AARP: Elders Saying No To Nursing Homes

March 3, 2009 -- Washington, D.C. - Nursing home residents, beds, and occupancy rates have remained nearly constant in the last five years, even though the older population has increased, according to Across the States 2009, Profiles of Long-Term Care and Independent Living, a new state-by-state report from the AARP Public Policy Institute.

Specifically, the report finds that spending for long-term care services is not a primary force behind escalating Medicaid costs. The report shows that on average, Medicaid funds spent on home and community-based services (HCBS) can serve three older people or adults with disabilities for each resident in a nursing home.

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“Those states that have developed home and community based service programs are slowing the rate of growth in spending on care for older persons and people with disabilities,” said Susan Reinhard, Senior Vice President for Public Policy. “In these tough economic times, investment in home and community based services can contribute to long-term savings that could help preserve the safety net for future generations.”

Despite a growing trend towards providing HCBS—which most older people prefer—the report finds that the bulk of Medicaid long-term care dollars still go to nursing homes. Only a handful of states—New Mexico, Oregon, Washington, Alaska, and California—now spend more Medicaid dollars on HCBS than nursing homes, achieved through major system reforms. However, the number of people receiving Medicaid HCBS across the country is growing and now nearly equals the number in nursing homes.

The report presents comprehensive state-by-state data on long-term care services provided in home and community-based settings and nursing homes. It is designed to help policymakers in the states address the long-term care challenges of an aging population.

The population age 85 or older—the age group that is most likely to need long-term care services—is expected to increase by 74% between 2007 and 2030. As the baby boomers turn age 85 between 2030 and 2050, the age 85+ population will skyrocket by another 118%.

The report emphasizes, however, that family caregivers remain the main providers of long-term care services in all the states and nationwide. By providing personal care and even health care, family caregivers help to contain costs by delaying or preventing the use of nursing home and hospital care.

Among other highlights of the report:

• From 2007 to 2030, the population age 65+ is projected to grow by 89%, more than four times as fast as the population as a whole. The states with the greatest projected age 85+ population growth in this period are Alaska, Nevada, Arizona, Wyoming and New Mexico.

• About 1.44 million Americans live in nursing facilities, occupying 85% of a total of 1.7 million nursing home beds. Although people tend to associate long-term care with nursing homes, the great majority of people with disabilities live in community settings.

• The number of older people and adults with physical disabilities receiving Medicaid-funded HCBS increased by about one-third from 2000 to 2005, to a total of nearly 1.4 million beneficiaries.

• In 2007, nine states—Tennessee, Indiana, North Dakota, Utah, South Dakota, Kentucky, Alabama, Connecticut, and Delaware—spent 10% or less of their Medicaid long-term care funds for older people and adults with disabilities on HCBS – far below the national average of 27%. In fact, roughly two-thirds of the states fall below this national average.

• Older people with disabilities have a growing array of service options, but the services are costly and can deplete the life savings of older households. Assisted living has emerged as a major option for many older people, for example. The average private-pay base rate for assisted living services is about $3,000 per month, though this rate typically does not include skilled nursing or other intensive health-related services that are add-ons.

Across the States 2009 is available online at http://www.aarp.org/research/longtermcare/trends/d19105_2008_ats.html.

Source: AARP