Long-term care crisis looms; Californians unprepared for the costs
If you became disabled or incapacitated tomorrow, how long could you support yourself without any public assistance? A month? A year? What if you live to be 95?
The truth is, 99 percent of us are just one medical emergency — a stroke, an accident — away from needing such help, whether in the form of Social Security disability, Medicare or MediCal.
This is true for people who have worked all their lives and who have medical insurance. Many people do not realize that traditional health insurance does not cover long-term care. Medicare, which serves those 65 and older, includes personal care only if skilled care is already being provided. MediCal, which is California’s Medicaid program, serves the poor of any age.
Many of the chronically ill, disabled or elderly find themselves patching together coverage from multiple sources and, even then, coming up short.
Elliott Smart, director of Plumas County Social Services, offered the example of Richard (not his real name). After he graduated from high school, Richard went to work in a fruit cannery, eventually working his way up to an electrician’s assistant. He later owned a gas station, and finished his working life with a 22-year stint as an oil truck driver and oil depot manager.
He married his high school sweetheart and raised two children.
Richard’s last employer had a limited retirement plan, and he and his wife used the company insurance plan. They also had some modest savings.
Soon after Richard retired, his wife, Grace, became ill and required extensive care before she died. Much of the care was not covered by their insurance and soon their savings were gone.
At 60, Richard was not yet eligible for Medicare. He became ill with COPD (chronic obstructive pulmonary disease), diabetes and high blood pressure. His son is estranged from the family and his daughter lives in Texas, so family could not care for him. Eventually he required long-term care and was moved to a facility, where he is today, being paid for by MediCal.
“This is a very typical scenario that our agency deals with all the time,” Smart said.
Recent MediCal cuts that threaten to shut down Eastern Plumas Health Care’s skilled nursing facilities have made long-term care a front-page concern in Plumas County.
Plumas is not alone. Experts say that long-term care needs are a looming crisis across the state.
Two out of three adults over age 65 will need long-term care that includes personal assistance, such as bathing, eating or dressing, over a lengthy period, according to the California Department of Health Care Services (DHCS).
Although “long-term care” calls up images of nursing homes to most people, it can take many forms: part-time care from home health care agencies, adult day-care centers or assisted-living facilities. Public funding for all these services has been under attack in recent years as California struggles to balance its budget.
Few seniors will have the personal resources to pay for such care. The average cost of a one-year stay in a semi-private room in a California nursing home in 2011 is more than $91,000. The average length of stay is 2.4 years. That’s $219,000 in 2011 dollars. In-home care can be just as expensive.
According to a Field Poll in September, Californians are three times more knowledgeable about the costs of long-term care than at any time since polling began 17 years ago. Despite that greater awareness, less than 10 percent of California seniors have long-term care insurance policies to cover these expenses.
“With baby boomers just beginning to retire, we will soon see an unprecedented increase in people needing long-term care,” said Brenda Bufford, director of DHCS’ Partnership for Long-Term Care. “While it’s encouraging that Californians are better informed, the drop in preparation is concerning. This trend puts an entire generation’s long-term stability at risk.”
Poll respondents gave a number of reasons for not planning and preparing for long-term care possibilities, ranging from policies cost too much to the belief that family assets will cover the cost and family members will provide care. Only 6 percent thought that government programs would take care of them.
The Partnership for Long-Term Care has launched a public education effort at rureadyca.org to encourage Californians to plan ahead for long-term care needs.
But premiums for long-term care insurance remain out of reach for many working families. One in four Californians under the age of 65 does not have health insurance, much less coverage for long-term care.
“When you’re under the worst recession since the 1930s, that makes it hard to even think about long-term care,” Steven Wallace of the UCLA Center for Health Policy Research told the state Senate Subcommittee on Aging and Long-Term Care at a hearing last month.
“Long-term care insurance is often proposed as the solution to all of this, and that could not be farther from the truth,” Bonnie Burns, of California Health Advocates, a consumer advocacy group, told the subcommittee.
“You’re talking about a private, profit-making industry. That won’t take care of the people who need it the most,” she said. “You have to be young enough (less of a risk), you have to be wealthy enough to pay for it and you need to qualify. So if you have medical conditions, you’re not likely to get it.”
The California Department of Health Care Services, the same agency behind the recent MediCal cuts to skilled nursing facilities, has “partnered” with the commercial insurance industry to develop long-term care plans.
The department currently has about 115,000 active policies, with sign-ups growing at a rate of 10,000 a year, according to testimony at the subcommittee hearing.
Not just for seniors
While the possibility of long-term care is more urgent for seniors, younger people can find themselves in need, too.
Consider the story of Rebecca (Becky) Erickson, a skilled-nursing patient at Eastern Plumas Health Care’s facility in Portola. At just 46 years of age, she is looking at spending the rest of her life in a skilled-nursing facility.
Once a nurse herself, first at Sierra Valley Hospital in Loyalton and then at EPHC, she lost her job after being hospitalized for three months in 2010.
Erickson first fell ill in 2008 and was finally diagnosed in 2009 with an unusual disease called postural orthostatic tachycardia syndrome, or POTS. When she sits or stands, her blood pressure drops and her heart rate accelerates dangerously, so much so that she can pass out, fall and injure herself.
She also suffers from a gastrointestinal disorder and low blood potassium.
Erickson tried to manage her condition herself, but was being admitted to the emergency room and intensive care several times a month. Eventually she conceded that she needed 24-hour care and was admitted to the skilled nursing facility last February, where she remains.
“I spent my summers here as a child with my family, raised my children here and planned to live out my life here. I planned to continue to work at EPHC until retirement age, but that plan was unfortunately cut short due to my illness,” she said.
Erickson is among the 40 percent of long-term care patients who are working-age adults under the age of 64, according to the California Partnership for Long-Term Care.
Erickson’s only health insurance is through MediCal, which serves more than 7 million low-income California residents, about 20 percent of the state’s population.
Nowhere to go
Erickson is among the four plaintiffs from EPHC in the California Hospital Association’s (CHA) lawsuit challenging the legality of the recent MediCal cuts to skilled nursing facilities. Her declaration is part of the association’s request for a preliminary injunction to stop the cuts while the larger case is considered. A hearing on the injunction is set for Dec. 19.
The CHA argues that the cuts will lead to closures and compromise access to care for MediCal patients. The threat is particularly dire in rural communities, where there are few private or freestanding nursing facilities; there is just one in Plumas County, Country Villa in Quincy.
The cuts only affect facilities attached to hospitals, as is the case at EPHC and at Seneca Healthcare District in Chester. EPHC has 66 skilled-nursing beds, and Seneca has 16. Seneca is better positioned than EPHC to absorb the cuts because skilled nursing makes up less of its revenue and its overall financial position is stronger.
According to a CHA poll last May, 50 percent of California hospitals that have skilled-nursing facilities said such cuts would force them to close. An additional 35 percent indicated they would have to reduce the number of beds or stop serving MediCal patients.
EPHC is looking at reducing the number of beds at its skilled nursing facilities. Preparing for the worst, it has also filed a closure plan with the state. So far, EPHC has found just 21 beds for its 58 patients, should it come to that. Where the others will go is a big question mark.
The four plaintiffs, according to their court declarations, are terrified of losing their doctors, who are familiar with their medical histories and conditions, and the support of friends and family members.
Agnes and Gerald (Gerry) Gervais would have faced separation after 72 years of marriage, but Gerry died soon after the lawsuit was filed. Making his declaration was one of the last things he did in his life.
Erickson fears having to move in with her sister and family because “I will become a burden to them physically and financially.”
“I do not know where I will go,” said 86-year-old Inez Fagliano, another plaintiff.
Where will I go? That is a question more and more of us may be asking ourselves as aging baby boomers create greater demand for skilled nursing beds and those beds become harder to find and fewer facilities accept MediCal patients.