The cost of long-term care has caused some Medicare beneficiaries to spend their savings to be eligible for Medicaid services.
A majority of individuals over 65-years-old will develop physical and/or cognitive impairment that would affect their ability to live independently, and would require utilization of long-term services.
Elderly adults may have problems with completing day-to-day activities that include eating, bathing, or dressing. These individuals must seek assistance from loved ones or a paid caregiver.
However, obtaining outside services may be very expensive, and can cost more than these individuals can afford. While Medicare covers home health and skilled nursing facilities after hospitalization, it will not cover personal care assistance of long-term nursing facility services.
Medicaid provides long-term nursing home stays, as well as some home- and community-based services for low income individuals. Medicare beneficiaries who cannot afford to pay out-of-pocket may spend their money, and sell their belongings to be able to qualify for Medicaid services.
This phenomenon has resulted in a large cost burden on Medicaid, which has caused many states to determine how to provide better services in dually eligible patients. A recent report from the Commonwealth Fund explores this growing problem. Included in the report was data from the Health and Retirement study from 1998 to 2012 to determine the needs of patients with physical and/or cognitive impairment, and their potential entry into Medicaid.
They also included data from the 2012 Medicare Current Beneficiary Survey to determine out-of-pocket costs. Approximately 33% of Medicare beneficiaries had physical and/or cognitive impairment in 2012, with 13% living in nursing homes.
These individuals are more likely to be older, African American, or Hispanic, compared with beneficiaries who have no impairments. Almost two-thirds of community-dwelling beneficiaries with physical and/or cognitive impairment had at least 3 chronic conditions, and 96% had at least 1, according to the report.
These individuals were almost more likely to have a high rate of resource utilization. The need for extensive services among these patients suggests a need for better alignment between health and long-term services.
Several risk factors can increase the likelihood of a Medicare beneficiary requiring care from a nursing home. Investigators found that living alone increased the risk for long-term nursing home placement by 48%.
They also found that chronic conditions, including diabetes, stroke, and psychiatric conditions, also increased the risk of nursing home placement. The report indicated that almost 1 in 5 older beneficiaries had mild cognitive impairment, and 22% had staying in a long-term nursing home over the 14-year study period.
The probability of nursing home placement for beneficiaries with physical and/or cognitive impairment was doubled compared with beneficiaries with no impairment. During this time, the likelihood of a long-term care was 36% in patients with dementia, 33% in patients who need assistance with 2 or more daily activities, and 28% in patients with mild cognitive impairments. Patients with no impairments only had a 16% risk, according to the investigators.
Unfortunately, nearly half of beneficiaries with physical and/or cognitive impairments had an income below 200% of the federal poverty level, and many were not eligible for Medicaid coverage. This means that the high costs of these needed services prevent many older individuals from receiving needed care, or spending their savings to qualify.
Approximately 19% of Medicare beneficiaries with impairment and high out-of-pocket costs entered Medicare over 14 years compared with 10% of beneficiaries without impairment and low costs, according to the report.
By improving financing for home- and community-based care would benefit many individuals who have physical and/or cognitive impairment live at home. The way our current healthcare system operates encourages these individuals to go without needed services, or spend their savings to qualify for Medicaid.
Providing personal care services at home may prevent Medicare beneficiaries with impairments from entering Medicaid, or to receive expensive services not covered by Medicare, the report concluded.