. Assisted living facilities largely have residents who self pay. In 2010, Medicaid, which is available to low-income individuals, paid for at least some services for 19 percent of residents in residential care facilities, with Medicaid services more common for younger residents than for older residents. Other researchers found that assisted living facilities are more often located in areas where there is higher educational attainment, higher income, and greater housing wealth.

Home and community-based care

• The distribution of Medicaid funds has been shifting towards home- and community-based services. Such options for long-term care are increasingly popular, in part because of people’s desire to remain in their own homes. It has been reported that almost 90 percent of adults aged 50 and over want to stay in their own home as long as possible. In addition, health insurance providers are increasingly funding non-institutional care options, which are cheaper than institutional care.
• Medicaid can provide home- and community-based services to three people for the same cost as one patient in a nursing home. Funding for home- and community- based services increased from 13 percent of total funding in 1990 to 43 percent in 2007. The growth of such options may help to explain the decline in the proportion of older people who reside in nursing homes.

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65 and up: Key findings

• In 2010, 40.3 million people were aged 65 and older, 12 times the number in 1900.
• The percentage of the population aged 65 and over among the total population increased from 4.1 percent in 1900 to 13 percent in 2010, and is projected to reach 20.9 percent by 2050.
• From 2010 onwards, the older dependency ratio is expected to rise sharply as the Baby Boomers enter the older ages. In 2030, when all Baby Boomers will have already passed age 65, the older dependency ratio is expected to be 37, which translates into fewer than three people of working age (20 to 64) to support every older person.
• In 2010, Alzheimer’s disease was the fifth leading cause of death among the older population, up from seventh position in 2000. In contrast to declining mortality from most other causes of death, the death rate for Alzheimer’s rose more than 50 percent from 1999 to 2007.
• More than 38 percent of those aged 65 and over had one or more disabilities in 2010, with the most common difficulties being walking, climbing stairs, and doing errands alone.
• States with the highest proportions of older people in their populations in 2010 were Florida, West Virginia, Maine, and Pennsylvania (all above 15 percent).
• The West and South regions experienced the fastest growth in their 65-plus and 85-plus populations between 2000 and 2010.
• Changing marital trends, such as the rise of divorces, as well as the increase in living alone among the 65-and-over population, will likely alter the social support needs of aging Baby Boomers.

Source: 65+ in the United States: 2010, U.S. Census Bureau, http://www.census.gov/content/dam/Census/library/publications/2014/demo/p23-212.pdf