By 2060, the number of Americans 65 and over will more than double. Because old age is one of the greatest risk factors for most diseases, this will produce exponential growth in demand for health care, especially long-term care.
PEOPLE growing old in the U.S. face mind boggling out-of-pocket health care costs. Most (70 percent) will require long-term support services, costing on average $45,000 a year. Some will need extended nursing home stays, costing even more: on average $90,000 a year. Few can afford it.
Public programs do not cover these costs. Medicare, our federal health insurance for seniors, does not cover long-term care, and Medicaid, the federal-state partnership covering the poorest citizens, pays only after a person becomes impoverished. Relying on private insurance is no better — it’s harder and harder to find as insurers increase premiums and pull out of the market.
So how can we support our elder loved ones?
Look to Japan, where elders can rest assured they will be cared for. Since 2000, public, mandatory long-term care insurance has helped those needing long-term care remain in their homes as long as possible. Starting at age 40, every Japanese citizen pays a monthly insurance premium. At 65 (or sooner if they develop age-related disease), every citizen becomes eligible for home and community-based long term care, as well as skilled nursing.
Despite the moral argument for long-term care that spans the political spectrum, opponents have two major qualms with such a national program.
First, opponents say that we cannot afford long-term care. But consider that U.S. public spending on long-term care is comparable to Japan’s, but we offer none of the services Japan does. How is that possible? Japan invests primarily in home and community care, while the U.S. invests mostly in institutional services, like skilled nursing care. Keeping people in their own communities as long as possible costs less by reducing demand for expensive skilled nursing and medical care.
Opponents also claim long-term care is something we can solve within families. The stark facts suggest otherwise. While the ranks of older Americans are growing, the number of family members available to care for them is shrinking. Japan experienced this, too. A nation that epitomizes family values, Japan recognized that honoring families required supporting family caregivers, who were trying to meet the demands that family obligation placed on them.
Why hasn’t the U.S. followed Japan’s lead? The greatest obstacles, of course, are political. Congress tried and failed to pass long-term care numerous times.
How will a president-elect Trump administration approach the challenge? As a candidate, Trump insisted Congress repeal Obamacare. He vowed to replace it with Health Savings Accounts, a tax-free savings tool that can be used to pay for health care. Trump also proposed dependent care savings accounts that allow tax-free saving up to $2,000 a year for child and elder care.
Would these proposals suffice? At current savings rates, it would take about 45 years at the maximum $2,000 a year savings to accumulate enough to pay the $90,000 average amount required for just one year of nursing-home care. It would take 20 years to pay for a year of long-term care. Trump’s approach will bring little solace to current elders, to families who cannot set aside $2,000 a year, and to anyone who requires long-term care.
As president, Trump would do well to supplement individual savings accounts with additional policy plans.
As we grapple with political obstacles to meeting this moral challenge, we can learn from nations, like Japan, that have faced it. By 2060, the number of Americans 65 and over will more than double. Because old age is one of the greatest risk factors for most diseases, this will produce exponential growth in demand for health care, especially long-term care.
Simply put: It’s the elephant in the health care reform debate. One we can no longer ignore.