A look at long-term healthcare needs

Part 1 of 2 parts

It's harder and harder to avoid the topic of long-term care these days. Almost everyone has a parent or relative who is receiving, or has received, long-term care. Almost everyone has a story to recite about the unexpected high cost of long-term care.

And, although people are reluctant to broach this topic, many are concerned about their own long-term care. Will I need it? What exactly is long-term care? How much will it cost?

We're getting older

There's good reason to be asking these questions.

First, we're getting older. Individuals aged 65 and older currently make up about 12.4 percent of the population, but based on projections this figure is expected to increase to about 30 percent by 2025. Furthermore, while only 1.5 percent the total population is over age 85 today, this percentage is expected to more than double by 2025.

The increase in the percentage of seniors is due, in part, to the aging of the baby boom generation. It is also attributable to increases in life expectancy. In 1950 life expectancy was only 68.2 years. By 1975 it had increased to 72.6 years and by 1997 life expectancy for all individuals had risen to 76.5.

We're receiving long-term care

While improvements in healthcare have made sudden death from acute diseases less likely, the chances of incurring a debilitating disease that may require long-term care has increased. In fact, 60 percent all deaths in the 1990s were attributable to heart disease, cancer and stroke.

Changing cause of death trends are reflected in changes in nursing home usage. In 1995 there was an estimated 1.5 million individuals in nursing home care. At current rates there will be approximately 3 million nursing home residents in the year 2030. Even with the use of alternatives such as home health care, assisted living, more and more of us will require at least some nursing home care before we die.

No doubt, as the baby boom generation continues to age and as aging boomers live longer, the system may strain to deliver the needed services. As demand outstrips supply, costs can only be expected to rise.

What is long-term care?

Although the term long-term care encompasses a broad spectrum of services provided to individuals suffering from chronic illness or other disabling conditions over a prolonged period of time, it usually includes assistance with

* basic functions, such as bathing, getting dressed, getting out of bed, going to the toilet, continence and eating;

* household chores, such as cleaning and preparing meals;

* life management, such as shopping, money management, and taking medications; and

* transportation.

The need for assistance in one of these areas is often diagnosed through the use of a tool referred to Activities of Daily Living (ADL). Researchers agree that the inability to perform some or all six core ADLs best describes either physical or cognitive impairment.

How will it cost?

Part of the concern we share about long-term care centers around how much it will cost. The cost depends on the level of care received. Nursing home facilities, licensed by the state and certified by the federal government for Medicare and Medicaid payments, provide the broadest range of services.

Residential community care facilities, also known as assisted living facilities, adult family/foster homes, congregate homes, continuing care retirement communities, and board and care homes are a growing segment of the long-term care delivery system.

Although typically licensed by the state, regulation of such facilities is less stringent than for nursing homes because fewer medical services are provided.

Home and community based services are designed to provide the minimal level of care to enable individuals to remain in their own homes. Examples include senior centers, adult day care, and "meals on wheels," transportation, therapy services and homemaker/chore services.

Nursing home care is by far the most expensive with annual costs easily running between $30,000 and $60,000. The costs of types of care vary significantly depending on the level and duration of care.

Paying for long-term care

As more and more of us are learning, programs such as Social Security, Medicare and Medicaid were intended to meet basic retirement and health care needs, not daily long-term care needs resulting from incapacitating illness.

This means that the cost of long-term care is borne largely by the private sector.

Some alternatives include:

* reliance on family members;

* liquidation of private assets;

* use of discretionary trusts in conjunction with government programs; and

* the purchase of long-term care insurance.

Most of us will probably rely on a combination of these approaches. Your financial services professional can help you decide on the right course for you.

Sharon Stanley is a representative of The Prudential Insurance Co. of America in Cape Girardeau. (344-2603)