Long-term care enters the affordability debate
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Drug prices and insurance premiums are front and center in any discussion about health affordability. But another cost driver will only become more burdensome in the coming years: long-term care.
Why it matters: America's dysfunctional elder care system isn't ready for a flood of aging baby boomers with chronic illnesses and mobility issues, and the cost of hiring help to care for an elderly or sick person at home has been growing much faster than inflation.
- That's put much of the burden on family members who are also juggling jobs and child care.
- Working-class seniors may wind up draining their assets and entering institutional care to get help.
Driving the news: Senate Finance Committee Democrats this month issued a request for information on possible changes to coverage and financing — including whether to establish a new federal entitlement for long-term care.
- It notably asked for feedback on whether a Medicare for All system could replace the patchwork of taxes, subsidies and cost-sharing that now prop up coverage.
- While that kind of change would be a huge political lift in a divided government, the growing public acceptance of single-payer health care could make it a prominent part of Democrats' health agenda in the next Congress.
- Even more modest changes could reset a status quo that Democrats say is tilted toward institutional care and leaves many families defaulting to nursing homes, because it's all they qualify for through Medicaid.
What's inside: The committee's request for information asks whether Medicare could provide a universal home care benefit to replace current coverage that's largely limited to intermittent, medically necessary skilled services.
- Another option would be to make home care a mandatory Medicaid benefit across all 50 states and to eliminate enrollment caps and waiting lists.
What they're saying: "Senate Democrats are determined to deliver an equitable and affordable home care guarantee for all Americans in need, improve the quality of long-term care across the board, and make sure there are workers in good jobs to meet that need," said Senate Finance ranking Democrat Ron Wyden of Oregon.
- Megan O'Reilly, vice president of government affairs for health at AARP — which hasn't weighed in on the Democrats' request — said older adults tell her organization that they want to stay in their homes as they age, which also costs less than nursing homes.
- "Helping people stay there is good for families and good for taxpayers. That's why we're working to advance policies that give more people that choice," she said.
Reality check: The Democrats have not settled the key question of how to finance changes or design the benefit.
- Providing everyone with a home care benefit also wouldn't guarantee there are enough caregivers to deliver it. And paying direct-care workers more would certainly drive up the price tag.
Between the lines: Past efforts to find a long-term care fix have foundered over the cost, whether it should be directed only at the neediest families and whether people could opt out.
- But the problem isn't going away, with the cost of nursing home and adult day care services beyond what many people can afford, while affordability pressures cut across different care settings.
- Home care costs can be more than twice an average retiree's Social Security benefits.
- Medicaid covers long-term nursing facility care and home-based services for people with limited income and assets, but eligibility and benefits vary by state, and waiting lists for care are common.
- Policymakers in recent years have passed short-term benefit and funding expansions without giving many families a safety net for high or prolonged costs.
What we're watching: The evolving long-term care conversation could boost some narrower bipartisan proposals to offer tax credits for working family caregivers, as well as a reauthorization of the Older Americans Act.
- The Centers for Medicare and Medicaid Services is also testing a model that supports caregivers of dementia patients with training and respite services up to $2,500 annually.
- Americans may have more appetite for a long-term care system if it's framed as social insurance and not a new welfare program or open-ended tax-financed benefit, according to a new Brookings Institution study that notes public skepticism about the likelihood of a fix.
- "Americans believe government should play a larger role in paying for long-term care, but far fewer expect government to do so. ... The result is a form of shared pessimism: Americans recognize the problem, but many doubt that the state will provide a durable solution," the authors wrote.
