EBRI: Real LTC spending

A researcher at the Employee Benefit Research Institute (EBRI) may have provided ammunition for long-term care (LTC) planners who say a limited amount of private long-term care insurance (LTCI) can be better than none.

Sudipto Banerjee, an EBRI researcher, looked at older U.S. residents’ out-of-pocket spending on many types of health care, including home health care and nursing home care, in an analysis of government retiree health spending survey data. The government survey covered what participants spent over a two-year period, from 2010 through 2012.

Banerjee compared the data for participants in three age groups: ages 65 to 74; ages 75 to 84; and ages 85 and older.

When Banerjee analyzed the data, he found that the survey participants in all three groups were about equally likely to have gone to the doctor, used prescription drugs, seen a dentist or had outpatient surgery during the two-year period studied.

The people in the oldest group were much more likely to have used LTC services. About 15 percent of the people in the 85-and-over group were living in a nursing home at the time the survey was conducted, compared with 0.9 percent of the people in the 65-74 group. About 26 percent of the people in the oldest group were getting home health care, compared with 8.3 percent of the people in the youngest group.

But, even in the oldest group, only a minority of the participants had used LTC services. Just 23 percent had had an overnight stay in a nursing home.

Traditionally, many LTC planners have argued that consumers who want to avoid depending on Medicaid nursing home benefits should have hundreds of thousands of dollars in LTCI protection, and that LTCI policies with smaller benefits are a weak fallback option.

But Banerjee found that many of the participants who had used nursing home care had spent relatively modest amounts on the care.