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Long-Term Care: Baby Boom Generation
Increases Challenge of Financing Needed
Services
Chairman Grassley, Ranking Member Baucus, and Members of the
Committee:
I am pleased to be here today as you discuss the challenges we as a society
face in financing long-term care needs. These challenges are formidable
already, as an estimated 9 million persons age 18 or older receive long-
term care assistance, either at home or in institutions such as nursing
homes. While family members provide much care, paying for purchased
services presents a significant financial burden for many individuals and
for public health care programs. For those needing nursing home or other
extensive continuous care, the costs can be substantial. On average,
nursing home care currently costs $55,000 annually, with many nursing
home residents paying much of that out of their own pockets.
Providing and financing long-term care will become even more challenging
in just over a decade when the 76 million baby boomers begin to turn 65.
Over the next 30 years, the number of elderly individuals is expected to
double. Moreover, with baby boomers expected to live longer and greater
numbers reaching age 85 and older, this generation is expected to have a
dramatic effect on the number of people needing long-term care services,
as the prevalence of disabilities and dependencies increases with age. To
help alleviate the pressures on public programs and families in meeting the
needs of these persons, some advocate a growing role for private long-
term care insurance. Several recent congressional initiatives aim to
increase the use of private insurance in financing long-term care needs.
These initiatives include establishing a program to make group long-term
care insurance available to federal employees, members of the uniformed
services, and civilian and military retirees; and proposals to provide
additional tax subsidies to individuals purchasing long-term care
insurance.
In view of these issues, you asked us to provide the Committee
information on long-term care insurance to assist you in considering what
role it may play in meeting future long-term care needs. Accordingly, my
remarks today, which are based on our previous work and other published
and ongoing research,' focus on (1) the increased demand an aging baby
boom generation will likely create for long-term care; (2) an overview of
current spending for long-term care, including recent changes in Medicaid
and Medicare financing of long-term care; and (3) the potential role of
private long-term care insurance in helping finance this care, including
1A list of related GAO products follows this statement.GAO-01-563T
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United States. General Accounting Office. Long-Term Care: Baby Boom Generation Increases Challenge of Financing Needed Services, text, March 27, 2001; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc289717/m1/2/: accessed April 24, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.