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The Changing Face of Elder Care
The U.S. population is aging.
As population ages,
options soar — but so do costs
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Business New Haven
3/8/1999
By: Kristine Hansen
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Census bureau information shows that the period from 1980 to 1995 witnessed a 28-percent growth in the 65-plus age group, bringing the population to an all time high of 33.5 million. Starting in about the year 2015 the 75 million-strong baby boomer crowd (born from 1946 to 1964) will begin to swell those numbers even more.
According to figures projected by the Administration on Aging, by the year 2015 there will be 45.6 million Americans 65 or older, 53.2 million by year 2020 and 61.9 million by 2025.
Projections for this age group for the years 2030, 2040 and 2050 bring the numbers to 69.4 million, 75.2 million and 78.9 million respectively.
Connecticut will likewise feel the impact of this aging population. Compared to 467,000 state residents 65 or older in 1995, the Administration on Aging projects that by the year 2015 that age group will grow to 526,000, and to 671,000 by the year 2025.
The state's Office of Policy & Management has projected that resident 65 and older will comprise 18 percent of the state's population by 2020.
What vision of the future does this hold: overcrowded nursing homes, destitute elderly begging for care, unbearable financial strains for families?
Services available to older adults are a function of the payment mechanisms connected to individual programs such as Medicare, Medicaid or private pay.
In 1998 the state's Department of Social Services expenditures were approximately $1.2 billion for adults aged 60 or above, with about ten percent of the state's budget going toward long-term care. Approximately 50 percent of all Medicaid funding is marked for long term care of the elderly.
David J. Guttchen, chairman of the state's Long-Term Care Planning Committee, explains, “The Medicare program is fully funded by the federal government and will pay, if certain requirements are met, up to 100 days for skilled nursing care. But this is strictly for the short term.”
For long-term care, the burden falls either to private pay by the patient or insurance policy or through the Medicaid program. Under Medicaid, patients must use up their own assets, thus becoming impoverished, in order for Medicaid to begin payments. Says Guttchen, “Two-thirds of the people in Connecticut nursing facilities are under the Medicaid program.”
The state has been working to develop a system that provides the elderly with needed long-term care as well as an expanded financing system to pay for it.
The Connecticut Partnership for Long-Term Care is a seven-year-old partnership between participating insurance companies and State of Connecticut Medicaid program. It is administered by the Health & Human Services Unit of the Office of Policy & Management in conjunction with the Department of Insurance and Department of Social Services (DSS).
Through a grant from Robert Woods Johnson Foundation, the state is trying to adjust the method of payments for long-term care by offering long-term care policies that protect the assets of the patient.
Under a long-term care policy, the insurance picks up the long-term care costs up to the limits of the policy. The partnership requires strict consumer-protection clauses such as minimum benefits and inflation protection.
As a carrot to purchase the coverage, the consumer would be allowed to keep her/his assets up to the value of the limit of the policy. Patients would be allowed to move into Medicaid while still retaining that portion of their protected assets. The plan therefore transfers some of the costs of long term care to private insurance.
Although available for some time, the partnership has not taken off until recently. With an improved economy and strong efforts by the state to advertise the program, participation has grown.
In 1997, policy sales increased three times over the prior year. Other options available in Connecticut are long-term care insurance policies without an affiliation to the partnership, and reverse-mortgage arrangements that can be used to assist in the payment of at-home care.
The U.S. Administration on Aging has determined that 21 percent of adults between 65 and 74 will require some assistance in their daily routine. The percentage increases with age: 35 percent of those 75 to 84 need assistance, as do 58 percent of those 85 and over.
In Connecticut the Department of Social Services (DSS) administers most public long-term care for older adults through its Elderly Services Division. There are many programs available and as of last June, average monthly participation for those 60 and older was approximately 57,000, with about 30,500 residing in nursing facilities. Programs include:
In-home care that provides licensed nursing, homemaker, rehabilitation and other services for those who are still well enough to remain at home.
Says Darlene O'Connor, DSS project director for integrated care, “Generally, at-home care is about one-third of the average cost for in-facility care paid by Medicaid.” There are a variety of payment mechanisms for this type of care, including private pay and Medicare.
Respite care provides relief services to the caregiver to get the time to do errands. The site could be at home or in another facility. Respite care service may or may not be licensed, depending on the level of care needed.
Adult day care provides a safe daytime place for seniors, providing nursing, recreation and other services. The patient returns home for the remainder of the day. These facilities are not state-licensed but are certified by CAADC, the adult day-care association.
Congregate housing provides apartment living on a rental basis with services that may include transportation, meals and recreation. These facilities are not state-licensed.
A residential care home is also congregate housing, but offers assistance to residents in a single room, not apartment, setting. These are state-licensed.
Continuing Care Retirement Communities (CCRCs), also termed “life care,” offers apartment living in retirement communities and may offer life care, which guarantees medical care and nursing home. Partial or unbundled packages of care may be offered.
Entry fees are required and can be sizable, to the six-figure range, along with monthly fee. These facilities are not regulated in Connecticut but are required to register with DSS. However, certain CCRC functions are licensed and inspected, such as home care and nursing home beds.
For some time there has been a moratorium on the addition of beds for nursing home facilities in the state. Department of Public Health projections indicate that by the year 2000, the state will require a total of 31,642 beds but also projects a surplus of beds for that year.
However, demographics are changing and the department projects the need for 32,090 beds by 2005 meaning that there will then be a shortage in the state. The department also projects by that year a shortage in certain health-care professionals such as nurses, physical therapists, social workers and home-health aides.
Nursing homes may be convalescent or rehabilitation facilities for intermediate care or skilled nursing care for patients requiring more services.
Barbara Andrews, vice president in policy research for the Connecticut Association of Not-for-Profit Providers for the Aging, says, “Approximately 25 percent of beds in Connecticut and less than 25 percent of facilities are owned by non-profit groups.”
Many for-profit facilities operate under a variety of ownership arrangements including national or Connecticut-based, large or small chains, or individual ownership.
Nursing homes are regulated by DPH and DSS and are state-licensed. The number of individuals in nursing home beds has decreased because many more are able to stay home with the advent of in-home care. However, nursing home occupancy in Connecticut is high compared with other states.
Guttchen explains that the average cost for one year, private-pay, in a nursing home is about $75,000, roughly $202 per day. Connecticut is the second-highest (after Alaska) for daily cost of nursing home care. Massachusetts comes in at $201 per day.
The cost of living in the Northeast, as well as higher labor costs, contribute to the expense of nursing home care in the state. Of that, Guttchen says, “Medicaid pays about 50 percent of the cost, Medicare about 11 percent, private pay about one-third and about five percent is paid through insurance policies.”
A new trend in Connecticut is the assisted living facility which offers personal care in apartment settings. These facilities are state-licensed and operate under regulations that became effective in 1995.
These facilities have been cropping up either operated or owned by national companies such as Marriott Corp. and Care Matrix or Connecticut companies such as Bridges Communities and Athena.
Dee Green, director of sales and marketing at Edgehill, a Stamford life-care community, calls assisted living “the industry of the future.” These facilities solve some of the problems of seniors, especially those who want to maintain some independence in their own apartments and those who do not need the extent of care offered in a nursing home.
Says David Vail, a principal of New London-based Bridges Communities, “Ninety-five percent of older adults want to live at home as long as possible.” There may come a time when some help is needed and the assisted living facility offers that solution.
Vail projects that Connecticut will see a “need for over 20,000 assisted-living units within the next ten years.” But he cautions that some areas may become overbuilt with such facilities while other areas go wanting. The advantage? The cost of living in such a setting. says Vail, “is 40 to 70 percent of the cost of nursing-home care.”
However, most assisted-living establishments here are private-pay and can be very expensive, anywhere from $2,000 to $5,000 per month. Nancy Sheehan, director of the Storrs division of the University of Connecticut Center on Aging, says, “The state is recognizing that assisted living is important and is trying to make it affordable.” In a pilot program the state is embarking on a project to provide more affordable assisted living facilities.
One such project is St. Jude Common in Norwich, a congregate living facility. Assisted-living services will be targeted to those residents who find that they need help. The state is also planing to build pilot sites for assisted living facilities in other parts of the state.
Connecticut is developing ways to make available appropriate care to seniors at many levels of need, and is directing efforts to deal with financing. But not all of the questions have been answered.
Are there enough resources to assist all who need care without waiting lists? Will patients' Medicare coverage be accepted at an elder-care facility for their medical care? What happens when assisted-living residents use up all of their own personal resources for payment? Is there enough money to go around?
As an industry, elder care is wide open to new and innovative ideas in dealing with the needs of an aging population. Caring for the elderly is becoming a critical issue as more and more people grow older.
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