LTC Cost Increases Abated In 2008

Increases in nursing home care prices fell to 4% in 2008, from 4.7% in 2007, and that also contributed to the deceleration, the researchers report.

Meanwhile, public spending for nursing home services grew slightly faster than the year before because of increased growth in Medicaid nursing home spending. Medicaid, which accounted for 41% of total nursing home spending in 2008, saw spending on that item grow 2.6% in 2008, after growing just 2.6% in 2007 and 1.5% in 2006.

The analysts are attributing the shifts largely to the Deficit Reduction Act of 2005, which changed citizenship documentation requirements and tightened Medicaid nursing home eligibility criteria by lengthening the look-back period used to calculate recipients' assets.

Home health care accounted for about $65 billion in spending in 2008, with the rate of increase falling to 9% in 2007, from about 12% in 2007. The rate of growth slowed largely because of slower growth in home health prices and in the use and intensity of services, according to the analysts.