Addressing the Needs of Pennsylvania's Seniors
Pennsylvania is home to the second largest senior population in the country. As such, the issues and concerns that affect seniors have an extremely large impact on our state. With the medical advancements we have made over the past few decades people are living much longer, and as such, requiring more care for longer periods of time. This has led to the development of an issue that is very important to the quality of life for many Pennsylvanians--how to fund long-term care.
The need for long-term care is typically triggered by the need for assistance with activities necessary in daily life such as bathing, eating or dressing. Patients who suffer from cognitive impairment resulting from illness, such as dementia and Alzheimer's disease, as well as individuals with disabilities often require long-term care. Long-term care can include any number of things--help with chores and activities in the patients own home, assistance with daily activities while residing in an assisted-living facility, and highly skilled care in a nursing facility all fall into this category.
With such a variety of illnesses and medical conditions needing long-term care, it is easy to see why it has become such an important issue. Long-term care expenditures represent one of the largest medical and financial risks facing seniors in the United States. It is estimated that nearly half of all Americans age 65 and above will require some form of long-term care, and with the imminent retirement of the baby boom generation, this number will rapidly grow. In fact, the Congressional Research Service estimates that by the year 2050, the number of Americans 85 years and older (the age group most likely to require long-term care) will triple in size.
As the situation currently stands, the impending increase in patients who require long-term care will place an enormous burden on Medicaid, a program that is already financially unsustainable. Less than 10% of American seniors have enough saved to cover even one year of nursing home care. Only 11% of those age 65 and older have long-term care insurance. Medicaid has become the nation's largest payer of long-term care services, assuming the financial burden for approximately half of all long-term care costs and nearly two-thirds of all nursing home patients. If only one-third of Medicaid long-term care beneficiaries had private coverage, Medicaid would save approximately $150 billion over the next ten years.
That leads us to the question, how can we make long-term care something that more seniors have planned for and can afford? Options include reducing the cost and enhancing the ease in which individuals are able to receive reverse mortgages. According to the U.S. Census Bureau, 81% of seniors own their own homes, and 73% of seniors own their homes free and clear of all debt. This represents nearly $1.9 trillion in untapped home equity, an incredible resource that would help seniors stay in their homes as long as possible and have access to services like home healthcare, adult daycare, and assisted living. As an added bonus, these individuals would still be able to leave assets to their loved ones. When the Congress returns to Washington in September, I will be introducing legislation to eliminate the current cap on the number of reverse mortgages that can be insured by the Federal Housing Administration. This will ensure that more seniors can free up their home equity in order to pay for their long-term care and other needs.
There are other options available as well. In previous congresses, I cosponsored the Health Care Access and Equity Act, which included a provision which would have allowed for a 100% deduction for long-term care insurance for any individual who does not have insurance subsidized by an employer. More recently, I cosponsored the Long-Term Care Insurance Partnership Program Act, which would amend the Social Security Act to permit additional states to enter into long-term care partnerships in order to promote the use of long-term care insurance.
Finding a better way to fund long-term care is one of the greatest financial challenges we will face in the years to come. Medicaid alone cannot continue to bear the expensive, increasing burden that long-term care has become. The government must find a way to encourage Americans to plan for their long term care needs, such as investing in private long-term care insurance, and as one of Pennsylvania's United States Senators, I will continue to make it a priority to do so.