Medicaid remained the leading source of long term care financing in 2005, accounting for almost 49% of a total annual LTC bill of $207 billion, according to a new analysis by Georgetown University researchers.

The other big federal health care program, Medicare, paid a little more than 20% of the costs, while LTC recipients or family members footed 18% of the bill out of their own pockets, analysts with Georgetown’s Long Term Care Financing Project found.

Researchers Harriet Komisar and Susan Rogers based their analysis on data from the university’s Health Policy Institute, Washington, and the federal Centers for Medicare and Medicaid Services.

Private health and LTC insurance paid just over 7% of the total, while other private and public sources together accounted for 5% of all LTC outlays in 2005.

Charities accounted for the bulk of private sources, while public sources included local, state and federal agencies, such as the Department of Veterans Affairs.

“The difficulty that the nation faces is in the distribution of these costs,” says Komisar. “Because so little is insured and falls so heavily on individuals and families to pick up expenses, that is a big cost issue. People are increasingly at a huge risk of having to absorb these costs.”

Medicaid programs, which pay for medical and LTC costs of people with limited financial means, are designed and administered by the states, subject to federal rules. All states offer home and community-based benefits for LTC to a limited number of people, rather than to all Medicaid enrollees in each state. These benefits include homemaker services and respite care.

Data compiled by Georgetown shows that while most LTC spending is for nursing home and other institutional care, an increasing amount is being allocated to care in the home or other community settings. Non-institutional care accounted for 37% of Medicaid’s LTC expenditures in 2005, in contrast to just 19% in 1995, the researchers report.

The 63% of all LTC spending that went to nursing-home care amounted to $129.8 billion. Of this, Medicare paid $59 billion, or around 45%, while Medicare paid almost $22 billion, or around 17%, Georgetown reports.

Around 25% of nursing-home costs, or about $32 billion, was paid out of pocket, while private insurance paid 7%, or $9.1 billion. The remaining $8 billion, or 6%, was footed by other sources, such as charities.

The remaining $77 billion of the total was spent on home care.

Medicaid paid 55%, or just over $42 billion of home-care costs, while Medicare paid around $27%, or $21 billion.

Around 7%, or $5.1 billion, was paid out of pocket, while private insurance accounted for a little under $6 billion, or about 8%. Other sources accounted for $3 billion, or 4%.

Lack of insurance for these costs is emerging as a critical issue, the researchers caution. “Because few people have insurance for long term care, most people face a risk of impoverishment if they need extensive care,” they warn.

Medicaid does not afford reliable protection, they say.

“Given the wide variation in state Medicaid programs and their vulnerability to changing state budgets, the security of that safety net is uncertain,” they conclude.

Georgetown’s LTC Financing Project is scheduled to end this year. By then, experts from the school’s faculty are expected to propose ideas for relieving the LTC crisis, Komisar says.