The empirical findings discussed here present an examination of the ability of two high risk groups--the elderly and those currently with some degree of impairment--to finance long term health care needs. The various results remain pieces to the puzzle that need to be combined to form a more coherent framework. A number of additional contributions are needed before it will be possible to determine precisely what proportion of these families could feasibly support all or part of a period of disability.
The various disparate components of this determination ought to be evaluated for each individual rather than making comparisons across averages by income class or age. For example, although wages account for some percentage of the income of a household of given size, age, and income class, the distribution within that cell is important. A few workers who rely heavily on earned income generally account for the average. If wages are subtracted on an individual basis, the reduction would indicate that for example, a few of the elderly in that income class would be unable to contribute to costs of care, but that available discretionary resource levels for non-workers would be higher than indicated by the overall average. Thus, the number of potential contributors will be affected.
An issue not discussed here in any detail is the interrelationship between current public programs and families' private resources. The level of savings and the participation of family members in the labor force are just two examples of behavior likely to be influenced by participation--or the "insurance value" of potential participation--in these programs. Thus, a study which seeks to assess ability to privately finance long term care cannot ignore the existence of public sources of support and their long term impact on individual behavior. For example, although Medicare covers costs of institutionalization only for acute cases and only for specific medical expenses for home-based care, it nonetheless reduces an individual's obligations for acute medical expenses. Resources that might otherwise be required for medical insurance can be used for long term care needs. Similarly, Medicaid participants will have a broad range of medical services covered, enhancing an individual's ability to finance non-covered services such as homemaker or other home-based social services to supplement long term medical care needs. Consideration of these factors is important in comparing the elderly to younger families and families above and below poverty level income.
The attempt to measure discretionary income ought to be expanded to measure discretionary resources--the amount of final resources available after necessary expenditures are excluded. Food and housing expenditures--as well as tax outlays--ought to be compared with resource levels. Such an analysis, however, requires data manipulation to combine existing surveys that is beyond the scope of this paper.