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Aging and the Public Long-Term-Care System

Executive Summary

Date: September 28th, 2012

New Hampshire’s aging population is a well-documented phenomenon. This demographic trend will reshape numerous state organizations, agencies and service providers. In this paper, we reviewed the degree to which an aging population could potentially affect state spending, with a focus on the public long-term-care system and its goal of helping elderly New Hampshire citizens live in their communities, not in institution-based settings.

Our major findings include the following:

Demand for long-term-care services will increase. New Hampshire is aging and aging more quickly than the rest of the country. If we assume that elderly New Hampshire residents eligible for the state’s Medicaid program in 2020 will use services at the same rate as the elderly did in 2011, the number of individuals participating in the program will increase rapidly, increasing slightly more than 30 percent over the next 10 years. These trends will put pressure on the state to reevaluate the existing moratorium on the construction of nursing homes, as well as budgetary limits on home-and-community-based care services.

Long-term-care spending will rise steadily. Our simulations clearly demonstrated that the impact of aging alone – assuming no change in the underlying service mix being provided – would result in 4 percent annual increases in spending over the next 10 years, and slightly more than 7 percent including an inflation factor for cost of business increases. This far exceeds historic growth in revenues and raises questions about the financial sustainability of the long-term-care system. While New Hampshire’s counties now have financial responsibility for the long-term-care system, county financial exposure is capped, leaving the state at risk for significant increases in spending.

Focus on home-and-community-based care – Simulations of the expansions of the home and community based care system continue to suggest savings relative to growth in nursing home service use. However, these savings assume that the money invested in home-and-community-based services in the recent past are sufficient to help keep a potentially smaller, but more acutely frail, population living in the community. More work is needed in this area.

Planning for an aging New Hampshire is far from finished. Many agencies have responsibility for serving the elderly in one form or another – the Bureau of Elderly and Adult Services, Division of Family Assistance, the Housing Finance Authority, Legal Services, among others. With varying levels of sophistication and detail, each of these has data and, occasionally, strategic plans which identify priorities given an aging population. However, there does not appear to be a comprehensive assessment of how the various public sector services are, or should be, integrated.

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