Long-Term Care Financing: Is Increasing Insurance Coverage Good Policy?

An often overlooked part of the health care debate is long-term care, which refers to services provided when illness, disability, or age-related problems keep someone from being able to perform everyday activities. These services can be provided through a variety of sources including nursing homes, home health aides, and spouses or children. Long-term care represents a large financial risk for the elderly, as services are costly, the risk of needing them is substantial, and private insurance coverage is low. Roughly $230 billion is spent directly on long-term care services, amounting to more than 10 percent of all U.S. health care expenditures (Iglehart 2010).