Long-Term Care Financing

The financing of long-term care services comes from a patchwork of funds from the federal, state, and local levels, and from private dollars, primarily paid from the consumer's own pocket. According to data from the Centers for Medicare & Medicaid Services (CMS), almost $115 billion dollars were spent on long-term care (not including Medicaid waiver expenditures) in 1997, with the majority (72 percent) covering nursing home care and institutions for people with mental retardation. Public resources (primarily Medicaid and Medicare) accounted for 62 percent of institutional coverage and 56 percent of home care. Other federal programs (funded by the Title 20 of the Social Security Act, Older Americans Act, and the Department of Veterans Affairs) accounted for less than 4 percent of total long-term care spending. Approximately one third of long-term care expenditures were attributable to out-of-pocket expenses, with private insurance covering only 5 percent of nursing home expenditures and perhaps as much as 11 percent of home and community-based expenditures (primarily medically oriented home health care).