Any discussion of expenditures for LTC services (specifically, the issue of who pays) must begin with the fact that the majority of this care is provided by informal providers—family, friends, church members, voluntary groups, and others. It is difficult to assess the magnitude or the “costs” of this informal care, precisely because it is typically not provided on a fee basis and is uncounted. However, most experts agree it is substantial. Some authorities estimate that 70 percent of disabled elders rely exclusively on help from spouses, children, or other informal sources (Liu et al., 1985). The burden and indirect cost of this informal care falls heavily on women: 75 percent of informal caregivers are women, and many of them are elderly themselves (Pepper Commission, 1990; England et al., 1991). Caregivers, employers, and society all experience costs associated with informal caregiving, from foregone income to lost productivity to tax revenues not collected.

Nursing facility care consumes the bulk of current spending and projected spending on LTC, despite the preference of most elderly to remain in their own homes. Of the roughly $60 billion spent on nursing facility care in 1991, Medicaid paid more than $28 billion, nursing facility residents and their families paid nearly $26 billion, Medicare paid nearly $3 billion, and other private sources (including private insurance) and government programs paid more than $2 billion. In contrast, only about $10 billion was spent on home care in 1991. Medicare paid $4.4 billion; Medicaid paid $1.4 billion; state and local governments contributed $1.3 billion; and funds from private health insurance and other private sources, including money paid directly by LTC consumers and their families, totaled $2.6 billion. Other federal programs, such as those funded through the Older Americans Act (OAA) and the Social Services Block Grant program, contributed about $1.2 billion (FY 1993) and $588 million (FY 1991), respectively, for services to older people (AARP, 1994b).

The exact costs associated with B&C are almost impossible to estimate, although it can be assumed to be less than either nursing facility or home- and community-based care since there are fewer residents living in these types of facilities. Often the cost of care in these facilities is paid directly by consumers and their families as part of their rent, rather than by third-party payers such as Medicare. A study by the U.S. House of Representatives, Select Committee on Aging (1989) estimated that about half of elderly B&C residents pay for their care solely with private resources. It is known that a number of B&C residents receive Supplemental Security Income (SSI), a federal/state income supplement for poor elderly and disabled individuals. Some states provide SSI supplements for services in B&C homes (Hawes et al., 1993). Accordingly, some B&C homes are quite expensive and cater to

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