Long-term care costs continue to mushroom, and the future holds even greater increases as the baby boomer generation ages. Who is paying for long term care, how much money is it now costing, and where is care being delivered? The Long-Term Care Financing Project at Georgetown University has just released fact sheets addressing those questions.

The total national cost of long-term care in 2004 reached $194.2 billion, according to the Project. Of that, 49% was paid by the federal-state Medicaid program, with another 19% coming from Medicare (at federal government expense). Other public payments (including those for Veterans, Native Americans and active-duty military families) amounted to 3%. In other words, government programs pay nearly 3/4 of all long-term care costs.

Long-term care insurance and private health insurance payments amounted to 7% of the cost of care, with another 3% coming from fraternal organizations, charities and other private payers. That left about 19% of the cost of long-term care to be paid by patients and their families.

Of course, "long-term care" can be provided in nursing homes, assisted living and other facilities, and even in the home. The proportionate share of costs remained about the same when nursing home and non-institutional costs were compared, with one notable exception: the portion paid by individuals and family members was much lower outside the nursing home (at 7%) than in institutions (26%). That difference is more than equalized, however, when the non-economic costs of home care—lost wages and opportunities, health problems and costs, and other caregiver costs—are factored in.

Over the preceding decade, the cost of institutional care covered by Medicaid rose by about 15% (without considering inflation); at the same time, the community care costs covered by Medicaid increased by nearly 172%. Still, non-institutional care costs accounted for only 37% of the total 2005 Medicaid long-term care expenditures.

Community-based care expenditures vary widely from state to state. Oregon’s Medicaid program, for instance, spends 70% of its dollars in home and community-based care, while Mississippi’s community expenditures are just 13% of its total. According to the report cited by the Project, New Mexico (at 67%), Alaska (63%), Vermont (60%) and Minnesota (59%) round out the top 5 in community-based care expenditures; Arizona ranks 33rd at 32%. Vying with Mississippi for the bottom are the District of Columbia (16%) and Georgia, North Dakota and Ohio (tied at 23%).

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