According to the U.S. Department of Health and Human Services, 52 percent of those turning 65 now will need long-term care services and supports during their lifetimes. Unfortunately, according to the AARP, “The cost of long-term services and supports over time continues to be much higher than what middle-income families can afford.”

How much does it cost? A recent report by the Bipartisan Policy Center, or BPC, the estimated lifetime cost of long-term care supports and services for today’s 65-year-olds is $138,000 for men and $182,000 for women. The median annual cost of a nursing home is $91,300. A home health aide costs less, but it’s still a huge yearly average cost: $45,800.

More than 12 million American adults are already relying on long-term care services and supports, says the BPC report, “and the need is expected to rise dramatically in the coming decades.”

Unfortunately, around 57 percent of Americans are expecting Medicare to pay for their care, and it doesn’t, according to Next Avenue, a journalism service aimed at older people produced by Twin Cities Public Television. Their best shot may be Medicaid, but people only qualify for Medicaid once they reach poverty. (Note: Good estate planning can protect some assets from a Medicaid spend-down.)

The reality is, only 11 percent of Americans age 65 and up have a long-term care insurance policy. Moreover, the market is declining.

What laws or policies could be implemented to ensure that more Americans receive the care they need when the time comes?

Employer offerings, changes to Medicaid and Medigap could help

According to the BPC report, adopting a few policies into American life could result in 8.5 million U.S. adults aged 45 to 69 to have at least a bare-bones long-term care plan:

  • Incentivize employers to offer affordable long-term care insurance as an employee benefit for employees 45 years and older. The BPC estimates that doing so would reduce some annual premiums from $2,400 to around $600.
  • Let employees pay for these benefits by withdrawing money from their 401(k) plans without incurring federal taxes or penalties.
  • Allow Medicare Advantage plans and the like to provide up to two weeks a year of respite care to high-need, cost-intensive Medicare beneficiaries, under specific conditions, who have family-centered care plans.
  • Allow Medicare Advantage and Medigap to sell limited long-term care coverage as a voluntary benefit or a separate policy for those beneficiaries who choose to enroll. These would be affordable plans with lower benefit levels.
  • Allow state or federal health insurance marketplaces to sell inexpensive, limited-benefit long-term care policies.