LTC Stats

Statistics by themselves aren’t always very interesting, but we know a lot of people do like to look at them, so here are some for you.

LTC STATISTICS

• One of the biggest worries people have about getting older is seeing their accumulated financial resources eroded due to health care costs.  More than half of all respondents (ages 25-75) are worried about spending all their money on long-term care.

 (“Money, Health, and Aging Consumers: Ongoing Challenges and new Opportunities for Retirement Planning”, Journal Of Financial Service Professionals, March 2001)

• Upon reaching 65, men can expect to live an additional 16 years and women, 19.2 years.

• Americans are putting off decisions about planning for and financing their long-term care needs.  23% “will worry about it when the time comes”.  43% would have to tap personal resources and savings to pay for long-term care.  31% said long-term care insurance will pay the necessary expenses, yet industry statistics indicate that fewer than 10% have purchased long-term care insurance.

• When asked where they would want to live should they need some assistance in daily living, most people say they want to stay in their own home.

 (“Planning for the Rest of Your Life: A New Perspective”, Journal Of Financial Service Professionals, March 2001)

• As of June, 2000, the Medicare Part A trust fund was projected to extend to 2023 while the Social Security trust fund was projected to extend to 2037. 

• The new law (Senior Citizens’ Freedom to Work Act of 2000) may also encourage the purchase of more long-term care (LTC) insurance … the high and rapidly rising cost of LTC makes it one of the most ominous financial threats facing senior citizens in the U.S. today.

• About l.5 million Americans are in a nursing home, the average annual cost of which is $54,000.

• Over 40 percent of the seniors who turn 65 each year will spend some time in a nursing home.

• Over seven million LTC insurance policies have been sold.

• The average income of empty-nest households in 1997, in which at least one member was age 55-64, was $55,000, and the number of these households is expected to grow from 24 million in 1995 to 37 million in 2010.

(“Some Observations About the Senior Citizens’ Freedom To Work Act of 2000”, Journal Of Financial Service Professionals, January 2001)

• One out of every four families provides care to an elderly relative or loved one.

• The average age of these caregivers is 46, and nearly two-thirds are working.

• Nursing home costs now average over $50,000 a year.

(“Geriatric Care Management: Building Bridges in the Aging Network”, Journal Of Financial Service Professionals, November 2000)

• About 1.5 million Americans receive nursing home care each year.  About 8 million receive home health care each year.

• The expenditures on nursing home care have increased 370 percent (from $17.6 billion to $82.8 billion) since 1980, while the expenditures on home health care have increased 1200 percent ($2.4 billion to $32.2 billion). These figures compare to a 340 percent increase in total national health expenditures over the same period.

• The incidence of home health care is about 10 times greater than nursing home care for those under 65.

• The cost of home care services can vary from $12.50 per hour for personal care to over $120 an hour for licensed skill care (1997 rates).  At skilled care rates, home care costs can greatly exceed the cost of institutional care.

• In the 70–79 age group, the chances of needing nursing home care are four times greater for singles than for married persons.  And the average nursing home stay for the single person is about 40 percent longer.

• Over 30 percent of individuals over age 85 received home health care in 1986.  Nearly one in six over age 85 was in a nursing home in 1995.

• With the increasing number of elderly, particularly the very old, long-term care needs and expenditures will continue to grow faster than all health care needs and expenditures.

("Long-term Care Trends and Demographics: Implications for Financial Planning", Journal Of Financial Service Professionals, September 2000)

• In the year 2000, there were 78,414,000 baby boomers – about 29 percent of the total population.

• Persons reaching age 65 have an average life expectancy of about 18 years (to age 83).

• When parents (often in their 70s or 80s) of baby boomers become unable to care for themselves, the boomer usually becomes the caregiver (this is often sudden and unexpected).  The financial impact can be devastating.  And the emotional toll of caring for Mom or Dad is often overlooked, as is the impact on careers and lifetime wages.

(“50 in 2000: Leading Edge Boomers Reflect on Life and Retirement”, Journal Of Financial Service Professionals, July 2000)

• The discounted present value of future health care costs at retirement is estimated at $150,000 - $182,000, with Medicare paying about 50 to 55 percent under current law.

• Only 7 percent of long-term care is paid for by private insurance.

(“Focusing on Retirement Needs: The Period After Retirement”, Journal Of Financial Service Professionals, July 2000)

Results of a study of 55 specifically selected caregivers by the National Alliance for Caregiving and the National Center for Women and Aging at Brandeis University:

• The caregiving responsibility lasted much longer than expected.  The average length was eight years – the range of care was from three to fifteen years.

• Caregiving took a great toll at work.  Many adjustments needed to be made, and some had to quit or retire early.  Many passed up promotions, new assignments, and opportunities for transfer and relocation.

• Caregivers lost an average of $566,000 in wages, $25,000 in Social Security, and $67,000 in pension contributions.

• Caregivers spent an average of $19,500 out-of-pocket to provide care for their care recipients.

• Three-quarters of the caregivers said caregiving had an impact on their health.

(“Boomer Wake-UP Call: Balancing Work and Caregiving and the Cost Involved”, Journal Of Financial Service Professionals, March 2000)

• The average nursing home stay is two-and-one half years.

Percent Change in In-Force LTC Premiums Collected  1995-1999*

(Source – LIMRA International)

1995 – 6.2%
1996 – 9.6%
1997 – 15.5%
1998 – 12.5%
1999 – 28.2%

*Based on 29 Insurers with two years of comparable data.

(“A Long-Term Commitment”, Best’s Review, October 2000)

According to a survey by the Health Insurance Association of America (HIAA):

• The number of LTC insurance policies sold in the United States has doubled in the past 5 1/2 years – nearly 6 million policies sold by mid-1998, up from 3 million in 1992.

• The growth in LTC insurance sales has averaged 21% annually from 1987 to 1997.

• Households that buy LTC insurance had an average income of $35,000 a year.

• As of June 1998, the employer-sponsored market had seen a 40% average annual growth rate – to about 800,000 policies cumulatively – and more than 2,000 employers offered LTC coverage to workers and/or retirees.

(“Survey:  LTC Policy Sales Have Doubled in Five Years”, Best’s Review, June 2000)

• More than 25 million adult Americans are providing unpaid care for an adult friend or relative.

• In a survey of high-level caregivers, only one-fourth received help from family members. (source: National Family Caregivers Association.)

• Caregivers who face the most intense demands reported a depression rate six times the national average. (source: National Family Caregivers Association)

• The average caregiver is a 46-year-old married woman who works full time.  (source: National Alliance for Caregiving/AARP).

• 47% of working caregivers devote more than 40 hours a week to caregiving. (source: National Family Caregivers Association.)

(“Taking Care”, Mature Outlook, December 2000.)

• Age 50 is the beginning of the single longest life stage.  A person reaching age 65, on the average, can expect to live an additional 17.4 years.  The 80+ age group is growing at the fastest pace.

• Of those age 64–75, 62 percent are married, and 22 percent are widowed.  In the age 75-84 group, 46 percent are married and 42 percent are widowed.  In the 85+ age group,  only 21 percent are married and 65 percent are widowed.

• The vast majority of older people want to remain independent and do not want to move in with their children. 

“Understanding Our Older Customers: Approaches to Segmenting the Mature Market”, Journal Of Financial Service Professionals, November 1999.)

• The aggregate costs of caregiving in lost productivity to U.S. business is $11.4 billion per year.  When caregiver costs are factored in (for health care, mental health services, leaves of absence, turning down promotions, etc.) the total cost to U.S. business would exceed $29 billion per year.

• Nursing homes now average $140 per day depending upon the geographic location, and home care can cost even more if service are intense.

• Barring a big breakthrough in research, gerontologists predict that one in five older adults will develop Alzheimer’s disease or related dementias. 

• People with Alzheimer’s disease make up the majority of nursing home residents.

• Families provide 95 percent of informal long-term care.

• In 2000, 9 million people needed long-term care services – that will rise to 24 million by 2060.

• All signs point to the fact that the government will not incorporate more long-term care benefits into Medicare entitlements.  The message that comes through is that families, not Washington, need to take responsibility for their own long-term care planning.

• Many people under age 65 still believe that Medicare or their medical plan will provide protection against the costs of long-term care. 

(“From Childcare to Eldercare: Our Turn to Care for Mom and Dad”, Journal Of Financial Service Professionals, September 1999.)

• People age 85+ are almost six times as likely to need long-term care than are people in their 60s.

• As people live longer, about half of older women and a third of older men can expect to spend some time in a nursing home.

• If current trends continue, the annual cost of being in a nursing home will increase to $190,000 by 2030.

• Most people who require long-term care service would prefer to receive care at home.

• Only 4 percent of the population is currently covered by long-term care insurance.

• Today, the cost per visit of a home health aide is $77.  By 2030, it will cost $366 a visit.  Many people average three visits a week, thus the annual cost of an aide will rise from about $12,000 per year now to about $57,000 in 2030.

• Currently, the cost of assisted living averages about $26,000 per year, depending upon service required.  In 2030, it will cost about $123,800 per year.

National Long-Term Care Expenditures for the Elderly – Year 2000

(CBO Memorandum, March 1999)

• Today’s 55-year-old would have to save $4,400 a year for the next 30 years (and earn 7 percent interest before taxes) in order to pay for two years ($300,000) in a nursing home beginning at age 85.  A two-year individual LTC policy with inflation protection would cost about $700 a year.

• About one-third of Americans believe they can rely on the government for their long-term care costs.  50 percent of boomers believe their health care plan will cover their long-term care needs.  Health insurance does not cover long-term care expenses.

• Two-thirds of respondents to a recent survey found it difficult to admit they would ever need some long-term care during their lives.

• 1 in 10 Americans older than 65 and almost half age 85 and older who live in the community require assistance with their everyday activities.

• 26 percent of families who help elderly relatives use (family) money allocated for retirement and 12 percent dip into college funds to pay for this care.

• Overall, 46 percent of boomers could afford to purchase long-term care insurance.

(“Retirement Planning for Baby Boomers: The Role of Long-Term Care Insurance”, Journal Of Financial Service Professionals, September 1999.)

• Purchasers of LTC insurance tend to be middle-class and under the age of 60, not affluent and over 65. 

• People buy LTC insurance primarily to slow down the rate at which they deplete their modest assets and thereby to preserve their freedom to choose who will provide their long-term care.

• From 1985 to 1995, nursing home growth was a modest 3 percent while the older population increased by 18 percent.

• Most of the growth in long-term care since 1985 has been in assisted living and home care.

• In 1997, the typical daily charge for assisted living was about $65 ($24,000 annually).

• Family members provide about 80 percent of long-term care to people at home.

• Home care for a person who has no family caregiver can cost about the same as the cost of nursing home care.

• Adult day care services cost about $50 a day.

(“Challenges for Long-Term Care Insurance in a Rapidly Changing World”, Journal Of Financial Service Professionals, January 1999.)

• Only 7% of seniors and virtually none of the baby boom generation have purchased private LTC insurance. 

(“Study:  Make Estates Repay Medicare”, Best’s Review, November 1999)

• A recent study by the U.S. Department of Health indicates that people who have reached age 65 face at least a 40% risk of entering a nursing home.

U.S. Population by Age Segments (000)

(U.S. Bureau of Census, 12/98) 

(“An Immature Product For a Maturing Clientele”, Best’s Review, October 1999)

According to a study by the American Health Care Association of 800 Americans age 34 to 52:

• 68% are unprepared for the expense of long-term care.

• Only about 2% are covered by LTC insurance (27% said they were).

• Many believe they have the coverage or will be covered by Medicare.

• 56% did not know that Medicare does not cover extended stays in a nursing home.

• Most who said they would buy LTC insurance would only pay up to $50 a month for it.

• Baby boomers are in denial – they don’t believe they will ever need long-term care.

(“Study: Long-Term Care Crisis Ahead”, Best’s Review, May 1999)

According to a study by the American Council of Life Insurance (ACLI) – by 2030:

• The number of elderly will double to nearly 70 million.

• The number of nursing homes will double, and the cost of care will quadruple and could reach $330 billion per year.

• The frail elderly may not be able to rely on family or friends for help as they do today.

• One in four baby boomers has no children.

(“Long-Term Care Crisis Forecast”, Best’s Review, April 1999)

• It is unlikely the federal government will have the resources to pay for the care of the estimated 3.2 million elderly who will reside in nursing homes in 2010.

• Retirement will represent for many people the longest stage of their lives.

• Today, the life expectancy for a newborn male is 73 years, for a female, 79 years.

• The average period of retirement is now 17 years.

• By 2010, there will be 40 million Americans over age 65; by 2020, 56 million; and by 2030, 75 million.

• Between 1990 and 2020, the segment of our population age 50 and over will grow by 82%.

(“Retirement in the New Century”, Best’s Review, April 1999)

• “The biggest obstacle to the purchase of long-term care insurance is the untrue belief that the federal government will pay for it.” (Peter Goldstein – Long-Term Care Group, Inc.)

• The typical purchaser of an individual or association group LTC insurance policy is age 67, while the average purchaser of an employer-sponsored LTC insurance policy is age 43.  (HIAA - Health Insurance Association of America)

• Fewer than 1 million LTC policies had been sold in 1987.  By 1996, almost 5 million policies had been sold. (HIAA Survey, 1997)

(“The Power of Suggestion”, Best’s Review, April 1999)

• There is a one in 80 chance of ever using your homeowner’s insurance, and a one in 40 chance of using your automobile insurance, but about a 60 percent chance that you’re going to be in a nursing home after age 65.

National Underwriter, May 10, 1999.

• Nursing home care already averages $50,000 per year ($236 per day), up from $31,390 ($86 per day) in 1990. By 2030, 20% of people over 85 will reside in nursing homes. All the boomers will be over 65, and 4% - 5% of them will already reside in nursing homes.

("LTC Insurance Could Play Role In Solving Medicaid Woes", National Underwriter, January 11, 1999.)

• According to a recent Wall Street Journal article, the number of frail parents per adult child will nearly double by 2030, with families providing 80 percent of the needed care.

(“Adult day care plays key role in filling seniors’ needs”, Business First, The Weekly Business Newspaper of Greater Louisville, December 21, 1998.)

• Nearly 50 percent of all Americans will need long-term health care at some point.

("Baby Boomers Need To Plan For Their Future", PR Newswire, December 8, 1998 - source: American Health Care Association (AHCA).

• 40% of Americans receiving long-term care are under age 65.

("LTC’s Huge Untapped Potential", National Underwriter, December 7, 1998.)

• Currently, 1.4 million Americans reside in nursing homes, with an additional 5 million needing some form of assistance in daily living.  The age 85 and older population will double as a proportion of the U.S. population by the year 2030, and double again by 2050. 

(“Retirement: Preparing for An Uncertain Future”, Journal of the American Society of CLU & ChFC, November, 1998.)

• By 2030, more than 70 million Americans will be over age 65. 

(“Viatical Settlements and High Net Worth Transactions: New Uses for Affluent Policyholders”, Journal of the American Society of CLU & ChFC, November, 1998.)

• 1996 National Center for Health Statistics (NCHS) statistics showed that slightly more people age 65 and over received home health care than nursing home care in 1995.

(“Do you need long-term care insurance?”, New Choices, November, 1998.)

• For those who reached age 65 in 1990, men can expect to live to age 80; women to 85 ½.

(Source: Center for Strategic and International Studies, 1998.)

• By 2020, The U.S. average life expectancy will increase another 10 years, to age 86.

(“Free Market Partnership Now Can Prevent LTC Crisis in 2020”,  National Underwriter, October 19, 1998.)

• The elderly and their families currently shoulder 39 percent of the cost of LTC out of their pockets,  and 60 percent of the cost is funded through public programs, primarily Medicare and Medicaid.  LTC insurance benefits pay the remaining 1 percent of LTC expenses. 

(“Congress Eyes LTC’s Taxing Questions”,  National Underwriter, October 12, 1998.)

• Studies have shown that 67%  of children become clinically depressed while taking care of their parents. 

(Source:  National Family Caregivers Association (NFCA), August, 1998.)

• In 1997, the U.S. spent $82.8 billion on nursing home care:  Medicaid paid 47.6%; Medicare paid 12.3%;  31.1% was paid out-of pocket.

• 24-hour-a-day nursing care costs $20 to $30 an hour or more, at least $480 to $720 a day.

("Home Care Benefits Are Seriously Flawed", National Underwriter, March 16, 1998.)

• During 1996, more than 1.8 million Americans were in nursing homes; the cost, $87 billion, of which Medicaid paid about $44.9 billion.

• By 2005, Medicaid expense for nursing homes is projected to climb to $79.1 billion.

(“The High Cost of Living Longer”. The Philadelphia Inquirer, March 15, 1998)

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