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54 ASK THE EXPERT
members. Often, this is insufficient to cover productivity due to absenteeism alone. In ad-
the costs and many people have to turn to dition, they state that “costs of turnover and
Medicaid for help. The overall spending on schedule adjustments for caregiving workers
LTSS is expected to double by 2050, which add an additional $17.7 billion in costs.”
will cause even more people to depend on THE COLLABORATIVE’S
Medicaid to pay for it. RECOMMENDATIONS
Few people have saved sufficiently for The Collaborative was able to agree to five
LTSS. In fact, the Collaborative reports that key recommendations in three key areas.
a typical American between the ages of 65 This final set of recommendations focused
and 74 has financial assets of $95,000 and significantly on: 1) A need for universal
about $81,000 in home equity. This does not catastrophic insurance; 2) Private market
include retirement savings, which vary widely initiatives and public policies to revitalize the
across the country. To pay for one’s lifetime insurance market to help address non-cata-
medical expenses with a 90% certainty strophic LTSS risk; and 3) Enhanced Medicaid
requires savings of about $130,000 and an LTSS for those with lower lifetime incomes.
additional $69,500 for LTSS costs. With this The Collaborative calls for a strong govern-
in mind, it is easy to see how people are run- ment role in the solution. The group con-
ning out of money.
sidered voluntary and universal insurance
Over all, individuals pay for about 55% of programs and came to the conclusion that
LTSS expenditures; Medicaid pays about universal was the only viable, long-term
37%; and Private LTSS insurance pays for solution as it spread the risk across the
less than 5%. entire population and avoided challenges of
Cost to Family and Friends: adverse selection. The Collaborative noted in
In addition to the financial stress this places the report, “As a result, universal insurance
on the elderly and disabled, it also signifi- appears to offer broad-based insurance at a
cantly affects their families. The Collaborative comparatively low lifetime cost.”
estimates that in 2013, family and friends In addition to recommending universal cata-
provided 37 billion hours of uncompensated strophic insurance, the Collaborative also rec-
LTSS to adults. This care calculates to up to ommended taking some actions to revitalize
$470 billion, which is three times the amount the private insurance market. These included
Medicaid spent on LTSS the same year. suggestions of employers offering long-term
care insurance as part of their benefits pack-
When family members provide caregiving
to a loved one, it often comes at the cost of ages. In addition, the group suggests that
their job or a portion of their job. On average, regulatory changes in the insurance industry,
the Collaborative reports, a woman in her creating more standardization in policies,
50s who leaves a job to care for her aging would save costs to consumers. The specifics
parents does so at a cost of $300,000 of of the regulatory change suggestions include
income over her lifetime. The Collaborative increasing premiums and benefits as the in-
states that “unpaid family caregivers lose an dividual ages. There is also a suggestion that
estimated $3 trillion in lost lifetime wages this type of insurance be sold in conjunction
and benefits.” with Medicare supplemental programs.
Cost to Employers of Family and Friends: Finally, the group suggests that policymakers
The Collaborative reports that employers continue to encourage and support efforts
experience a loss of $17.1 to $33 billion in by the insurance industry to experiment with