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The continuum of care that supports older Americans is at a crossroads. The major policy initiatives framing financing and system design in both the public and private sectors are approximately 50 years old and were designed for a very different time and population. When the Medicare and Medicaid programs became law in 1965, the average life expectancy in the United States was 70 years (Figure 76–1), and most hospitals did not have technologies to significantly prolong life following a life-threatening incident.

Figure 76–1.

Causes of death and life expectancy, 1910–2010. (Adapted from the National Center for Health Statistics, Centers for Disease Control and Prevention. Leading Causes of Death, 1900–1998. Available at:; and Murphy S, Xu J, Kochanek K. Deaths: preliminary data for 2010. Natl Vital Stat Rep. 2012;60(4):1-52.)

Over the course of the twentieth century, particularly in the last 25 years, the United States has experienced a dramatic increase in life expectancy, largely as a result of far more sophisticated medical interventions and treatments. Even though social policy has evolved over this period, the primary focus has been on incremental changes to the policy backbone built decades ago: Social Security, Medicare, and Medicaid. These programs now encompass services, such as dialysis and transplantations, or use delivery system approaches, such as managed care. Yet these programs have not changed substantially to meet the dramatic and different needs of current and future older adults.

Three Spheres of Aging with Dignity and Independence

What are the needs that all adults will face as they age? These needs can be categorized into 3 spheres of security: income, health, and functional (Figure 76–2). Public policy has historically focused on 2 of these 3 spheres: (a) health security through Medicare, Medicaid, and other insurance; and (b) income security through Social Security, defined retirement benefits, and savings programs such as 401Ks. Functional security, or those programs that support people in daily living who have functional challenges, is the sphere with the least-developed policy architecture. The increasing need for this type of security is a consequence of individuals living longer with more chronic illness and functional limitation than in any other previous period.

Figure 76–2.

Three spheres of security.

Most adults are simply not prepared for these substantial needs as they grow older, and often rely on the 2 spheres of income and health security to address them. Seventy percent of Americans who reach the age of 65 years will need some form of long-term services and supports (LTSS) in their lives for an average of 3 years. Most individuals desire to receive these services in their homes and communities rather than in an institution, such as a nursing home. The “oldest old,” or those age 85 years and ...

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