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December 2013 Policy Study, Number 13-12

   

Iowans Want to Age in Place

   

Introduction

   

 

By 2030, there will be a dramatic shift in age demographics across the U.S. population and in Iowa.[1] Simply put, our nation is aging at a dramatic rate, just as it grew at a dramatic rate between 1946 and 1964 with the birth of the “boomer” generation. Currently, Iowa is ranked number one for the highest percentage of population over age 85 in the United States and number four for population over age 50.[2] In fact, currently the largest population group in Iowa is age 40+, and represents 47.9 percent of our state’s population.[3] With about 10,000 per day aging into Medicare across the nation, Iowa’s Baby Boomers should push our population aged 40 and above to about 52 percent by the year 2030.[4] Iowa is an aging state and this trend will persist for the foreseeable future. The issue of how best to offer lower-cost health care with better health outcomes in the patient-preferred setting should be at the center of all aging and health care policy for years to come.

 

Baby Boomers, while generally expected to live longer as a cohort, also are expected to have two or more chronic illnesses to manage and are expected to retire with less savings than their predecessors – the Geezers.[5] This means that it may cost more to manage their various conditions and more are likely to qualify for both Medicare and Medicaid as a “dual eligible.” To make things worse, one-third of them will be obese, one-quarter will be diabetic, and one-half will have arthritis.[6] The care for this population will grow increasingly costly over time.

 

According to a 2004 study conducted and published by the American Association of Retired Persons (AARP), “63 percent [of Baby Boomers] feel they can count on Social Security as a source of income in retirement.”[7] The problem with this statistic is that Social Security only provides the average lifetime worker turned Social Security recipient about $15,000 in annual income,[8] placing them at about 128 percent of the federal poverty level and making them eligible for both Medicaid and Medicare-covered services.[9] This places an inordinate burden on the remaining workforce to provide for the health care of the majority of the Boomer generation.

 

Currently at 18 percent of gross domestic product (GDP) and expected to increase to 38 percent by 2030, this rate of health care spending and growth in health care spending crowds out other vital and constitutionally obligated federal expenditures.[10] In plain language – something’s gotta give! Our national budget should provide for services outlined in the Constitution and Amendments to it, such as national defense, courts, and law enforcement. And Congress has now voted to provide Social Security and health care. The more a government covers in one of these areas, the less it has to spend in another, and thus public policy needs to reflect a balanced approach to addressing this complex issue of a workable budget.

 

Even if the compression of morbidity increases and the rates of disability among older adults continue to decline, it is expected that a large number of this aging group will require LTSS at an even greater rate than at any time in the past. It has been established that care received in a nursing home or skilled nursing facility is very expensive; in fact, more expensive than similar care received in the home or community settings.[11] Once this increased demand for LTSS is factored in, it would be better for each of our individual states to work toward crafting comprehensive systems that provide LTSS that also allow older adults to remain in their homes as long as possible ― to “age in place,” regardless of their health status or age.

 

According to the Iowa Department on Aging, 93 percent of Iowans age 50 and over desire to “age in place” and receive care in their home.[12] An anecdotal finding of a recent project involving the evaluation of service lines of county public-health departments in Iowa has led the Author to believe that over 70 percent of Iowa’s county public-health departments are the chief providers of home and community-based services, both homemaker and skilled nursing, to rural elderly in Iowa.

 

With fewer retirees having saved in anticipation of retirement, combined with outliving the original time provisions of the meager provisions of Social Security, Medicaid has the potential to be the core of this health-care-payment system. Particularly key is that Medicaid provides each state numerous options of how to provide the less costly alternative of HCBS to patients who require them in the preferred and optimal setting for them.

 

Medicaid’s HCBS benefit has evolved over the past 42 years and covers a wide range of direct health and health-related services, personal-care services, social-and-supportive services, and even individual-patient supports. Patients can receive these services in a variety of settings including nursing homes, skilled-nursing facilities, and community settings as well as in the patients’ homes. The Medicaid entitlement program is needs-based and designed to aid individual states to cover the costs of essential health-care services for low-income and medically needy residents within their state. A plan to provide Medicaid is submitted by each state individually to, and approved by, the Centers for Medicare & Medicaid Services.[13] This approval then qualifies the state to receive matching funds from the federal level to pay for the services that their individual state Medicaid program designates. Variations among state Medicaid programs are due to broad flexibility in their ability to craft their programs within the specific federal provisions related to individual patient eligibility for coverage, types of services, method for program administration, and provider-compensation plans.

 

   

 

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