To estimate home much paid home could possibly be purchased out of income and wealth, we estimated the share of older adults with sufficient monthly income to cover median home care costs as well as other living expenses. Our results show that many older adults with severe LTSS needs could not afford 2 years of paid home care without financial assistance. Although about two-thirds of all adults ages 65 and older not on Medicaid could fund at least 2 years of paid home care using only their income and easily liquated financial assets, only about one-half of those with severe LTSS needs have enough savings to cover paid home care for that long. About 75% of all older adults not on Medicaid could fund at least 2 years of paid home care if they liquidated all their assets, including cars and businesses but not their home equity, and spent that wealth on LTSS. However, only slightly more than one-half of those with severe LTSS needs could cover 2 years of paid home care with their own resources even if they liquidated all their available assets. Four out of 10 older adults not on Medicaid could pay for home care indefinitely because they could fund care out of their income without dipping into their savings, but only about 2 out of 10 of those with severe LTSS needs could fund paid home care with their income alone.
This report was prepared under contract #HHSP23320100025W1 between the U.S. Department of Health and Human Services (HHS), Office of Disability, Aging and Long-Term Care Policy (DALTCP) and the Urban Institute. For additional information about this subject, you can visit the DALTCP home page at http://aspe.hhs.gov/office-disability-aging-and-long-term-care-policy-daltcp or contact the ASPE Project Officers, John Drabek and Pamela Doty, at HHS/ASPE/DALTCP, Room 424E, H.H. Humphrey Building, 200 Independence Avenue, S.W., Washington, D.C. 20201; John.Drabek@hhs.gov, Pamela.Doty@hhs.gov.
DISCLAIMER: The opinions and views expressed in this report are those of the authors. They do not reflect the views of the Department of Health and Human Services, the contractor or any other funding organization. This report was completed and submitted on April 2017.