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Life Health > Long-Term Care Planning

A Look At Boomers' Impact On LTC Resources

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A recently published study by the Urban Institute shows that even under the most favorable foreseeable conditions, long term care burdens on families and institutions will increase substantially over the next 30-plus years.

The report examines the impact of the expected collision between a growing demand for LTC services and a declining population of caregivers.

Population aging, especially when boomers reach age 85 and older, points to a likely surge in the use of LTC services, notes the report, “Meeting the Long Term Care Needs of the Baby Boomers.”

Urban Institute researchers foresee additional challenges from changing demographics caused by a continued rise in divorce rates, increasing childlessness and declining family sizes. The rising labor force participation of women could also reduce their ability to provide informal care, and it is uncertain whether men would fill the gap, note the researchers, Richard W. Johnson, Desmond Toohey and Joshua M. Wiener.

The future demand for LTC depends a great deal on how old-age disability rates evolve over time, they note. Although recent evidence has shown health improvements among older people, there is no guarantee these trends will continue, the study points out. Disabilities stemming from the increased incidence of diabetes and obesity seen in younger people might offset the future decline in disability rates at older ages.

The analysis combines results from new models of current LTC use with projections of the size and characteristics of the future population until 2040. Population projections were based on Dynasim3, the Institute’s simulation model of the older population.

The researchers estimated current LTC demands based on data from the 2002 Health and Retirement Study, a national survey of older Americans. The projections show how changes in disability levels, financial resources, children’s availability and other characteristics could affect the future demand for LTC services, both paid and unpaid.

The report projects 3 scenarios, based on different disability projections.

The high disability scenario assumes that old-age disability rates will increase by 0.6% per year from 2000 to 2014 and remain constant thereafter, reflecting recent disability increases at younger ages.

The low disability scenario assumes that overall old-age disability rates will decline by 1% per year for the foreseeable future.

The intermediate scenario, which represents the institute’s best guess of the future size of the frail older population, does not assume any particular trend in disability rates. Instead, projected rates depend on changing mortality rates, educational attainment, income levels and age and race distributions.

The intermediate disability growth scenario sees disability rates at ages 65 and older falling by a few percentage points between 2000 and 2020, then rising to some extent through 2040 as the earliest boomers reach their 80s. Between 2000 and 2040, this scenario projects that old-age disability rates will fall from 30% to 28%.

Because the overall size of the older population will grow fast, the number of disabled older Americans will also skyrocket in coming decades. Between 2000 and 2040, the number of older adults with disabilities will more than double, from about 10 million to about 21 million, according to the institute’s intermediate disability scenario.

This means the disabled older population would grow faster than the younger segment, which is likely to bear the increasing economic load of LTC. The intermediate disability scenario projects that in 2040 there will be only about 9 adults ages 25 to 64 to support each disabled older adult, down from about 15 younger adults in 2000.

Even under the low disability scenario, the number of disabled elderly would grow by more than 50% between 2000 and 2040, and the number of disabled older adults for every adult aged 25 to 64 would still swell, the report states.

The ratio of disabled older adults receiving paid daily assistance would increase from about 22% to 26% between 2000 and 2040, while the share receiving unpaid help from children would fall from about 28% to 24%, according to the report. These projections reflect declines in average family size and sustained increases in women’s earnings.

Fast population growth would create a significant impact. If future disability rates follow the intermediate growth scenario, the number of aging Americans receiving paid home care would more than double between 2000 and 2040, from 2.2 million to 5.3 million. The number of older nursing home residents would also more than double over the period, from 1.2 million to 2.7 million.

The institute’s models show that even under the most optimistic scenario, LTC burdens on families and society in general would increase substantially in coming decades. If disability rates decrease steadily and substantially over time, the number of older adults using paid home care will increase by three-fourths between 2000 and 2040 and the number in nursing homes will increase by two-thirds.

Between 2000 and 2040, the average number of paid hours of help per frail elder will increase by about 36%, from 163 hours per month to 221 hours.

The projected increase in the intensity of paid home care, combined with the increase in the size of the frail older population, would significantly increase the total number of paid home care hours received by older Americans. Under the intermediate disability growth scenario, total paid home care hours would more than triple between 2000 and 2040. Under the high disability model, total hours would almost quadruple.

Future policy choices by national decision makers could have a big impact on how LTC arrangements actually evolve, the report notes. For instance, efforts to encourage purchase of private LTC insurance might add funding for future services and increase the use of paid care, while Medicaid and Medicare expansions could also make services more affordable.

At the same time, problems with recruiting and holding on to LTC workers could limit the availability of paid services and sharply raise costs, the report warns.


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