Press Room - 2008 NIC Press Releases
Nation's First Comprehensive Analysis of Major LTC Financing Research Now Available
Report to Provide Framework for Policymakers and Others Working
to Solve
How to Pay for Boomers’ Care Needs in 20-40 Years
FOR IMMEDIATE RELEASE: March 20, 2008
Contact: Renee Tilton, (410) 626-0805 or rtilton@crosbymarketing.com
Annapolis, Md. – The first comprehensive review and analysis of research on long-term care financing
for America’s elderly is now available, the National Investment Center for the Seniors Housing & Care
Industry (NIC) announced today. This major undertaking, conducted by RTI International for NIC, involved
compiling and analyzing all major studies and projection modeling to date on the issue.
The result – The NIC Compendium Project: A Guide to Long-Term Care Projection and Simulation Models
– is a body of knowledge that will help policymakers and others determine the best combination of public-
and private-sector funding that will be needed to pay for the nation’s growing care needs, especially
when Baby Boomers reach their 70s and 80s.
“In a short 20 years from now, our nation’s economy will face an enormous challenge,” said Robert G.
Kramer, President of NIC. “That is, how are we going to pay for the massive numbers of Baby Boomers
who will move through the long-term care system?”
“The real impact of long-term care needs won’t be felt until 2030-2050,” continued Kramer. “How much
will this care cost? How will the nation pay for it? And how can policymakers, seniors housing and care
industry leaders, researchers and other decision-makers agree on the best plan to meet those needs?
This Compendium will focus attention on the need for long-term care research and help stimulate
a policy debate at the national level.”
The lead author and head of the research team for the project was Joshua M. Wiener, Ph.D., Senior Fellow
and Program Director for Aging, Disability and Long-Term Care at RTI International. His past work includes
leading the development of the first long-term care financing micro-simulation model, a predecessor
to The Lewin Group’s Long-Term Care Financing Model. Marc P. Freiman, Ph.D., and David Brown are co-authors
of the report.
Wiener pointed out several significant findings from the research that formed the Compendium:
- The need for long-term care is a “normal” life experience. According to a study by Kemper, Komisar and
Alecxih (2005/2006) among those turning 65 now, nearly 70 percent will need some form of long-term
care before they die, and 20 percent will need it for more than five years. This includes
informal care, paid home care, nursing home care and assisted living facility care.
- The number of people with disabilities is likely to increase substantially, even if
disability rates fall. A recent study from Johnson, Toomey and Wiener (2007) projected that the number
of older people with disabilities will grow from 10 million in 2000 to between 15.1 million and 24.6
million in 2040. As such, policymakers cannot assume that declines in disability rates will solve the
problem of long-term care.
- The demand for long-term care services is likely to at least double by 2040. The same
Johnson, Toomey and Wiener study projected that the use of paid home care will increase from 2.2 million
people in 2000 to 3.9 million - 6.2 million in 2040, depending mostly on assumptions about disability
rates. During the same period, the number of older people using nursing care will increase from 1.2
million to 2 million - 3.1 million.
- The price of long-term care services will have a big impact on the level of expenditures.
A 1994 study from Wiener, Illston and Hanley found that total expenditures (in 1993 dollars) for older
people were projected to be $134 billion in 2018 if prices increased 4.5 percent annually; $215 billion,
if prices increased 6.5 percent annually.
- Despite problems with the pension system, the financial status of older people will improve
over time. One report, Knickman and Snell (2002) projected that the proportion of older people
who would be extremely likely to use Medicaid to pay for a significant period of long-term care would
decline from 45 percent in 2000 to 29 percent in 2030.
- Under the current system, most older people will not have private long-term care insurance in
the future. The Wiener, Illston and Hanley (1994) study projected that no more than 20 percent
of older people would have private long-term care insurance in 2018 because of its high cost.
The Compendium also pointed out limitations with current projection models. For example, they
do not address the substitutability of services, such as home care and assisted living facilities, for
nursing home care. There is also a lack of data on which to determine the impact of price changes on
the use of services or “price elasticity.” And younger people with disabilities are not included as
part of the projections, even though 22 percent of Medicaid nursing home expenditures in 2003 were for
people under age 65.
“This issue on how we will fund future long-term care has huge implications for the seniors housing
and care industry, and its leaders need to work closely with government and research communities to
craft on-going, relevant research, especially in those areas that have been lacking in previous studies,”
said Anthony J. Mullen, Senior Fellow for NIC, partner with Royal Star Properties, and one of the leading
researchers and analysts in the seniors housing and care industry. “In addition to full micro-simulation
models, stakeholders also need to develop simpler projection models that allow for easier input of ‘expert
opinion.’ And the results of government-funded projection models should be more publicly available.”
The Compendium is available for purchase for $75 in either an electronic or a print version.
For more information, visit
www.NIC.org or call (410) 267-0504.
About NIC
Founded in 1991, the National Investment Center for the Seniors Housing & Care Industry is a nonprofit
education and research organization providing information about business strategy and capital formation
for the senior living industry. NIC is the leading provider of historical and trend data on the industry
through its Key Financial Indicators™ (KFIs) that report nationwide statistics and its Market
Area Profiles (MAP™) Data and Analysis Service that tracks properties in the 100 largest metropolitan
areas. Proceeds from its annual conference are used to fund research on issues of importance to the
industry, including data useful to policymakers making decisions about seniors housing and long-term
care. For more information, visit www.NIC.org or call (410) 267-0504.
About RTI International
RTI International is one of the world’s leading research institutes with more than 2,600 individuals
working in 40 countries. For almost five decades, the organization’s efforts have earned national and
international recognition, and it has been credited with achieving major breakthroughs in scientific
and social research. A major focus of the Institute is healthcare, ranging from the discovery of life-saving
drugs to healthcare financing. RTI International has done research and policy analysis for the Centers
for Medicare & Medicaid, the Centers for Disease Control, the National Institutes of Health, the Administration
on Aging, the Office of the Assistant Secretary for Planning and Evaluation/U.S. Department of Health
and Human Services, the Robert Wood Johnson Foundation and AARP. RTI International is headquartered
in Research Triangle Park, N.C. For more information, visit www.rti.org
or call (866) RTI-1958.
Note to Editor: An audio recording from a press briefing on the Compendium Project
is available. For playback call-in information, please contact Renee Tilton at
rtilton@crosbymarketing.com or (410) 626-0805.
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