Nursing Home Care Continues to Outpace Most Categories of National Health Spending: Altarum

McKnight’s Senior Living | By Kathleen Steele Gaivin

Nursing home care in September once again represented one of the fastest-growing categories of national health spending, second only to spending on prescription drugs, according to Altarum’s monthly Health Sector Economics Brief, released Friday. 
 
Spending on nursing home care has increased 9.8% since September 2022, “a result of increases in both prices and utilization,” Altarum fellow and Senior Researcher George Miller told the McKnight’s Business Daily.
 
Spending on home care, on the other hand, showed the slowest growth rate among major categories of national health spending, increasing just 5.5% in September, he noted.
 
“This was in spite of the fact that home healthcare prices have been growing at a rate that is among the fastest among the major categories, increasing by 4.6%, year over year, in October,” Miller said. “The relatively low increase in spending was instead due to a slight decline in utilization of home healthcare services.”
 
Year-over-year spending growth among the other major healthcare categories, according to the report: prescription drugs (11.8%), dental care (9.8%), physician and clinical services (8.9%) and hospital care (6.9%).
 
National health spending overall increased 5.7%, year over year, reaching a seasonally adjusted annual rate of $4.78 trillion, accounting for 17.2% of gross domestic product.
 
“While the GDP growth rate continues to outpace the growth in total health spending, personal healthcare spending (spending on healthcare goods and services, which excludes categories such as the net cost of insurance and public health expenditures) has grown at a rate faster than GDP since February 2023 and grew by 7.4%, year over year, in September,” according to the brief.
 
“Nursing homes showed modest employment growth in October, adding 4,400 jobs. Our just-released blog characterizes nursing home staffing trends through the COVID-19 pandemic and compares recent staffing levels with the federal government’s newly proposed staffing requirements for nursing homes,” Miller said. “At the same time, home healthcare added 9,500 jobs in October, slightly above the monthly average over the past year.”

Why Long-Term Care Insurance Falls Short for So Many

New York Times | By Jordan Rau and JoNel Aleccia
 
The private insurance market has proved wildly inadequate in providing financial security for millions of older Americans, in part by underestimating how many policyholders would use their coverage.
 
This article is part of the Dying Broke series examining how the immense financial costs of long-term care drain older Americans and their families.
 
For 35 years, Angela Jemmott and her five brothers paid premiums on a long-term care insurance policy for their 91-year-old mother. But the policy does not cover home health aides whose assistance allows her to stay in her Sacramento bungalow, near the friends and neighbors she loves. Her family pays $4,000 a month for that.
 
“We want her to stay in her house,” Ms. Jemmott said. “That’s what’s probably keeping her alive, because she’s in her element, not in a strange place.”
 
The private insurance market has proved wildly inadequate in providing financial security for most of the millions of older Americans who might need home health aides, assisted living or other types of assistance with daily living.
 
For decades, the industry severely underestimated how many policyholders would use their coverage, how long they would live and how much their care would cost.
And as Ms. Jemmott belatedly discovered, the older generation of plans — those from the 1980s — often covered only nursing homes.
 
Only 3 to 4 percent of Americans 50 and older pay for a long-term care policy, according to LIMRA, an insurance marketing and research association. That stands in stark contrast to federal estimates that 70 percent of people 65 and older will need critical services before they die.
 
Repeated government efforts to create a functioning market for long-term care insurance — or to provide public alternatives — have never taken hold. Today, most insurers have stopped selling stand-alone long-term care policies: The ones that still exist are too expensive for most people. And they have become less affordable each year, with insurers raising premiums higher and higher. Many policyholders face painful choices to pay more, pare benefits or drop coverage altogether.
 
“It’s a giant bait and switch,” said Laura Lunceford, 69, of Sandy, Utah, whose annual premium with her husband leaped to more than $5,700 in 2019 from less than $3,800. Her stomach knots up a couple of months before the next premium is due, as she fears another spike. “They had a business model that just wasn’t sustainable from the get-go,” she said. “Why they didn’t know that is beyond me, but now we’re getting punished for their lack of foresight.”

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Older Adult Population will Surpass Younger Age Groups in 2029 as ‘Notable Shifts’ Occur

McKnight’s Senior Living | By Kimberly Bonvissuto
 
The US older adult population is expected to surpass the size of younger age groups in 2029, according to the latest US Census Bureau population projections, which also forecast that the nation’s population will reach a high of almost 370 million in 2080 before declining to 366 million in 2100.
 
The 2023 national population projections indicate that the US experienced “notable shifts” in components of population change over the past five years, including the increasing older adult population.
 
The statistics are being watched closely by the long-term care industry as it clambers to capture a growing number of prospective residents while also addressing workforce shortages.
 
“In an ever-changing world, understanding population dynamics is crucial for shaping policies and planning resources,” Sandra Johnson, a Census Bureau demographer, said in a statement. 
Continued declines in fertility are projected to shift the age structure of the population to more older adults compared with children aged fewer than 18 years beginning in 2029. By 2100, 29.1% of the population is projected to be 65 or more years old compared with 16.4% of the population being aged 18 or fewer years. The 85-and-older population also is projected to increase from 1.95% of the population in 2022 to 7.46% of the population in 2100.
Similarly, the median age of the US population, which represents the age at which half the population is older and half is younger, is projected to increase over time. In 2022, the median age for the total population was 38.9. In 2100, the median is projected to increase to 47.9 years. 
 
The US Census Bureau’s 2020 Service Annual Survey showed that aging adults boosted the bottom lines of assisted living and continuing care retirement communities. More recent studies, however, show that up to 80% of older adults— 47 million — don’t have the financial resources to cover the care they may need down the road. 
 
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NHPCO Webinar: CMS Special Focus Program

NHPCO will be hosting a Council of States focused webinar on the Special Focus Program on December 5^th at 2PM (MST).

HHAC members are eligible and encouraged to attend. 

Please register here.