Disabled Elders' Out-of-Pocket Home Care Expenses: Examining Financial Burden

Providing quality, long-term care to older Americans at costs that are less financially burdensome than current levels continues to challenge elders, their family members, and society. Decision makers are struggling to address this goal within the context of people living longer after the onset of chronic disease and disability, the aging of the baby boomers, and a dramatic growth in the number of individuals 85 years and older or those most at risk of needing long-term care (U.S. General Accounting Office 1995). Elders and their family members are struggling to understand their exposure to catastrophic long-term care costs and how to best protect themselves (Burwell and Crown 1996). Elders in need of long-term care are facing the daily reality of how to pay for care with existing private and public resources. As long-term and other acute health care costs continue to rise, understanding the financial burden of specific health care service costs for major payers will become increasingly important. This is especially true for home care as one means to help individuals with routine and often repetitive tasks of daily living. Home care services can range from social (homemaker/chore assistance, aid with bathing and toileting) to health related services (nursing and nurses aides, monitoring of medication). Home health care is the fastest growing component of personal health care (Freeman 1995). One reason for the growth in home care is cost containment efforts as home care typically costs less than providing the same care in a hospital or skilled nursing facility (Freeman. 1995; U.S. General Accounting Office 1994). Shifting long-term care from nursing facilities to home and community-based settings continues to be a focus of state efforts to contain Medicaid expenditures (U.S. General Accounting Office 1994, 1997). Home care services have also grown in response to the preferences of elders and their family members (Dey 1996; Rowland and Lyons 1991). Understanding the financial cost for consumers as a major payer of home care is essential if total costs and cost-shifting are to be examined. Current gaps in public and private insurance programs increase the risk home care will be paid for out-of-pocket by elders and may become financially burdensome (Feder 1991; Rowland and Lyons 1991; Zedlewski and McBride 1992). However, little is actually known about home care as a financial burden for households. A majority of research on the financial burden of long-term care has focused on nursing home care or other types of acute and long-term care costs as opposed to home care (Coughlin, Liu, and McBride 1992; Feder, Moon, and Scanlon 1987 Rice 1989; Rice and Gabel 1986; Rubin, Koelin, and Speas 1995). Few studies have examined home care costs of elders alone or as a portion of total out-of-pocket health care expenditures (Liu, Manton, and Liu 1985; Liu, Perozek, and Manton 1993). In this study, the extent of financial burden home care presents for chronically disabled elders who are users of home care is examined. Chronically disabled elders are the subgroup of elderly persons at risk Of needing long-term care (U.S. General Accounting Office 1995). Empirical information is essential to help inform policymakers about the proportion and characteristics of elders at risk of incurring financial burden as a result of using home care services. Decisions about coverage of home care services by public and private insurance programs should be influenced by understanding the financial burden of home care in relationship to other types of acute and long-term care services. Previous policy efforts to address catastrophic costs of elders, such as the 1988 Medicare Catastrophic Coverage Act (MCCA), have been criticized for lack of attention to the types of health care costs that elders view as "catastrophic" and appropriate for universal protection (Aaronson, Zinn, and Rosko 1994; Liu, Perozek, and Manton 1993). An additional purpose of this study is to encourage researchers and decision makers to critically examine how health care financial burden could be better and more thoroughly understood for an elderly population. …