A lifetime perspective or proposals for financing nursing home care

In this paper data from the National Mortality Followback Survey and the National Nursing Home Survey are used to estimate the lifetime cost of nursing home care. The expected discounted cost for persons turning 65 in 1990 is $27,600. However, variation around this average is high. The 9% of persons expected to use at least 5 years of nursing home care will account for 64% of aggregate cost for the cohort; the 68% using less than 3 months of care will account for only about 1% of cost. The percentage of costs covered under alternative financing strategies also varies widely. An entitlement covering the first 3 months of care subject to 30% coinsurance would cover 5% of aggregate cost; an entitlement with a 2-year deductible and the same coinsurance would cover 41% of cost.