By H. Stephen Kaye, Charlene Harrington, and Mitchell P.

LaPlante
Long-Term Care: Who Gets It, Who
Provides It, Who Pays, And How
Much?
ABSTRACT Long-term care in the United States is needed by 10.9 million
community residents, half of them nonelderly, and 1.8 million nursing
home residents, predominantly elderly. Ninety-two percent of community
residents receive unpaid help, while 13 percent receive paid help. Paid
community-based long-term care services are primarily funded by
Medicaid or Medicare, while nursing home stays are primarily paid for by
Medicaid plus out-of-pocket copayments. Per person expenditures are five
times as high, and national expenditures three times as high, for nursing
home residents compared to community residents. This suggests that a
redistribution of spending across care settings might produce substantial
savings or permit service expansions.
L
ong-termcare services, whether pro-
vided in institutions or the commu-
nity, areessential tothewell-beingof
many elderly and nonelderly people
with limitations in performing daily
activities. Long-term care provided outside of
institutions, known as personal assistance
services, personal care services, or home and
community-based services, also enables many
people with disabilities to maintain their inde-
pendence; avoid institutionalization; and parti-
cipate in family, community, and economic ac-
tivities. Noninstitutional long-term care can be
purchased or obtained fromfamily, friends, and
other volunteer helpers.
With projections indicating a doubling in the
needfor long-termcare over the next forty years,
1
spending on publicly paid servicesalready an
ever-increasing share of ever-rising national
health care expendituresis of grave concern
to policymakers at the federal and state levels.
Efforts to both improve the long-term care sys-
temand reduce spending are limited by a lack of
information on how much is spent, for what
services and in what settings, and the extent
and nature of unpaid help that people receive.
This paper is an attempt to partly fill that gap. Its
findings, for example, indicate that most long-
term care spending goes to the relatively small
minority of long-term care recipients living in
nursing homes, that the vast majority of commu-
nity residents needing long-term care get only
unpaid help, and that although about half of all
long-term care recipients are under age sixty-
five, four-fifths of long-term care spending is
for elderly recipients.
Data Sources And Methods
This paper explores the size and characteristics
of the U.S. population needing help with daily
activities, the nature of unpaid and paid provi-
ders of long-term care, sources of payment, and
spending for those services, both individually
and on a national level. We conducted analyses
of public-use data sets fromfive nationally repre-
sentative federal surveys that use state-of-the-art
data collection methods: (1) The Survey of In-
come and Program Participation, a periodic
longitudinal survey of 96,000householdrespon-
dents conducted in person by the Census Bureau
in 2005.
2
(2) The 2007 National Health Inter-
view Survey, an annual in-person survey of
95,000 household respondents sponsored by
doi: 10.1377/hlthaff.2009.0535
HEALTH AFFAIRS 29,
NO. 1 (2010): 1121
2010 Project HOPE
The People-to-People Health
Foundation, Inc.
H. Stephen Kaye
(steve.kaye@ucsf.edu) is an
associate adjunct professor in
the Institute for Health and
Aging at the University of
California, San Francisco, and
coprincipal investigator of
the Center on Personal
Assistance Services.
Charlene Harrington is a
professor of sociology at the
University of California, San
Francisco, and principal
investigator of the Center on
Personal Assistance Services.
Mitchell P. LaPlante is an
adjunct professor in the
Department of Social and
Behavioral Sciences at the
University of California, San
Francisco, and coprincipal
investigator of the Center on
Personal Assistance Services.
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the National Center for Health Statistics.
3
(3) The 2007 American Community Survey,
the Census Bureaus annual mail-in survey of
three millionrespondents livinginall residential
settings.
4
(4) The 2004 National Nursing Home
Survey, a representative survey of 13,500 resi-
dents living in 1,500 nursing homes, conducted
in person by the National Center for Health Sta-
tistics.
5
(5) The Medical Expenditure Panel Sur-
vey, from the Agency for Healthcare Research
and Quality, providing monthly spending data
on 34,000 household respondents. We analyzed
5,703home healthspending records from2005
06.
6
All five surveys contain questions regarding
the performance of such self-care activities as
bathing and dressing, generally known as activ-
ities of daily living (ADLs), and other routine
activities, such as shopping and doing house-
work, known as instrumental activities of daily
living (IADLs). Four of the surveys ask about
the need for help from other people, a standard
measure of long-termcare need. The exceptionis
the American Community Survey, which asks
about difficulty performing the activities. For
consistency across surveys, ADLs comprise bath-
ing, dressing, transferring from bed or chair,
eating, using the toilet, and getting around in-
side the home or nursing home room; we ex-
cluded activities for which only supervision is
provided.
Population numbers, proportions, and spend-
ing were calculated using sampling weights to
obtainnationally representative estimates. Com-
parisons mentioned in the text have been tested
for statistical significance, using tests appropri-
ate for complex sampling designs, and were
found to be significant at the 95 percent confi-
dence level or greater.
Findings
ESTIMATES OF LONG-TERM CARE POPULATION SIZE
Exhibit 1 shows estimates from four surveys of
the population needing long-term care services.
We identify two main population groups by
residential setting: (1) Community residents,
comprising households and noninstitutional
group quarters such as group homes, dormi-
tories, and homeless shelters. The National
Health Interview Survey and Survey of Income
and Program Participation are household sur-
veys, but the American Community Survey in-
cludes noninstitutional group quarters as well.
(2) Institutional residents, comprising nursing
homes, facilities for people with intellectual and
developmental disabilities, other residential
health care facilities, and also prisons and jails.
The National Nursing Home Survey targets nur-
sing homes only, but the American Community
Survey covers residents of all types of institu-
tions. Focusing first on community residents,
we present three tiers of population estimates
based on the level of identified need.
BROADLY DEFINED POPULATION: The
broadly definedlong-termcarepopulationneeds
help with one or more ADLs or IADLs. The ten or
elevenmillionpeople, or about 4 percent of com-
munity residents, in this category may get assis-
tance from family members, friends, or paid
helpers, and might also rely on meal delivery,
transportation, or homemaker services provided
by community organizations or government pro-
grams. This broad definition is particularly rele-
vant to policymakers concerned about the con-
tinued availability of family helpers in the face of
the aging of the population, the impact of such
help on families, and the ability of people with
disabilities to fully participate in society.
The Survey of Income and Program Participa-
tion yields the largest and probably most accu-
rate estimate, because it asks about help in each
activity separately, rather thanaskingabout mul-
tiple activities at once, as in the National Health
InterviewSurvey. The somewhat narrower Amer-
ican Community Survey measure, consisting of a
single question about difficulty with certain ADL
tasks, is included here because it captures a far
broader population than questions about need-
ing ADL help; furthermore, our analysis of a
similar measure in the Survey of Income and
ProgramParticipationindicates that the vast ma-
jority of people reporting ADL difficulty need
help with either ADLs or IADLs and that most
people needing help in multiple ADLs/IADLs
report ADL difficulty.
INTERMEDIATE POPULATION: The inter-
mediate long-term care population is composed
of people needing ADL help. Both the Survey of
Income and ProgramParticipation and National
Health Interview Survey yield estimates of
roughly 4.7 million, or just under 2 percent of
the population. The assistance that such people
receive is essential for their health, functioning,
personal dignity, and very survival.
7
For this rea-
son, need at the ADL level is often seen as an
indicator of potential usage of paid help, espe-
cially for people without live-infamily helpers. In
addition, it is often treated as a minimum elig-
ibility requirement for publicly funded commu-
nity-based long-term care services.
NARROWLY DEFINED POPULATION: The nar-
rowly defined long-term care population in-
cludes people needing help with two or more
ADLs (for example, bathing and dressing to-
gether, but not bathing alone). Its members
are often said to have an institutional level of
need. This group is of particular policy rele-
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vance because eligibility for many federal and
state programs, especially those entailing insti-
tutional services, as well as for long-term care
insurance benefits, hinges on requiring help
with multiple ADLs. The narrowly defined long-
termcare populationnumbers about 3.2million,
including 2.3 million requiring help with three
or more ADLs. Its members are at high risk for
institutionalization when needs go unmet.
ESTIMATES: Althougholder adults are much
more likely than younger people to need long-
term care, approximately half of the broadly de-
fined long-term care population living in the
community is nonelderly. Even among the nar-
rowly defined long-term care population, whose
disabilities are more significant, more than
45 percent are under age sixty-five.
With respect to the institutional long-term
care population, estimates of the number of nur-
sing home residents vary from 1.5 million to
1.8 million, the vast majority of whomneed help
with multiple ADLs. (The larger, more recent
estimate from the American Community Survey
is probably more accurate.) It should be noted
that these are point-in-time estimates rather
than annual totals, a common feature of admin-
istrative data. Unlike the community-dwelling
long-term care population, the nursing home
population is predominantly (more than four-
fifths) elderly.
In all, 10.0 million Americans, living either in
the community or in institutions, report ADL
difficulty. About half of this population is under
age sixty-five.
CHARACTERISTICS OF THE LONG-TERM CARE POPU-
LATION Demographic, economic, and functional
characteristics of the broadly defined long-term
care population, based on data from the 2007
EXHIBIT 1
Population Needing Long-TermServices In The United States, By Age, Residential Setting, Measure Used, And Data Source,
Selected Years
Age group (thousands of people, percent of population)
All ages
a
<18
a
1864 65+
Measure, data source No. % No. % No. % No. % % <65
Community residents
Broadly defined LTC population
Gets ADL/IADL help, SIPP 10,887 4.1 393 0.8 5,073 2.8 5,421 15.5 50.2
Gets ADL/IADL help, NHIS 9,613 3.5 281 0.5 4,409 2.4 4,923 13.6 48.8
ADL difficulty, ACS 8,382 3.0 460 0.9 4,154 2.2 3,769 10.4 55.0
Intermediate LTC population
Gets ADL help, SIPP 4,774 1.8 299 0.6 1,972 1.1 2,503 7.2 47.6
Gets ADL help, NHIS 4,673 1.7 281 0.5 1,899 1.0 2,493 6.9 46.7
Narrowly defined LTC population
Gets help with 2+ ADLs, SIPP 3,143 1.2 193 0.4 1,303 0.7 1,647 4.7 47.6
Gets help with 2+ ADLs, NHIS 3,169 1.2 219 0.4 1,205 0.6 1,746 4.8 44.9
Gets help with 3+ ADLs, SIPP 2,301 0.9 154 0.3 924 0.5 1,223 3.5 46.8
Gets help with 3+ ADLs, NHIS 2,305 0.8 179 0.3 862 0.5 1,265 3.5 45.2
Institutional residents
Broadly defined LTC population
ADL difficulty (any inst.), ACS 1,575 19 268 1,288 18.2
Nursing home residents, ACS 1,788 250 1,538 14.0
Nursing home residents, NNHS 1,492 3 172 1,317 11.7
Narrowly defined LTC population, nursing
homes only
Gets help w/ 2+ ADLs, NNHS 1,277 3 133 1,141 10.6
Gets help w/ 3+ ADLs, NNHS 1,184 3 121 1,060 10.5
All residential settings
Broadly defined LTC population
ADL difficulty, ACS 9,957 3.5 479 0.9 4,422 2.3 5,056 13.4 49.2
SOURCE Authors tabulations of 2005 data from the Survey of Income and Program Participation (SIPP) and from the 2007 National
Health Interview Survey (NHIS), the 2007 American Community Survey (ACS), and the 2004 National Nursing Home Survey (NNHS);
2007 ACS nursing home resident data from Table S2601B at http://factfinder.census.gov NOTES ADL is activities of daily living. IADL is
instrumental activities of daily living.
a
Beginning at age 5 for NHIS and ACS, age 6 for SIPP, and age 18 for ACS nursing home
population; IADL measure asked of ages 15+ in SIPP and 18+ in NHIS.
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American Community Survey, are shown in Ex-
hibit 2. Institutional and community residents
are shownseparately, withthe latter divided into
two categories: 8.0 million people living in
households, and 366,000 people living in non-
institutional group quarters, such as group
homes.
Institutional residents are both far older and
much more likely to be female than all of the
other groups. Compared to people without
long-term care needs, there is a higher propor-
tion of whites and African Americans, and a low-
er proportion of Latinos, Asians, and Pacific Is-
landers, among people with long-term care
needs in all settings. There is a lower proportion
of Native Americans among institutional long-
term care recipients, but a higher proportion in
the household long-term care population, than
among people without long-term care needs.
Adults with long-term care needs who live in
institutions are less than half as likely to be mar-
ried as those living inhouseholds, who are them-
selves much less likely to be married than adults
without long-term care needs. Very few adults
living in noninstitutional group quarters are
married, and most have never been married.
The high proportion of unmarried people in
the community-resident long-term care group
translates to a much greater likelihood of either
living alone or sharing a residence with non-
relatives. People in such circumstances are of
particular policy interest, because they oftenlack
a ready supply of unpaid helpers and therefore
have a greater need for paid services.
Regardless of residence, people with long-
term care needs tend to be less educated, and
EXHIBIT 2
Demographic, Economic, And Functional Characteristics Of The Broadly Defined Long-Term Care (LTC) Population, By Residential Status, 2007
LTC population
a
Institutional residents
Community residents
Households Group quarters People without LTC needs
Population (thousands) 1,575 8,016 366 270,968
Age and sex
Percent age 65 81.8% 45.2% 40.0% 12.1%
Median age (years) 82 62 57 38
Percent female 66.8% 59.5% 52.7% 50.5%
Race/ethnicity
White 82.2% 76.4% 79.5% 76.1%
African American 14.3 16.0 15.8 12.8
Asian/Pacific Islander 1.5 3.1 2.0 5.2
American Indian/Alaska Native 0.9 2.4 1.2 1.4
Latino/Hispanic 5.1 10.4 6.3 14.6
Marital status (age 18+)
Married 18.0% 40.7% 6.5% 53.8%
Widowed 51.7 25.0 21.4 5.7
Otherwise unmarried 30.3 34.3 72.1 40.5
Living arrangements
Household with family/relatives 0.0% 73.8% 0.0% 82.3%
Alone/other 100.0 26.2 100.0 17.7
Educational attainment (age 18+)
High school graduate 59.8% 66.5% 47.4% 85.2%
College graduate 9.5 11.5 7.9 25.6
Income
Family income <100% FPL 22.1% 62.4% 12.0%
Family income <200% FPL 49.3% 91.1% 29.0%
Median household income $32,400 $60,000
Median individual income (ages 18+) $9,200 $10,800 $8,000 $23,900
Functional status
Mobility impairment 92.8% 89.4% 75.0% 7.0%
Cognitive impairment 75.8 55.3 84.8 4.3
Sensory impairment 37.2 30.7 31.6 3.5
SOURCE Authors tabulations of public use data from the American Community Survey. NOTES Tabulations exclude children younger than age 5. Poverty status (percent of
federal poverty level, or FPL) is not determined for institutional residents.
a
People with difficulty bathing, dressing, or getting around inside the home.
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to have much lower personal incomes, than peo-
ple without long-termcare needs. Among people
living in households, median household income
for those with long-termcare needs is little more
than half that of people with no such needs. Just
under half of the household population with
long-term care needs lives in or near poverty
(<200 percent of the federal poverty level), as
do more than nine-tenths of those in noninstitu-
tional group quarters. Finally, although the vast
majority of long-term care recipients in all set-
tings experience mobility impairments, cogni-
tive impairments (broadly defined) affect only
55.3 percent of household residents, 75.8 per-
cent of those in institutions, and 84.8 percent of
those in noninstitutional group quarters.
SOURCES OF HELP FOR THE COMMUNITY-RESIDENT
LONG-TERM CARE POPULATION Family members
are far and away the principal providers of assis-
tance to the long-term care population living in
households. Data fromthe Survey of Income and
Program Participation, which asks long-term
care recipients about their main (primary) help-
er and a possible additional (secondary) helper,
are shown in Appendix Exhibit 1.
8
Despite the
ever-increasing attention and resources devoted
to paid, noninstitutional long-term care ser-
vices, only 13.0 percent of the broadly defined
long-term care population (or 22.5 percent of
the narrowly defined population) use paid help-
ers in either a primary or secondary role. Elderly
people with broadly defined long-term care
needs use paid help at more than twice the rate
of nonelderlypeople(18.0percent versus7.8per-
cent), and people living alone are nearly four
times as likely tohave paidhelpers as those living
with relatives (26.2 percent versus 7.1 percent).
Nearly half of the narrowly defined long-term
care population living alone gets paid help.
Use of a paid secondary helper (such as for re-
spite care) is rare across all groups.
The 13.0 percent of the broadly defined long-
term care population receiving paid help trans-
lates into approximately 1.4 million U.S. adults.
The survey probably underestimates the usage of
paid help, because only information for the two
main helpers is recorded, and the questions as-
sume that a paid helper is not a family member
who gets paid for his or her time. Receipt of help
from a paid relative is not measured in any on-
going federal survey.
Despite the greater reliance upon paid helpers
among elderly people withlong-termcare needs,
their usage of unpaid help is about the same as
that of working-ageadults, just above90percent.
Nearly all people with long-termcare needs who
live with family get unpaid help, compared to
81 percent of people living alone or with non-
relatives. Amongthe narrowly definedlong-term
care population, only 70.4percent of those living
alone get unpaid help.
Principal sources of help vary markedly with
age (Exhibit 3). Among the narrowly defined
long-term care population, help from parents
dominates for people under age thirty but then
falls sharply at higher ages. Between ages thirty
and seventy-four, the spouse is the dominant
source of help, followed by an offspringmore
likely a daughter thanason. For ages seventy-five
and older, when the spouse may have died or
become a less effective helper, daughters and
sons become the principal helpers.
Usage of paid helpers hovers at roughly 15 per-
cent belowage sixty, after which it begins to rise
once parents are nolonger available and, at high-
er ages, spouses decline inprevalence as helpers.
The pattern by age, coupled with the much high-
er usage of paid helpers among people living
alone, seems to imply that people generally get
help fromany available relative (or nonrelative),
and only in the absence of such helpers are paid
workers sought out.
Per Appendix Exhibit 1,
8
relatively few people
with long-term care needs receive no help at all.
Evenamongpeople livingalone, only 4.7percent
lack personal assistance entirely. However, this
measure captures only a small fraction of the
total unmet need for long-term care, which is
far more often experienced as a lack of sufficient
help than as a complete absence of help.
7
SOURCES OF PAYMENT FOR LONG-TERM CARE IN THE
COMMUNITY AND IN NURSING HOMES According to
our analysis of Medical Expenditure Panel Sur-
vey data, 1.6 million community residents of all
ages receive paidlong-termcare eachmonth(see
Exhibit 4 and Appendix Exhibit 2),
8
consistent
with the 1.4 million figure from the Survey of
Income and Program Participation for adults.
This total excludes 0.9 million people who re-
ceive home health services that do not involve
ADL or IADL help.
Medicare and Medicaid are the primary
payers: Each program pays for all or part of
the services received by about one-third of com-
munity residents. Nearly one-quarter of recipi-
ents pay out of pocket: 18.6 percent pay all or
most of the charges, and 5.4 percent pay less
than half. Private insurance rarely pays for such
services. Some 19.3 percent of recipients get
their help paid for, in whole or in part, by some
other source, generally a state or local program.
A majority of the community-resident long-
term care population receiving paid help are re-
ported as needing ADL help. This population is
more likely to receive federally funded services,
and much less likely to pay for the bulk of their
services themselves, than people needing only
IADL help.
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Once again we find that a much smaller num-
ber of nonelderly than elderly people receive
paid help. Services provided to people under
age sixty-five are far more likely to be paid for
by Medicaid, and far less likely to be paid for
either by Medicare or out of pocket, than are
services provided to their older counterparts.
People receiving noninstitutional long-term
care often get additional services, generally de-
livered by professionals such as nurses or phy-
sical or occupational therapists, which are in-
tended to treat a health condition or restore
functioning. This fact complicates analysis of
long-term care spending, because charges for
these professional services, which are often sub-
stantial, cannot generally be separated from
those for personal assistance.
A majority of community residents receiving
paid long-term care, however, get only personal
assistance. For the 829,000 people in this cate-
gory, Medicaid is a much more prominent payer
thanMedicare, andself-pay contributes substan-
tially. In contrast, the 794,000 people who re-
ceive personal assistance plus some type of med-
ical services at home aremorethantwice as likely
to have their services paid for by Medicare, and
only half as likely to be paying out of pocket.
Among people receiving personal assistance
without professional services, most obtain ser-
vices through agencies rather than from self-
employed, independent providers. The top
payers for agency-provided services are Medic-
aid and Medicare, and very little is paid for out of
pocket. However, the opposite is true of indepen-
dent providers, the vast majority of whom
(85.1 percent) are paid primarily by the recipient
or the family. Despite the existence of consumer-
directed, independent-provider options in some
states, Medicaid pays for only 10.1 percent of
independent providers. Of all consumers of
Medicaid-paid personal assistance with no med-
ical component, only 5.9 percent use indepen-
dent providers; Medicare pays for agency-
providedservices almost exclusively. Incontrast,
among those paying for services out of pocket,
most use independent providers, perhaps based
on lower rates or a preference for greater con-
sumer control.
During the initial period of service delivery,
the main payer is Medicare, which often covers
rehabilitation and restorative services following
hospitalization (postacute care). After six
EXHIBIT 3
Major Sources Of Help With Daily Activities Among Community Residents With Two Or More Activities Of Daily Living
(ADL) Needs, By Age
1529 3044 4559
Age of person receiving services (years)
6074 7584
0
10
20
30
40
50
60
70
80%
85+
Parent
Paid helper
Daughter/son
Spouse
SOURCE Authors tabulations of 2005 data from the Survey of Income and Program Participation.
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months, Medicaid becomes the most promi-
nent payer.
Medicaid and the consumer are the two major
payers for nursing home stays, with out-of-
pocket payments generally secondary to Medic-
aid. Nonetheless, one-fifth of nursing home bills
are paid out of pocket entirely or primarily, at a
considerable financial burden. Medicare is the
third most prominent payer, followed by private
insurance.
Although Medicare covers payments for only
17.7 percent of nursing home residents, it is a
major payer for the first three months of a nur-
sing home stay. The proportion of residents
whose charges are paid primarily out of pocket
increases from 10.7 percent during the first
thirty days to 28.3 percent during the fourth
through twelfth months and then declines to
15.9 percent after three years. Partly because
of eligibility rules requiring that a persons as-
sets be spent down, Medicaid pays for only about
one-fifthof residents during the first month, and
that proportion grows to reach just over four-
fifths for stays of greater than three years.
EXHIBIT 4
Payments And National Expenditures For Paid Long-Term Care (LTC) Services, By Setting, Level Of Need, Age Group, Type Of Services Received, And
Duration Of Receipt Of Services, Selected Years
Number of
recipients
(thousands)
Percent of
recipients making
an out-of-pocket
payment
Median monthly payment
Annual expenditure
(billions of
2009 dollars)
From all
sources
a
Out of
pocket
b
Community residents (200506)
Any LTC services at home
c
1,623 24.0% $795 $214 $33.7
Level of need
Needs ADL help 942 17.8 926 480 25.3
Needs only IADL help 682 32.5 545 120 8.5
Age group
Under 65 542 16.1 773 167 15.3
65+ 1,081 27.9 806 280 18.4
Type of services received
Personal assistance only 829 30.6 550 120 10.7
Needs ADL help 379 19.7 810 400 6.7
Needs only IADL help 450 39.7 400 100 4.0
Agency provider 650 15.3 703 90 9.5
Independent provider 180 86.0 152 120 1.2
Personal assistance plus professional
services
794 17.1 1,075 500 23.1
Needs ADL help 562 16.5 1,162 500 18.6
Needs only IADL help 232 18.4 954 530 4.5
Duration of receipt of services (prior to interview)
Initial 3 months 319 29.2 772 220 5.7
Months 46 194 29.5 611 300 3.0
Month 7 and beyond 1,116 22.7 768 264 24.2
Other home health services
d
872 13.6 571 72 11.8
Nursing home residents (2004)
All residents 1,492 71.5 4,230 923 113.7
Excluding 3 mos. after hospitalization 1,321 76.2 4,170 916 93.9
Age group
Under 65 175 49.2 3,990 677 13.5
65+ 1,317 74.5 4,260 960 100.2
Length of stay (at time of interview)
30 days 156 26.3 8,160 1,883 19.9
3190 days 144 54.9 4,980 1,271 13.5
91 days1 year 359 76.9 4,170 1,080 25.1
13 months3 years 451 79.3 4,080 926 29.7
>3 years 382 82.0 4,080 792 25.5
SOURCE Authors tabulations of public use data from the 2005 and 2006 Medical Expenditure Panel Survey (for community residents) and the 2004 National Nursing Home
Survey (for nursing home residents).
a
Detailed data on the contributions of various sources of payment (self/family as primary or secondary payer, Medicaid, Medicare,
private insurance, and other) may be found in the technical appendix, online as in Note 8.
b
Median includes only recipients making an out-of-pocket payment.
c
Personal
assistance and other home health services provided to people receiving paid personal assistance at home.
d
Home health services provided to people not receiving paid
personal assistance at home.
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PER RECIPIENT LONG-TERM CARE SPENDING The
monthly payment data in Exhibit 4 reveal that
typical per recipient spending on noninstitu-
tional and institutional long-term services is
on entirely different scales. The median monthly
payment for community residents is $795, while
the median for nursing homes is $4,230; infla-
tion-adjusting both figures to 2009 yields $928
and $5,243, respectively. An even starker com-
parison results if we consider only home-based
personal assistance services, excluding profes-
sional services, for which the median expendi-
ture is $550 per month ($635 in 2009 dollars). A
fairer comparisonwouldbe toconsider only peo-
ple with ADL needs, whose median community-
based spending is $1,069 in 2009 dollars, about
one-fifth of the nursing home expenditure.
One might reasonably object that even the last
comparison does not adequately take into ac-
count differences in the levels of need between
the community-resident and institutional popu-
lation. Because the Medical Expenditure Panel
Survey lacks information on specific ADL limita-
tions, we cannot directly compare spending on
people with the same level of need, but we can
use the Survey of Income and ProgramParticipa-
tiontocompare the extent of needamong people
with ADL needs who get paid, community-based
long-term care services with that of the institu-
tional long-term care population. Despite a
somewhat lower level of needamong community
than institutional residents (mean number of
ADL needs is 3.5 versus 3.9), however, a substan-
tial minority of community residents with ADL
needs report a very high level of need (36.5 per-
cent with five or six ADL needs, compared to
48.1 percent of the institutional population).
These data suggest that differences in level of
need could account for some, but by no means
all, of the differences in spending between insti-
tutional and noninstitutional services.
Indeed, the distribution of institutional and
noninstitutional long-term care expenditures
(Exhibit 5), with the latter limited to the inter-
mediate long-term care population, shows little
overlap between the two residential settings,
despite the substantial overlap in levels of need.
Nearly all nursinghome stays cost at least $3,500
per month, in 2009 dollars. But most noninsti-
tutional expenditures are under $1,500 per
month, in 2009 dollars, and 87.4 percent are
under $3,500 per month.
Out-of-pocket spending is also much greater
for institutional than for noninstitutional ser-
vices (Exhibit 4). Amongpeople withADLneeds,
the mediannursing home out-of-pocket expense
is nearly twice as high as that for noninsti-
tutional services ($554 versus $1,065, in 2009
dollars).
The first month of a nursing home stay typi-
cally costs twice as much as any month after the
first year. The beginning of a stay typically in-
volves additional services, often because the per-
son has just been discharged from a hospital.
Because such services fall under the Medicare
postacute budget category, they are not always
classified under the long-termcare umbrella; Ex-
hibit 4 shows expenditures for all residents ex-
cept those who were hospitalized prior to admis-
sion and are in their first ninety days of a stay.
ESTIMATED NATIONAL LONG-TERM CARE SPENDING
We estimate the total annual spending on paid
long-term care services, delivered either in a
recipients home or in a nursing home, as
$147.4 billion, adjusted for inflation to 2009 dol-
lars. The figure is an approximate estimate of
total nursing home spending plus spending
for community residents receiving assistance
with daily activities, and including other home
health services delivered to those individuals.
Our estimate of $113.7 billion in annual nursing
home spending would increase to $136.2 billion
if we were to use the American Community Sur-
veys higher estimate of the nursing home popu-
lation. Our estimate of $33.7 billion in noninsti-
tutional long-termcare spending excludes home
health services provided to people not receiv-
ing assistance with daily activities, estimated
at $11.8 billion.
Noninstitutional services account for only
22.9 percent of the $147.4 billion total. About
13 percent of that total is for services delivered
to people within three months of admission to
a nursing home following hospitalization; a
good part of that spending is probably for post-
acute services that some readers might not con-
sider long-term care.
Some 80.5 percent of total expenditures, or
$118.6 billion in 2009 dollars, goes to people
age sixty-five or older. Elderly recipients account
for a majority of bothcommunity-based and nur-
sing homebased expenditures (54.6 percent
and 88.1 percent, respectively).
Onthe noninstitutional side, three-quarters of
the total is for people with an ADL level of need.
More than half is for those with ADL needs who
are also getting medical care at home. Among
people getting only personal assistance at home,
the vast majority (88.7 percent) of funds go to
agencies. Only the remaining 11.3 percent go to
independent providers, whose typical monthly
charges are much less than those of agency pro-
viders. Only 0.8 percent of total national long-
term care spending goes to independent provi-
ders of personal assistance alone.
Estimating the enormous economic value of
unpaidlong-termcare is beyondthe scope of this
paper, but it has been addressed by others.
9,10
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Discussion
Our analyses of data from five national surveys
paint a portrait of long-term care in the United
States that is sometimes surprising. Some ten to
eleven million community-dwelling Americans
need help with daily activities. Adding the ap-
proximately 1.5 million people receiving long-
term care services in nursing homes yields an
overall long-term care population of about
12 million, or roughly 4 percent of the total
population.
The proportion of the population needing
long-termcare rises dramatically with age, a fact
that leads many to assume that most of the long-
term care population is elderly. Not so: About
half of community-dwelling Americans needing
long-term care are younger than age sixty-five.
Even when the much older nursing home popu-
lation is added in, only a slight majority of the
entire long-term care population is elderly. Re-
searchanddata collectionfocusing solely onold-
er adults withlong-termcareneeds misses half of
the story.
Amore important imbalance is inthe amounts
spent: Four-fifths of national long-term care
spending goes to the half of the long-term care
populationwhoare elderly. Most of that is public
spending, but there is a substantial out-of-pocket
component, and most of it is spent on institu-
tional services. Is this imbalance in spending the
result of different circumstances (for example,
greater availability of unpaid helpers for the
nonelderly or greater health care needs among
the elderly) or of public programs that serve only
or primarily older people, or offer only institu-
tional services, which younger people do not
want? Further researchis needed, but we suspect
that public programs foster age inequities in the
availability of paid services.
Aside from age itself, another key difference
between the institutional and noninstitutional
populations is the much higher rate of cogni-
EXHIBIT 5
Distribution Of Monthly Long-Term Care Spending, By Residential Setting, Inflation-Adjusted To 2009
Home/community services for people with ADL needs
Nursing home services
P
e
r
c
e
n
t

o
f

r
e
c
i
p
i
e
n
t
s
SOURCE Authors tabulations from the 2005 and 2006 Medical Expenditure Panel Survey and the 2004 National Nursing Home Survey.
JANUARY 2010 29: 1 HEALTH AFFAI RS 19
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tive impairment among those living in nursing
homes. Age differences also contribute to a
greater likelihood of nursing home residents
being widowed or otherwise unmarried, com-
pared to their community-dwelling counter-
parts. Indeed, a large majority of household res-
idents with long-term care needs live with a
spouse, family, or other relatives, who typically
serve as ready sources of unpaid help.
The critical importance of unpaid help is made
clear by data showing that about nine-tenths of
the community-dwelling long-term care popula-
tion relies on a family member, relative, friend,
or volunteer as the primary source of help with
daily activities. Only among the narrowly de-
fined long-term care population living alone
does the prevalence of a paid primary helper
(44 percent) exceed one-quarter of recipients,
and it is only 7 percent for those living with
family. The vast majority of the long-term care
population with access to unpaid help appear to
use it, and to use it almost exclusivelya finding
that should help allay policymakers fears that
greater access to publicly financed long-term
care would result in a high rate of substitution
of paid services for unpaid services. Further-
more, usage of secondary paid helpers is tiny
across all groups, which indicates that paid help
is rarely used to supplement unpaid help.
One crucial piece of missing informationis the
extent to which long-term care needs are met or
unmet. Unlike unmet need for health care, un-
met needfor long-termcare is not routinely mea-
sured in any federal survey of people of all ages.
Data from the mid-1990s indicate that unmet
long-term care needs affected about one-fifth
of the long-term care population
7,11
but without
recent, recurring, and geographically detailed
estimates, it is difficult to assess the extent to
whichlowrates of use of paid helpare a matter of
preference versus lack of access, and to what
degree increased availability of paid long-term
care could reduce unmet need. The long-term
care population living alone, without spouses
or other family members conveniently situated
to offer help, is particularly vulnerable. Because
income levels among the community-resident
long-termcare population are so low, it is doubt-
ful that many such people could afford to pay for
services entirely or mostly on their own.
A major payer for long-term care among com-
munity residents is Medicaid, whose programs
offering noninstitutional long-term care vary
widely from state to state and even from one
disability group to another. As a consequence,
there are undoubtedly access disparities result-
ing in greater unmet needs in some places than
others, and for some population groups than
others. There is an urgent need for population-
based data that could facilitate assessing the
scope of the problem, identifying policy solu-
tions, and estimating their potential costs.
The typical monthly nursing home bill is far
greater than that for noninstitutional services,
and national expenditures onnursing homes are
more thanthree times those for noninstitutional
long-term care services. Greater per recipient
nursing home costs can be only partly attributed
to a greater need for services.
Whether institutional service delivery can be
justified despite its expense, based on services
needed and desired by the recipient, depends
onindividual circumstances, including the avail-
ability of adequate personal assistance and ap-
propriate living arrangements in the commu-
nity. Further research is desperately needed to
better assess the appropriateness and cost-effec-
tiveness of different long-term care settings
based on the recipients functional and personal
characteristics. Another potential means of re-
ducing expenditures would be for government
programs to use independent providers of non-
institutional long-term care, an approach that
would also afford recipients greater control over
their services than through agency providers.
A redistribution in long-term care spending
from institutional to noninstitutional settings,
and from agency to independent providers, ap-
pears to offer the potential for a sizable reduc-
tion in spending or for an expansion of services
to a broader population for the same expendi-
ture. We hope that our findings, along with the
additional research we recommend, will help
public programs make the most effective use
of long-term care dollars.
This research was conducted at the
Center for Personal Assistance Services
with funding from the National Institute
on Disability and Rehabilitation
Research (Grant no. H133B080002).
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NOTES
1 U.S. Department of Health and Hu-
man Services. The future supply of
long-termcare workers in relation to
the aging baby boom generation:
report to Congress. Washington
(DC): DHHS; 2003.
2 U.S. Census Bureau. Survey of In-
come and Program Participation
2004 panel wave 5 topical module
microdata file. Washington (DC):
U.S. Census Bureau; 2009.
3 National Center for Health Statis-
tics. National Health Interview Sur-
vey 2007 microdata file. Hyattsville
(MD): NCHS; 2008.
4 U.S. Census Bureau. American
Community Survey 2007 public use
microdata file. Washington (DC):
U.S. Census Bureau; 2008.
5 National Center for Health Statis-
tics. National Nursing Home Survey
2004 microdata file, revised.
Hyattsville (MD): NCHS; 2009.
6 Agency for Healthcare Research and
Quality. Medical Expenditure Panel
Survey 2005 and 2006 home health
visits microdata files. Rockville
(MD): AHRQ; 2008.
7 LaPlante MP, Kaye HS, Kang T,
Harrington C. Unmet need for per-
sonal assistance services: estimating
the shortfall in hours of help and
adverse consequences. J Gerontol B
Psychol Sci Soc Sci. 2004;59(2):
S98108.
8 The appendix is available online at
http://content.healthaffairs.org/
cgi/content/full/29/1/
hlthaff.2009.0535/DC1
9 LaPlante MP, Harrington C, Kang T.
Estimating paid and unpaid hours of
personal assistance services in ac-
tivities of daily living provided to
adults living at home. Health Serv
Res. 2002;37(2):397415.
10 Arno PS, Levine C, Memmott MM.
The economic value of informal
caregiving. Health Aff (Millwood).
1999;18(2):1828.
11 Desai MM, Lentzner HR, Weeks JD.
Unmet need for personal assistance
with activities of daily living among
older adults. Gerontologist. 2001;41
(1):828.
JANUARY 2010 29: 1 HEALTH AFFAI RS 21
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