Nearly 30% of long-term care costs are paid for out-of-pocket, according to research by Avalere Health, far higher than the 10% widely estimated previously. One of the reasons for the discrepancy, according to the public policy and research firm, is that Avalere has included assisted living costs.

In 2006, American families spent an estimated $64 billion on long-term care on top of the $16 billion in insurance that was paid out for such care. On top of this, families and communities took care of their elderly at an estimated $350 billion cost.

To finance care of the elderly, seniors and their families relied on home equity, income and retirement savings. But with the values of all of these sources diminishing at a time when long-term care costs are rising along with senior citizens population, the country is headed toward a potential crisis in the proper care of its elderly.

“As we enter serious health reform discussions, we must recognize the extent to which the system is held together by private financing and family contributions,” said Anne Tumlinson, a researcher with Avalere. “Reform efforts will need to take a comprehensive look at how care is currently financed and incorporate creative ways to support the growing needs of senior care.”

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