A New Resource to Help Plan Long-Term Care Services for Older Adults

AARP is redefining the definition of long-term care for older people to include the availability of housing with services, accessible transportation, and funding of respite care for family caregivers. When my mother passed at the end of last year, I realized the importance for all these types of services. By expanding the definition of long-term care and increasing consistent, state-level data collection, AARP wants to help older people have “choice and control over their lives, thereby maximizing their independence and well-being.” It is important for retirement counselors to understand the condition of the long-term care system in the state their clients live, and be ready to incorporate services that supplement those provided by the state[1] into their clients’ retirement plans. This new site by AARP will help you do just that! – the Editor
AARP’s new site, the Long-Term Services and Supports Scorecard website (www.longtermscorecard.org) and report, is designed to measure state-level performance of long-term services and supports (LTSS) on four distinct levels:
  1. Affordability and access. This measurement “includes the relative affordability of private-pay LTSS, the proportion of individuals with private long-term care insurance, the reach of the Medicaid safety net and the Medicaid LTSS safety net to people with disabilities who have modest incomes, and the ease of navigating the LTSS system.”
  2. Choice of setting and provider. This characteristic “includes the balance between institutional services and home and community-based services (HCBS), the extent of participant direction, and the facilitation of consumer choice in publicly funded LTSS pro-grams. It also measures the supply and availability of alternatives to nursing homes.”
  3. Quality of life and quality of care. This parameter “includes level of support, life satisfaction, and employment of people with disabilities living in the community, and indicators of quality in nursing homes and in home health services.”
  4. Support for family caregivers. This last factor “includes level of support reported by caregivers, legal and system supports provided by the states, and the extent to which registered nurses are able to delegate health maintenance tasks to nonfamily members, which can significantly ease burdens on family caregivers.”

The Scorecard defines long-term services and supports (LTSS) as “assistance with activities of daily living (ADLs) and instrumental activities of daily living (IADLs) provided to older people and other adults with disabilities who cannot perform these activities on their own.” It includes all forms of paid and unpaid caregiver support, including professional and family contributions. High-performing systems (states) coordinate an older person’s housing, transportation, and health/medical services with the four levels of LTSS, as defined above.

While overall performance varies from state to state, the common characteristic uniting all states is the opportunity for improvement. Nonetheless, certain states already rank well across the four dimensions. The top five states are Minnesota, Washington, Oregon, Hawaii and Wisconsin. The following exhibit shows the ranking for all states.

(Click here to see the dimensions of long-term cart chart on the AARP site)

Within the four major levels of performance are 25 indicators or measures. The following exhibit lists those 25 measures as well as the states’ median scores by indicator and the range of state performances.

(Click here to see the first half of the indicators chart on the AARP site)

(Click here to see the second half of the indicators chart on the AARP site)

When it comes to paying for long-term care, the report notes that the cost of nursing home care is not “affordable” in any state. The national average cost of nursing home care is about 2.5 times the average annual household income of older adults; in 2010 the median cost of a nursing home was about $75,000 annually. At the individual state level, private room nursing home costs ranged from 1.7 times the average household income to 3.7 times. Home health care services costs average about 0.9 times household income. Assisted living costs were about $38,000 annually. The median hourly cost of home care was about $19, which translates to about $30,000 annually (assuming 30 hours of care per week). Long-term care costs in these ranges mean individuals and family members will use up savings and eventually have no choice but to rely on public support and services, such as Medicaid.

Because of the number of variables and decisions to be made in an LTSS situation, caregivers need a single point of convenient, relevant information. High performing LTSS systems offer a single entry point for caregivers to ask questions, obtain information and receive guidance regarding a long-term care situation. Having a single entry point then reduces the stress and strain felt by caregivers as they work through all the potential options for care they may have.

In terms of choice of setting and provider, the report observes that control over decision making is an important factor in healthcare satisfaction. States that offer a variety of service options and housing alternatives performed well on the scorecard, and they allowed consumer involvement in healthcare decisions. While most states have adequate nursing home capacity, many lack home- and community-based living options. Statistics indicate nursing home use is on the decline while HCBS usage is growing. Public assistance (such as Medicaid funding) for care in homes, assisted living, adult day services, etc. is limited; HCBS spending is limited to perhaps as little as 15% for consumers in poorly performing states contrasted with 60% spending in high performing LTSS states. An important control factor for consumers is the ability to directly hire, manage and fire (when necessary) direct care workers, known as “consumer direction” or “self direction.” High performing states in this category were able to use Medicaid funds in HCBS.

States that performed well in the quality of life/quality of care category were generally free from abuse, neglect and unhealthy practices. A high-performing LTSS system integrates health-related services (medical care) with support services (transportation, adult daycare, etc.). Consumer choice/control is respected, and individuals are treated with dignity and respect. Community involvement addressing the social and emotional needs of consumers is another important component for this category. As might be expected, states that scored well experienced lower levels of staff turnover in nursing facilities, resulting in more consistent care and longer-term consumer relationships with medical staff. Nursing home resident hospital admission and readmission rates were also lower in better performing states.

Finally, the report states that family caregivers are a key component in any LTSS system. The term “family caregiver” includes any relative, partner, friend, or neighbor who provides substantial assistance to an older person. The caregiver may or may not live with an older person, and the caregiver may be paid or unpaid (though nearly three quarters of caregivers are unpaid). High-performing LTSS systems recognize the stress and strains placed on caregivers and respond accordingly with caregiving support for the older person as well as emotional, social and physical support for the caregiver. Strong LTSS systems include family caregivers in the decision-making process regarding services and resources provided to an older person. It appears that many states now recognize the importance of assessing the level of mental and physical strain placed on caregivers as part of their LTSS system. High-performing LTSS systems also provide family caregivers with professional assistance (typically from a nurse) regarding routine maintenance tasks for an older person, such as tube feedings and drug administrations.

[1] More information about AARP’s long-term services assessment can be found in the full report titled Raising Expectations: A State Scorecard on Long-Term Services and Supports for Older Adults, People with Physical Disabilities, and Family Caregivers, available online at www.aarp.org.

 Mike Wilson, CFP®, CRC®, is the owner of Integrity Financial Planning located in Orland, IN. Prior to founding Integrity in 1998, he worked over two years as a faculty member at the College for Financial Planning in Denver, training other financial advisors. Mike has extensive experience in the mutual fund industry, having worked 10 years with Fidelity Investments and Invesco Mutual Funds. He has an MBA in Finance from Baylor University, and he is a Certified Financial Planner® and a Certified Retirement Counselor®. He serves as a technical reviewer for the Journal of Financial Planning, and helps keep the CRC study materials current.  Mike also writes personal finance columns for fwdailynews.com and the Greater Fort Wayne Business Weekly.   

Posted in: Medical and Long-term Care Planning, PROTECT the Plan from Retirement Risks

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