Long Term Care Problem, Term Paper Example

Abstract

Long-term care requires attention because of the expenses involved. The term paper focuses on long-term care not only in Europe but also globally. The sources of material are the existing literary sources. It ends with a conclusion that though insurance is the best remedy for long term finance, the states should also step in to curb the phenomenon.

Introduction

A number of countries in the west and Asia over will deal with a stern challenge over the next 30 years. Indeed, while these societies become noticeably “older” as those born after world war two retire en masse, the prevalence of chronic disease and need for care will put unprecedented challenges on national health care systems. According to US Census Statistics, the number of 65-and-older individuals composed 15.1 percent of the total population in the year 2010; that number is tapped to hit 25% by 2020 and 30% by 2030 (US Census, 2012). At the same time, the number of senior citizens suffering from chronic disease (sometimes multiple conditions) is also expected to rise: The Alzheimer’s Association estimates that the number of individuals with Alzheimer’s will quadruple from the current number of 5 million to nearly 20 million by the year 2030 (Alzheimer’s Association . All of these factors together will test a long-term care system in the US that is not only poorly financed, but lacks the critical infrastructure and human resources to deal with the challenge. Of all the challenges, the US will need to heed lessons from other health care and social systems, embedding long-term care in existing insurance systems.

US Long-Term Care’s Financing Problem

To say that the United States has a long-term care problem is not as correct as saying that it has a long-term care financing problem. Indeed, the roots of the long-term care problem lie in the patchwork health insurance financing system that currently provides care in the US. Although private insurance companies provide coverage for many health care services in their plans, they do not provide long-term care as part of that bundle; one must purchase long-term care insurance separately and often at a price that does not make economic sense for many individuals. Public insurance, on the other hand, also does not provide a valid alternative. Medicare, the public insurance system many seniors rely upon for health care, only covers “skilled” nursing for a predetermined time period (60 days). Although many seniors (falsely) assume that stays (of any duration) will be covered. Indeed, of all the private and public health plans, only Medicaid provides actual coverage for long-term care but only after the recipient has depleted their assets significantly. Thus, long-term care in the United States suffers from a debilitating problem: there is not a commonly used financing mechanism for care.

Long-term Financing Abroad

If the United States does not have a proper functioning mechanism, it might make sense to look around to different countries in order to compare. Regardless of the country chosen outside of the United States, most industrialized countries have embedded long-term care financing as part of a larger tax system that provides health care for individuals. For example, in Sweden and Norway, citizens pay a rather tax rate (close to 30%) that not only goes to financing access to the national health care system, but also goes into a fund that provides a partial subsidy for those individuals who ultimately use long-term care services (Fukishima et al, 2010). The Nordic countries also institute price controls on the provision of long-term care, which is not a problem since a majority of the facilities are non-profit.

What the US can learn from abroad

There are several lessons that the United States can learn from looking as long-term care systems abroad. First, the government, or some type of centralized actor, has to create a larger, diversified risk pool in order for long-term care financing to work. The offering of long-term care insurance via private insurers in the United States has largely failed due to profound problems of asymmetric information: individuals who typically purchase long-term care insurance policies do so because they have conditions that will ultimately need care; healthy individuals who are needed to fill out the risk pool do not join because the premiums are too high. This market externality was likely behind the US government’s backing of the CLASS Act, a provision of the ACA that offered long-term care insurance to individuals via voluntary monthly contributions. However, due to the inappropriate nature of the actuarial underwriting, the CLASS Act was ultimately dropped from consideration (Gleckman, 2010).

Second, long-term care has to be implemented as part of a larger insurance scheme that guarantees long-term flows to providers. Part of the current problem with the system is that long-term care centers receive payments from several different providers that makes planning a problem. If the United States is serious about addressing this problem it can start through these two steps.

Conclusion

Overall, the United States faces a myriad of challenges regarding long-term care: an increasing aging population, a decreased number of workers, and an increasing incidence of chronic diseases such as Alzheimer’s that will require a robust long-term care system. The main problem: The United States lacks a feasible method to fund this care. Currently, it relies on a patchwork of care provided in unaffordable private insurance policies and last ditch Medicaid insurance. If the US wants to weather the upcoming demographic storm, it will need to undertake greater preparations of the long-term care system.

References

Alzheimer’s Association. Information on Alzheimer’s Association. Available at : http://www.alz.org/alzheimers_disease_facts_and_figures.asp

Fukushima, N., Adami, J. & Palme, M. (2010). The long-term care system for the elderly

in Sweden. CES Working Paper. Available at: http://www.ceps.eu/book/long-term-care-system-elderly-sweden.

Gleckman, H. (2010). Long-term care financing reform: Lessons from the US and Abroad.

Urban Institute Working Paper: Available at: http://www.commonwealthfund.org/~/media/Files/Publications/Fund%20Report/2010/Feb/1368_Gleckman_longterm_care_financing_reform_lessons_US_abroad.pdf.

Kaiser Health Foundation. (2012). Health Care Reform and the Class Act. Available at:

http://www.kff.org/healthreform/upload/8069.pdf

US Census. (2012). US Census data. Available at: http://www.census.gov/compendia/statab/

Almgren, G. (2012). Health Care Politics, Policy and Services: A Social Justice Analysis. New York, NY: Springer Publishing Company.

Andersen, R. M., Rice, T. H., & Kominski, G. F. (2007). Changing the U.S. Health Care System: Key Issues in Health Services Policy and Management (3rd ed.). San Francisco, CA: Jossey-Bass.

Anonymous, 2005, Long term care: Hearing before the Subcommittee on Health of the Committee on Ways and Means, U.S. House of Representatives, One Hundred Ninth Congress, first session, DIANE Publishing

Eckenwiler, L. A. (2012). Long-term Care, Globalization, and Justice. Baltimore, MD: The John Hopkins University Press.

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