By H. Stephen Kaye, Charlene Harrington, and Mitchell P. LaPlante

Long-Term Care: Who Gets It, WhoProvides It, Who Pays, And HowMuch?

ABSTRACT Long-term care in the United States is needed by 10.9 millioncommunity residents, half of them nonelderly, and 1.8 million nursinghome residents, predominantly elderly. Ninety-two percent of communityresidents receive unpaid help, while 13 percent receive paid help. Paidcommunity-based long-term care services are primarily funded byMedicaid or Medicare, while nursing home stays are primarily paid for byMedicaid plus out-of-pocket copayments. Per person expenditures are fivetimes as high, and national expenditures three times as high, for nursinghome residents compared to community residents. This suggests that aredistribution of spending across care settings might produce substantialsavings or permit service expansions.

Long-term care services, whether pro-vided in institutions or the commu-nity, areessential to thewell-beingofmany elderly and nonelderly peoplewith limitations in performing daily

activities. Long-term care provided outside ofinstitutions, known as personal assistanceservices, personal care services, or home andcommunity-based services, also enables manypeople with disabilities to maintain their inde-pendence; avoid institutionalization; and parti-cipate in family, community, and economic ac-tivities. Noninstitutional long-term care can bepurchased or obtained from family, friends, andother volunteer helpers.With projections indicating a doubling in the

need for long-termcareover thenext forty years,1

spending on publicly paid services—already anever-increasing share of ever-rising nationalhealth care expenditures—is of grave concernto policymakers at the federal and state levels.Efforts to both improve the long-term care sys-tem and reduce spending are limited by a lack ofinformation on how much is spent, for whatservices and in what settings, and the extentand nature of unpaid help that people receive.This paper is an attempt to partly fill that gap. Its

findings, for example, indicate that most long-term care spending goes to the relatively smallminority of long-term care recipients living innursing homes, that the vastmajority of commu-nity residents needing long-term care get onlyunpaid help, and that although about half of alllong-term care recipients are under age sixty-five, four-fifths of long-term care spending isfor elderly recipients.

Data Sources And MethodsThis paper explores the size and characteristicsof the U.S. population needing help with dailyactivities, the nature of unpaid and paid provi-ders of long-term care, sources of payment, andspending for those services, both individuallyand on a national level. We conducted analysesof public-use data sets from five nationally repre-sentative federal surveys that use state-of-the-artdata collection methods: (1) The Survey of In-come and Program Participation, a periodiclongitudinal surveyof 96,000household respon-dents conducted in person by the Census Bureauin 2005.2 (2) The 2007 National Health Inter-view Survey, an annual in-person survey of95,000 household respondents sponsored by

doi: 10.1377/hlthaff.2009.0535HEALTH AFFAIRS 29,NO. 1 (2010): 11–21©2010 Project HOPE—The People-to-People HealthFoundation, Inc.

H. Stephen Kaye(steve.kaye@ucsf.edu) is anassociate adjunct professor inthe Institute for Health andAging at the University ofCalifornia, San Francisco, andco–principal investigator ofthe Center on PersonalAssistance Services.

Charlene Harrington is aprofessor of sociology at theUniversity of California, SanFrancisco, and principalinvestigator of the Center onPersonal Assistance Services.

Mitchell P. LaPlante is anadjunct professor in theDepartment of Social andBehavioral Sciences at theUniversity of California, SanFrancisco, and co–principalinvestigator of the Center onPersonal Assistance Services.

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the National Center for Health Statistics.3

(3) The 2007 American Community Survey,the Census Bureau’s annual mail-in survey ofthreemillion respondents living inall residentialsettings.4 (4) The 2004 National Nursing HomeSurvey, a representative survey of 13,500 resi-dents living in 1,500 nursing homes, conductedin person by the National Center for Health Sta-tistics.5 (5) The Medical Expenditure Panel Sur-vey, from the Agency for Healthcare Researchand Quality, providing monthly spending dataon 34,000 household respondents.We analyzed5,703homehealth spending records from2005–06.6

All five surveys contain questions regardingthe performance of such self-care activities asbathing and dressing, generally known as activ-ities of daily living (ADLs), and other routineactivities, such as shopping and doing house-work, known as instrumental activities of dailyliving (IADLs). Four of the surveys ask aboutthe need for help from other people, a standardmeasure of long-termcareneed. The exception isthe American Community Survey, which asksabout difficulty performing the activities. Forconsistency across surveys, ADLs comprise bath-ing, dressing, transferring from bed or chair,eating, using the toilet, and getting around in-side the home or nursing home room; we ex-cluded activities for which only supervision isprovided.Population numbers, proportions, and spend-

ing were calculated using sampling weights toobtain nationally representative estimates. Com-parisons mentioned in the text have been testedfor statistical significance, using tests appropri-ate for complex sampling designs, and werefound to be significant at the 95 percent confi-dence level or greater.

FindingsESTIMATES OF LONG-TERM CARE POPULATION SIZE

Exhibit 1 shows estimates from four surveys ofthe population needing long-term care services.We identify two main population groups byresidential setting: (1) Community residents,comprising households and noninstitutionalgroup quarters such as group homes, dormi-tories, and homeless shelters. The NationalHealth Interview Survey and Survey of Incomeand Program Participation are household sur-veys, but the American Community Survey in-cludes noninstitutional group quarters as well.(2) Institutional residents, comprising nursinghomes, facilities for people with intellectual anddevelopmental disabilities, other residentialhealth care facilities, and also prisons and jails.The National Nursing Home Survey targets nur-

sing homes only, but the American CommunitySurvey covers residents of all types of institu-tions. Focusing first on community residents,we present three tiers of population estimatesbased on the level of identified need.▸▸BROADLY DEFINED POPULATION: The

broadly defined long-termcarepopulationneedshelp with one ormore ADLs or IADLs. The ten orelevenmillion people, or about 4 percent of com-munity residents, in this category may get assis-tance from family members, friends, or paidhelpers, and might also rely on meal delivery,transportation, or homemaker services providedby community organizationsorgovernmentpro-grams. This broad definition is particularly rele-vant to policymakers concerned about the con-tinued availability of family helpers in the face ofthe aging of the population, the impact of suchhelp on families, and the ability of people withdisabilities to fully participate in society.The Survey of Income and Program Participa-

tion yields the largest and probably most accu-rate estimate, because it asks about help in eachactivity separately, rather thanaskingaboutmul-tiple activities at once, as in the National HealthInterviewSurvey.The somewhatnarrowerAmer-ican Community Surveymeasure, consisting of asingle question about difficulty with certain ADLtasks, is included here because it captures a farbroader population than questions about need-ing ADL help; furthermore, our analysis of asimilar measure in the Survey of Income andProgramParticipation indicates that the vastma-jority of people reporting ADL difficulty needhelp with either ADLs or IADLs and that mostpeople needing help in multiple ADLs/IADLsreport ADL difficulty.▸▸INTERMEDIATE POPULATION: The inter-

mediate long-term care population is composedof people needing ADL help. Both the Survey ofIncome and Program Participation and NationalHealth Interview Survey yield estimates ofroughly 4.7 million, or just under 2 percent ofthe population. The assistance that such peoplereceive is essential for their health, functioning,personal dignity, and very survival.7 For this rea-son, need at the ADL level is often seen as anindicator of potential usage of paid help, espe-cially for peoplewithout live-in familyhelpers. Inaddition, it is often treated as a minimum elig-ibility requirement for publicly funded commu-nity-based long-term care services.▸▸NARROWLY DEFINED POPULATION: Thenar-

rowly defined long-term care population in-cludes people needing help with two or moreADLs (for example, bathing and dressing to-gether, but not bathing alone). Its membersare often said to have an “institutional level ofneed.” This group is of particular policy rele-

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vance because eligibility for many federal andstate programs, especially those entailing insti-tutional services, as well as for long-term careinsurance benefits, hinges on requiring helpwith multiple ADLs. The narrowly defined long-termcarepopulationnumbers about 3.2million,including 2.3 million requiring help with threeor more ADLs. Its members are at high risk forinstitutionalization when needs go unmet.▸▸ESTIMATES: Althougholder adults aremuch

more likely than younger people to need long-term care, approximately half of the broadly de-fined long-term care population living in thecommunity is nonelderly. Even among the nar-rowly defined long-term care population, whosedisabilities are more significant, more than45 percent are under age sixty-five.With respect to the institutional long-term

care population, estimates of the number of nur-

sing home residents vary from 1.5 million to1.8 million, the vast majority of whom need helpwith multiple ADLs. (The larger, more recentestimate from the American Community Surveyis probably more accurate.) It should be notedthat these are point-in-time estimates ratherthan annual totals, a common feature of admin-istrative data. Unlike the community-dwellinglong-term care population, the nursing homepopulation is predominantly (more than four-fifths) elderly.In all, 10.0 million Americans, living either in

the community or in institutions, report ADLdifficulty. About half of this population is underage sixty-five.

CHARACTERISTICS OF THE LONG-TERM CARE POPU-

LATION Demographic, economic, and functionalcharacteristics of the broadly defined long-termcare population, based on data from the 2007

EXHIBIT 1

Population Needing Long-Term Services In The United States, By Age, Residential Setting, Measure Used, And Data Source,Selected Years

Age group (thousands of people, percent of population)

All agesa <18a 18–64 65+

Measure, data source No. % No. % No. % No. % % <65Community residentsBroadly defined LTC population

Gets ADL/IADL help, SIPP 10,887 4.1 393 0.8 5,073 2.8 5,421 15.5 50.2Gets ADL/IADL help, NHIS 9,613 3.5 281 0.5 4,409 2.4 4,923 13.6 48.8ADL difficulty, ACS 8,382 3.0 460 0.9 4,154 2.2 3,769 10.4 55.0

Intermediate LTC population

Gets ADL help, SIPP 4,774 1.8 299 0.6 1,972 1.1 2,503 7.2 47.6Gets ADL help, NHIS 4,673 1.7 281 0.5 1,899 1.0 2,493 6.9 46.7

Narrowly defined LTC population

Gets help with 2+ ADLs, SIPP 3,143 1.2 193 0.4 1,303 0.7 1,647 4.7 47.6Gets help with 2+ ADLs, NHIS 3,169 1.2 219 0.4 1,205 0.6 1,746 4.8 44.9Gets help with 3+ ADLs, SIPP 2,301 0.9 154 0.3 924 0.5 1,223 3.5 46.8Gets help with 3+ ADLs, NHIS 2,305 0.8 179 0.3 862 0.5 1,265 3.5 45.2

Institutional residentsBroadly defined LTC population

ADL difficulty (any inst.), ACS 1,575 19 268 1,288 18.2

Nursing home residents, ACS 1,788 – 250 1,538 14.0

Nursing home residents, NNHS 1,492 3 172 1,317 11.7

Narrowly defined LTC population, nursinghomes onlyGets help w/ 2+ ADLs, NNHS 1,277 3 133 1,141 10.6

Gets help w/ 3+ ADLs, NNHS 1,184 3 121 1,060 10.5

All residential settingsBroadly defined LTC population

ADL difficulty, ACS 9,957 3.5 479 0.9 4,422 2.3 5,056 13.4 49.2

SOURCE Authors’ tabulations of 2005 data from the Survey of Income and Program Participation (SIPP) and from the 2007 NationalHealth Interview Survey (NHIS), the 2007 American Community Survey (ACS), and the 2004 National Nursing Home Survey (NNHS);2007 ACS nursing home resident data from Table S2601B at http://factfinder.census.gov NOTES ADL is activities of daily living. IADL isinstrumental activities of daily living. aBeginning at age 5 for NHIS and ACS, age 6 for SIPP, and age 18 for ACS nursing homepopulation; IADL measure asked of ages 15+ in SIPP and 18+ in NHIS.

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American Community Survey, are shown in Ex-hibit 2. Institutional and community residentsare shown separately, with the latter divided intotwo categories: 8.0 million people living inhouseholds, and 366,000 people living in non-institutional group quarters, such as grouphomes.Institutional residents are both far older and

much more likely to be female than all of theother groups. Compared to people withoutlong-term care needs, there is a higher propor-tion of whites and African Americans, and a low-er proportion of Latinos, Asians, and Pacific Is-landers, among people with long-term careneeds in all settings. There is a lower proportionof Native Americans among institutional long-term care recipients, but a higher proportion inthe household long-term care population, than

among people without long-term care needs.Adults with long-term care needs who live in

institutions are less than half as likely to be mar-ried as those living in households, who are them-selves much less likely to be married than adultswithout long-term care needs. Very few adultsliving in noninstitutional group quarters aremarried, and most have never been married.The high proportion of unmarried people inthe community-resident long-term care grouptranslates to a much greater likelihood of eitherliving alone or sharing a residence with non-relatives. People in such circumstances are ofparticular policy interest, because they often lacka ready supply of unpaid helpers and thereforehave a greater need for paid services.Regardless of residence, people with long-

term care needs tend to be less educated, and

EXHIBIT 2

Demographic, Economic, And Functional Characteristics Of The Broadly Defined Long-Term Care (LTC) Population, By Residential Status, 2007

LTC populationa

Institutional residents

Community residents

Households Group quarters People without LTC needsPopulation (thousands) 1,575 8,016 366 270,968

Age and sexPercent age ≥65 81.8% 45.2% 40.0% 12.1%Median age (years) 82 62 57 38Percent female 66.8% 59.5% 52.7% 50.5%

Race/ethnicityWhite 82.2% 76.4% 79.5% 76.1%African American 14.3 16.0 15.8 12.8Asian/Pacific Islander 1.5 3.1 2.0 5.2American Indian/Alaska Native 0.9 2.4 1.2 1.4Latino/Hispanic 5.1 10.4 6.3 14.6

Marital status (age 18+)Married 18.0% 40.7% 6.5% 53.8%Widowed 51.7 25.0 21.4 5.7Otherwise unmarried 30.3 34.3 72.1 40.5

Living arrangementsHousehold with family/relatives 0.0% 73.8% 0.0% 82.3%Alone/other 100.0 26.2 100.0 17.7

Educational attainment (age 18+)High school graduate 59.8% 66.5% 47.4% 85.2%College graduate 9.5 11.5 7.9 25.6

IncomeFamily income <100% FPL – 22.1% 62.4% 12.0%Family income <200% FPL – 49.3% 91.1% 29.0%Median household income – $32,400 – $60,000Median individual income (ages 18+) $9,200 $10,800 $8,000 $23,900

Functional statusMobility impairment 92.8% 89.4% 75.0% 7.0%Cognitive impairment 75.8 55.3 84.8 4.3Sensory impairment 37.2 30.7 31.6 3.5

SOURCE Authors’ tabulations of public use data from the American Community Survey. NOTES Tabulations exclude children younger than age 5. Poverty status (percent offederal poverty level, or FPL) is not determined for institutional residents. aPeople with difficulty bathing, dressing, or getting around inside the home.

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to havemuch lower personal incomes, than peo-plewithout long-term care needs. Among peopleliving in households, median household incomefor those with long-term care needs is little morethan half that of people with no such needs. Justunder half of the household population withlong-term care needs lives in or near poverty(<200 percent of the federal poverty level), asdomore than nine-tenths of those in noninstitu-tional group quarters. Finally, although the vastmajority of long-term care recipients in all set-tings experience mobility impairments, cogni-tive impairments (broadly defined) affect only55.3 percent of household residents, 75.8 per-cent of those in institutions, and 84.8 percent ofthose in noninstitutional group quarters.

SOURCES OF HELP FOR THE COMMUNITY-RESIDENTLONG-TERM CARE POPULATION Family membersare far and away the principal providers of assis-tance to the long-term care population living inhouseholds. Data from the Survey of Income andProgram Participation, which asks long-termcare recipients about their main (primary) help-er and a possible additional (secondary) helper,are shown in Appendix Exhibit 1.8 Despite theever-increasing attention and resources devotedto paid, noninstitutional long-term care ser-vices, only 13.0 percent of the broadly definedlong-term care population (or 22.5 percent ofthe narrowly defined population) use paid help-ers in either a primary or secondary role. Elderlypeople with broadly defined long-term careneeds use paid help at more than twice the rateofnonelderlypeople(18.0percentversus7.8per-cent), and people living alone are nearly fourtimesas likely tohavepaidhelpers as those livingwith relatives (26.2 percent versus 7.1 percent).Nearly half of the narrowly defined long-termcare population living alone gets paid help.Use of a paid secondary helper (such as for re-spite care) is rare across all groups.The 13.0 percent of the broadly defined long-

term care population receiving paid help trans-lates into approximately 1.4 million U.S. adults.The survey probably underestimates the usage ofpaid help, because only information for the twomain helpers is recorded, and the questions as-sume that a paid helper is not a family memberwho gets paid for his or her time. Receipt of helpfrom a paid relative is not measured in any on-going federal survey.Despite the greater reliance upon paid helpers

among elderly peoplewith long-term care needs,their usage of unpaid help is about the same asthatofworking-ageadults, just above90percent.Nearly all people with long-term care needs wholive with family get unpaid help, compared to81 percent of people living alone or with non-relatives. Among thenarrowly defined long-term

carepopulation, only 70.4 percent of those livingalone get unpaid help.Principal sources of help vary markedly with

age (Exhibit 3). Among the narrowly definedlong-term care population, help from parentsdominates for people under age thirty but thenfalls sharply at higher ages. Between ages thirtyand seventy-four, the spouse is the dominantsource of help, followed by an offspring—morelikely adaughter thana son. For ages seventy-fiveand older, when the spouse may have died orbecome a less effective helper, daughters andsons become the principal helpers.Usage of paid helpers hovers at roughly 15 per-

cent below age sixty, after which it begins to riseonceparents areno longer available and, at high-er ages, spouses decline in prevalence as helpers.The pattern by age, coupled with the much high-er usage of paid helpers among people livingalone, seems to imply that people generally gethelp from any available relative (or nonrelative),and only in the absence of such helpers are paidworkers sought out.Per Appendix Exhibit 1,8 relatively few people

with long-term care needs receive no help at all.Evenamongpeople livingalone, only4.7percentlack personal assistance entirely. However, thismeasure captures only a small fraction of thetotal unmet need for long-term care, which isfar more often experienced as a lack of sufficienthelp than as a complete absence of help.7

SOURCES OF PAYMENT FOR LONG-TERM CARE IN THE

COMMUNITY AND IN NURSING HOMES According toour analysis of Medical Expenditure Panel Sur-vey data, 1.6 million community residents of allages receive paid long-termcare eachmonth (seeExhibit 4 and Appendix Exhibit 2),8 consistentwith the 1.4 million figure from the Survey ofIncome and Program Participation for adults.This total excludes 0.9 million people who re-ceive home health services that do not involveADL or IADL help.Medicare and Medicaid are the primary

payers: Each program pays for all or part ofthe services received by about one-third of com-munity residents. Nearly one-quarter of recipi-ents pay out of pocket: 18.6 percent pay all ormost of the charges, and 5.4 percent pay lessthan half. Private insurance rarely pays for suchservices. Some 19.3 percent of recipients gettheir help paid for, in whole or in part, by someother source, generally a state or local program.A majority of the community-resident long-

term care population receiving paid help are re-ported as needing ADL help. This population ismore likely to receive federally funded services,and much less likely to pay for the bulk of theirservices themselves, than people needing onlyIADL help.

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Once again we find that a much smaller num-ber of nonelderly than elderly people receivepaid help. Services provided to people underage sixty-five are far more likely to be paid forby Medicaid, and far less likely to be paid foreither by Medicare or out of pocket, than areservices provided to their older counterparts.People receiving noninstitutional long-term

care often get additional services, generally de-livered by professionals such as nurses or phy-sical or occupational therapists, which are in-tended to treat a health condition or restorefunctioning. This fact complicates analysis oflong-term care spending, because charges forthese professional services, which are often sub-stantial, cannot generally be separated fromthose for personal assistance.A majority of community residents receiving

paid long-term care, however, get only personalassistance. For the 829,000 people in this cate-gory, Medicaid is a much more prominent payerthanMedicare, and self-pay contributes substan-tially. In contrast, the 794,000 people who re-ceive personal assistance plus some type of med-ical services at homearemore than twice as likelyto have their services paid for by Medicare, and

only half as likely to be paying out of pocket.Among people receiving personal assistance

without professional services, most obtain ser-vices through agencies rather than from self-employed, independent providers. The toppayers for agency-provided services are Medic-aid andMedicare, and very little is paid for out ofpocket.However, theopposite is trueof indepen-dent providers, the vast majority of whom(85.1 percent) are paid primarily by the recipientor the family. Despite the existence of consumer-directed, independent-provider options in somestates, Medicaid pays for only 10.1 percent ofindependent providers. Of all consumers ofMedicaid-paid personal assistance with no med-ical component, only 5.9 percent use indepen-dent providers; Medicare pays for agency-provided services almost exclusively. In contrast,among those paying for services out of pocket,most use independent providers, perhaps basedon lower rates or a preference for greater con-sumer control.During the initial period of service delivery,

the main payer is Medicare, which often coversrehabilitation and restorative services followinghospitalization (“postacute care”). After six

EXHIBIT 3

Major Sources Of Help With Daily Activities Among Community Residents With Two Or More Activities Of Daily Living(ADL) Needs, By Age

15–29 30–44 45–59

Age of person receiving services (years)

60–74 75–84

0

10

20

30

40

50

60

70

80%

85+

Parent

Paid helper

Daughter/son

Spouse

SOURCE Authors’ tabulations of 2005 data from the Survey of Income and Program Participation.

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months, Medicaid becomes the most promi-nent payer.Medicaid and the consumer are the two major

payers for nursing home stays, with out-of-pocket payments generally secondary to Medic-aid. Nonetheless, one-fifth of nursing home billsare paid out of pocket entirely or primarily, at aconsiderable financial burden. Medicare is thethird most prominent payer, followed by privateinsurance.Although Medicare covers payments for only

17.7 percent of nursing home residents, it is a

major payer for the first three months of a nur-sing home stay. The proportion of residentswhose charges are paid primarily out of pocketincreases from 10.7 percent during the firstthirty days to 28.3 percent during the fourththrough twelfth months and then declines to15.9 percent after three years. Partly becauseof eligibility rules requiring that a person’s as-sets be spent down,Medicaid pays for only aboutone-fifth of residents during the firstmonth, andthat proportion grows to reach just over four-fifths for stays of greater than three years.

EXHIBIT 4

Payments And National Expenditures For Paid Long-Term Care (LTC) Services, By Setting, Level Of Need, Age Group, Type Of Services Received, AndDuration Of Receipt Of Services, Selected Years

Number ofrecipients(thousands)

Percent ofrecipients makingan out-of-pocketpayment

Median monthly paymentAnnual expenditure(billions of2009 dollars)

From allsourcesa

Out ofpocketb

Community residents (2005–06)Any LTC services at homec 1,623 24.0% $795 $214 $33.7Level of need

Needs ADL help 942 17.8 926 480 25.3Needs only IADL help 682 32.5 545 120 8.5

Age group

Under 65 542 16.1 773 167 15.365+ 1,081 27.9 806 280 18.4

Type of services received

Personal assistance only 829 30.6 550 120 10.7Needs ADL help 379 19.7 810 400 6.7Needs only IADL help 450 39.7 400 100 4.0Agency provider 650 15.3 703 90 9.5Independent provider 180 86.0 152 120 1.2

Personal assistance plus professionalservices

794 17.1 1,075 500 23.1

Needs ADL help 562 16.5 1,162 500 18.6Needs only IADL help 232 18.4 954 530 4.5

Duration of receipt of services (prior to interview)

Initial 3 months 319 29.2 772 220 5.7Months 4–6 194 29.5 611 300 3.0Month 7 and beyond 1,116 22.7 768 264 24.2

Other home health servicesd 872 13.6 571 72 11.8

Nursing home residents (2004)All residents 1,492 71.5 4,230 923 113.7Excluding 3 mos. after hospitalization 1,321 76.2 4,170 916 93.9

Age group

Under 65 175 49.2 3,990 677 13.565+ 1,317 74.5 4,260 960 100.2

Length of stay (at time of interview)

≤30 days 156 26.3 8,160 1,883 19.931–90 days 144 54.9 4,980 1,271 13.591 days–1 year 359 76.9 4,170 1,080 25.113 months–3 years 451 79.3 4,080 926 29.7>3 years 382 82.0 4,080 792 25.5

SOURCE Authors’ tabulations of public use data from the 2005 and 2006 Medical Expenditure Panel Survey (for community residents) and the 2004 National Nursing HomeSurvey (for nursing home residents). aDetailed data on the contributions of various sources of payment (self/family as primary or secondary payer, Medicaid, Medicare,private insurance, and other) may be found in the technical appendix, online as in Note 8. bMedian includes only recipients making an out-of-pocket payment. cPersonalassistance and other home health services provided to people receiving paid personal assistance at home. dHome health services provided to people not receiving paidpersonal assistance at home.

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PER RECIPIENT LONG-TERM CARE SPENDING Themonthly payment data in Exhibit 4 reveal thattypical per recipient spending on noninstitu-tional and institutional long-term services ison entirely different scales. Themedianmonthlypayment for community residents is $795, whilethe median for nursing homes is $4,230; infla-tion-adjusting both figures to 2009 yields $928and $5,243, respectively. An even starker com-parison results if we consider only home-basedpersonal assistance services, excluding profes-sional services, for which the median expendi-ture is $550 permonth ($635 in 2009 dollars). Afairer comparisonwould be to consider only peo-ple with ADL needs, whose median community-based spending is $1,069 in 2009 dollars, aboutone-fifth of the nursing home expenditure.Onemight reasonably object that even the last

comparison does not adequately take into ac-count differences in the levels of need betweenthe community-resident and institutional popu-lation. Because the Medical Expenditure PanelSurvey lacks information on specific ADL limita-tions, we cannot directly compare spending onpeople with the same level of need, but we canuse the Survey of Income and ProgramParticipa-tion to compare the extent of need amongpeoplewith ADL needs who get paid, community-basedlong-term care services with that of the institu-tional long-term care population. Despite asomewhat lower level of need among communitythan institutional residents (mean number ofADLneeds is 3.5 versus 3.9), however, a substan-tial minority of community residents with ADLneeds report a very high level of need (36.5 per-cent with five or six ADL needs, compared to48.1 percent of the institutional population).These data suggest that differences in level ofneed could account for some, but by no meansall, of the differences in spending between insti-tutional and noninstitutional services.Indeed, the distribution of institutional and

noninstitutional long-term care expenditures(Exhibit 5), with the latter limited to the inter-mediate long-term care population, shows littleoverlap between the two residential settings,despite the substantial overlap in levels of need.Nearly all nursinghomestays cost at least $3,500per month, in 2009 dollars. But most noninsti-tutional expenditures are under $1,500 permonth, in 2009 dollars, and 87.4 percent areunder $3,500 per month.Out-of-pocket spending is also much greater

for institutional than for noninstitutional ser-vices (Exhibit 4). AmongpeoplewithADLneeds,themedian nursing home out-of-pocket expenseis nearly twice as high as that for noninsti-tutional services ($554 versus $1,065, in 2009dollars).

The first month of a nursing home stay typi-cally costs twice as much as any month after thefirst year. The beginning of a stay typically in-volves additional services, often because the per-son has just been discharged from a hospital.Because such services fall under the Medicarepostacute budget category, they are not alwaysclassified under the long-term care umbrella; Ex-hibit 4 shows expenditures for all residents ex-cept those whowere hospitalized prior to admis-sion and are in their first ninety days of a stay.

ESTIMATED NATIONAL LONG-TERM CARE SPENDING

We estimate the total annual spending on paidlong-term care services, delivered either in arecipient’s home or in a nursing home, as$147.4 billion, adjusted for inflation to 2009 dol-lars. The figure is an approximate estimate oftotal nursing home spending plus spendingfor community residents receiving assistancewith daily activities, and including other homehealth services delivered to those individuals.Our estimate of $113.7 billion in annual nursinghome spending would increase to $136.2 billionif we were to use the American Community Sur-vey’s higher estimate of the nursing home popu-lation. Our estimate of $33.7 billion in noninsti-tutional long-term care spending excludes homehealth services provided to people not receiv-ing assistance with daily activities, estimatedat $11.8 billion.Noninstitutional services account for only

22.9 percent of the $147.4 billion total. About13 percent of that total is for services deliveredto people within three months of admission toa nursing home following hospitalization; agood part of that spending is probably for post-acute services that some readers might not con-sider long-term care.Some 80.5 percent of total expenditures, or

$118.6 billion in 2009 dollars, goes to peopleage sixty-five or older. Elderly recipients accountfor amajority of both community-based and nur-sing home–based expenditures (54.6 percentand 88.1 percent, respectively).On thenoninstitutional side, three-quarters of

the total is for people with an ADL level of need.More than half is for those with ADL needs whoare also getting medical care at home. Amongpeople getting only personal assistance at home,the vast majority (88.7 percent) of funds go toagencies. Only the remaining 11.3 percent go toindependent providers, whose typical monthlycharges are much less than those of agency pro-viders. Only 0.8 percent of total national long-term care spending goes to independent provi-ders of personal assistance alone.Estimating the enormous economic value of

unpaid long-termcare is beyond the scope of thispaper, but it has been addressed by others.9,10

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DiscussionOur analyses of data from five national surveyspaint a portrait of long-term care in the UnitedStates that is sometimes surprising. Some ten toeleven million community-dwelling Americansneed help with daily activities. Adding the ap-proximately 1.5 million people receiving long-term care services in nursing homes yields anoverall long-term care population of about12 million, or roughly 4 percent of the totalpopulation.The proportion of the population needing

long-term care rises dramatically with age, a factthat leads many to assume that most of the long-term care population is elderly. Not so: Abouthalf of community-dwelling Americans needinglong-term care are younger than age sixty-five.Even when the much older nursing home popu-lation is added in, only a slight majority of theentire long-term care population is elderly. Re-search anddata collection focusing solely onold-

er adultswith long-termcareneedsmisseshalf ofthe story.Amore important imbalance is in the amounts

spent: Four-fifths of national long-term carespending goes to the half of the long-term carepopulationwhoare elderly.Most of that is publicspending, but there is a substantial out-of-pocketcomponent, and most of it is spent on institu-tional services. Is this imbalance in spending theresult of different circumstances (for example,greater availability of unpaid helpers for thenonelderly or greater health care needs amongthe elderly) or of public programs that serve onlyor primarily older people, or offer only institu-tional services, which younger people do notwant? Further research is needed, butwe suspectthat public programs foster age inequities in theavailability of paid services.Aside from age itself, another key difference

between the institutional and noninstitutionalpopulations is the much higher rate of cogni-

EXHIBIT 5

Distribution Of Monthly Long-Term Care Spending, By Residential Setting, Inflation-Adjusted To 2009

Home/community services for people with ADL needsNursing home services

Perc

ent o

f rec

ipie

nts

SOURCE Authors’ tabulations from the 2005 and 2006 Medical Expenditure Panel Survey and the 2004 National Nursing Home Survey.

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tive impairment among those living in nursinghomes. Age differences also contribute to agreater likelihood of nursing home residents’being widowed or otherwise unmarried, com-pared to their community-dwelling counter-parts. Indeed, a large majority of household res-idents with long-term care needs live with aspouse, family, or other relatives, who typicallyserve as ready sources of unpaid help.The critical importance of unpaid help ismade

clear by data showing that about nine-tenths ofthe community-dwelling long-term care popula-tion relies on a family member, relative, friend,or volunteer as the primary source of help withdaily activities. Only among the narrowly de-fined long-term care population living alonedoes the prevalence of a paid primary helper(44 percent) exceed one-quarter of recipients,and it is only 7 percent for those living withfamily. The vast majority of the long-term carepopulation with access to unpaid help appear touse it, and to use it almost exclusively—a findingthat should help allay policymakers’ fears thatgreater access to publicly financed long-termcare would result in a high rate of substitutionof paid services for unpaid services. Further-more, usage of secondary paid helpers is tinyacross all groups, which indicates that paid helpis rarely used to supplement unpaid help.One crucial piece ofmissing information is the

extent to which long-term care needs are met orunmet. Unlike unmet need for health care, un-met need for long-term care is not routinelymea-sured in any federal survey of people of all ages.Data from the mid-1990s indicate that unmetlong-term care needs affected about one-fifthof the long-term care population7,11 but withoutrecent, recurring, and geographically detailedestimates, it is difficult to assess the extent towhich low rates of use of paid help are amatter ofpreference versus lack of access, and to whatdegree increased availability of paid long-termcare could reduce unmet need. The long-termcare population living alone, without spousesor other family members conveniently situatedto offer help, is particularly vulnerable. Becauseincome levels among the community-residentlong-term care population are so low, it is doubt-

ful that many such people could afford to pay forservices entirely or mostly on their own.A major payer for long-term care among com-

munity residents is Medicaid, whose programsoffering noninstitutional long-term care varywidely from state to state and even from onedisability group to another. As a consequence,there are undoubtedly access disparities result-ing in greater unmet needs in some places thanothers, and for some population groups thanothers. There is an urgent need for population-based data that could facilitate assessing thescope of the problem, identifying policy solu-tions, and estimating their potential costs.The typical monthly nursing home bill is far

greater than that for noninstitutional services,and national expenditures on nursing homes aremore than three times those for noninstitutionallong-term care services. Greater per recipientnursing home costs can be only partly attributedto a greater need for services.Whether institutional service delivery can be

justified despite its expense, based on servicesneeded and desired by the recipient, dependson individual circumstances, including the avail-ability of adequate personal assistance and ap-propriate living arrangements in the commu-nity. Further research is desperately needed tobetter assess the appropriateness and cost-effec-tiveness of different long-term care settingsbased on the recipient’s functional and personalcharacteristics. Another potential means of re-ducing expenditures would be for governmentprograms to use independent providers of non-institutional long-term care, an approach thatwould also afford recipients greater control overtheir services than through agency providers.A redistribution in long-term care spending

from institutional to noninstitutional settings,and from agency to independent providers, ap-pears to offer the potential for a sizable reduc-tion in spending or for an expansion of servicesto a broader population for the same expendi-ture.We hope that our findings, along with theadditional research we recommend, will helppublic programs make the most effective useof long-term care dollars. ▪

This research was conducted at theCenter for Personal Assistance Serviceswith funding from the National Instituteon Disability and RehabilitationResearch (Grant no. H133B080002).

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NOTES

1 U.S. Department of Health and Hu-man Services. The future supply oflong-term care workers in relation tothe aging baby boom generation:report to Congress. Washington(DC): DHHS; 2003.

2 U.S. Census Bureau. Survey of In-come and Program Participation2004 panel wave 5 topical modulemicrodata file. Washington (DC):U.S. Census Bureau; 2009.

3 National Center for Health Statis-tics. National Health Interview Sur-vey 2007 microdata file. Hyattsville(MD): NCHS; 2008.

4 U.S. Census Bureau. AmericanCommunity Survey 2007 public usemicrodata file. Washington (DC):

U.S. Census Bureau; 2008.5 National Center for Health Statis-

tics. National Nursing Home Survey2004 microdata file, revised.Hyattsville (MD): NCHS; 2009.

6 Agency for Healthcare Research andQuality. Medical Expenditure PanelSurvey 2005 and 2006 home healthvisits microdata files. Rockville(MD): AHRQ; 2008.

7 LaPlante MP, Kaye HS, Kang T,Harrington C. Unmet need for per-sonal assistance services: estimatingthe shortfall in hours of help andadverse consequences. J Gerontol BPsychol Sci Soc Sci. 2004;59(2):S98–108.

8 The appendix is available online at

http://content.healthaffairs.org/cgi/content/full/29/1/hlthaff.2009.0535/DC1

9 LaPlante MP, Harrington C, Kang T.Estimating paid and unpaid hours ofpersonal assistance services in ac-tivities of daily living provided toadults living at home. Health ServRes. 2002;37(2):397–415.

10 Arno PS, Levine C, Memmott MM.The economic value of informalcaregiving. Health Aff (Millwood).1999;18(2):182–8.

11 Desai MM, Lentzner HR, Weeks JD.Unmet need for personal assistancewith activities of daily living amongolder adults. Gerontologist. 2001;41(1):82–8.

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