Long-Term Care Financing

Estimates of formal spending for long-term care do not place a dollar value on the vast amount of unpaid care, including the value of wages foregone by family caregivers. The major long-term care provider is the family and, to a lesser extent, other unpaid informal caregivers. According to data from the 1994 National Long-Term Care Survey, more than seven million Americans—mostly family members—provide 120 million hours of unpaid care to older adults with functional disabilities living in the community. If these caregivers were paid, the cost would be between $45 billion and $94 billion a year.

The overwhelming majority of noninstitutionalized older adults with disabilities (about 95 percent) receive at least some assistance from family and friends. Approximately two-thirds rely solely on unpaid help, primarily from wives or daughters. As disability increases, elderly persons receive more informal care. Eighty-six percent of older adults at greatest risk for nursing home placement live with others and receive almost sixty hours of informal care per week, supplemented by a little over fourteen hours of paid assistance. Although reliable statistics are not available, many family members provide assistance to elderly relatives living in nursing homes, and others engage in long-distance caregiving— arranging for the care of a parent or other relative who lives far away.