Long-Term Care and Women

Long-term care is costly. In 1999, the average annual cost of care in a nursing home was $56,000. Persons of moderate income and limited savings can exhaust their money if they pay out-of-pocket for nursing home care, and they then must turn to Medicaid, the federal-state program that pays for medical care for poor people. Medicaid covers the costs of nursing-home care for poor people or for people who become impoverished as a result of paying nursing-home bills.

In 1997, of the 1.5 million elderly nursing-home residents, about three-fourths were women with a mean age of eighty-five, according to data from the 1997 National Nursing Home Survey (see Gabrel, 2000). The survey reported that 38 percent of women nursing-home residents had Medicaid as their primary source of payment when they entered the nursing home, but the care of about 57 percent of women residents was paid for by Medicaid.

Senior housing called assisted living has rapidly become an alternative to nursing homes for people who need only assistance with daily activities like bathing and dressing, rather the skilled nursing and around-the-clock care of a nursing home. But assisted living can cost as much as $2,000 or $3,000 a month.

Home care can be very costly as well—the average cost of a home-care visit in 1998 was $77. Consider the situation of an eighty-two year-old woman who lives alone and fractures her hip. Medicare will pay for much of her hospital stay, but will pay for only a short stay in a nursing home if she needs rehabilitation before she can go home. At home, she might qualify for limited home health care, paid for by Medicare, but soon she will face paying out-of-pocket if she needs the help of a home-care aide to bathe and dress or to clean house and shop.

Women age sixty-five and older who are Medicare beneficiaries still face high out-of-pocket costs, averaging $2,520 a year in 1999— or about 20 percent of income, on average. This compares to $2,320 in out-of-pocket costs (17 percent of income) for older men.

Married women, who are more likely to outlive their husbands than vice versa, must also face the prospect that a couple's joint income could be severely depleted if a husband enters a nursing home, where costs can quickly eat up their income and savings. A wife will not be forced to sell their house to pay her husband's nursing home bills, however. In 1988, Congress enacted provisions, as part of the Medicaid law, that prevent a spouse from becoming impoverished when one member of a couple enters a nursing home. These provisions are known as spousal impoverishment protection. If a wife remains at home when her husband enters a nursing home, she is able to retain about half the family's assets, up to about $87,000 and up to about $2,175 a month of income (in 2001). The amounts are indexed each year for inflation.

Long-term care insurance may be an option to protect oneself against the high costs of long-term care services. However, long-term care insurance premiums increase with age and so must be initiated well before individuals may perceive a need for coverage. While a fifty-five year-old in the year 2000 might pay $1,500 a year for comprehensive benefits, a person who first purchases coverage at age seventy-five might pay $5,000 to $6,000 a year. In addition, even if she can afford a policy, an older woman with a pre-existing condition or disability may not be able to get coverage at all.

These numbers tell us that because of their longer lives and the high costs of care, older women face the prospect that an illness or a disabling condition can thrust them into difficult circumstances, or even into poverty. Their ability to continue living an independent life can thus be threatened. As they grow older, they are more likely to need long-term care services, and their ability to pay for such services becomes more uncertain.