Urban Institute Study Advances Analysis of Federal Long-Term Care Program Models
December 10, 2015 01:54 PM
The Urban Institute recently released a study analyzing several different models for financing long-term services and supports (LTSS) in order to meet the country’s growing need for long-term care services. The Urban Institute estimates that between 2015 and 2055, the number of older Americans with “severe LTSS needs will increase 140 percent” to a total of 15.1 million. Private insurance is not a realistic option for all income levels due to high premiums. Federal programs are also inadequate; Medicare does not cover LTSS, and while federal Medicaid provides funding to states, state eligibility requirements limit the program to individuals with disabilities and those with little financial resources.
“Because private insurance is not widespread and public financing is available only for people who have few financial resources or who have already spent nearly all of their resources, older adults with severe LTSS needs will pay about half of their expenses out of pocket,” the Urban Institute stated. “These expenses impose financial burdens on many older adults with LTSS needs.” The report states that, in addition to burdening individuals, the current lack of LTSS resources also burdens caregivers with financial and emotional stress, as well as Medicare with increased costs by forcing people into hospitalizations and other care that would have been avoidable with adequate LTSS assistance.
To analyze policy options to address the problem, the Urban Institute modeled several programmatic options and compared the results. While the report acknowledged that as many as half of those with LTSS needs are under 65, it only applied the model to those 65 and older due to the fact that the “underlying data that go into the model are available only for older adults.” Following is a description of the policy simulations included in the model:
….a program with a front-end benefit that begins after a ninety-day waiting period and covers a maximum of two years of need, a catastrophic-only or back-end program that begins after a waiting period of two years but provides a lifetime benefit thereafter, and a comprehensive program that begins after a ninety-day waiting period and provides a lifetime benefit. Each option was modeled as voluntary insurance and as a universal mandatory program for workers. For the voluntary options, we included subsidized and unsubsidized versions.
The results of the study found that a mandatory option would be more successful than a voluntary option in terms of increasing coverage, and that the comprehensive and back-end mandatory options would be most beneficial for reducing Medicaid costs. The Urban Institute’s full report, “Financing Long-Term Services And Supports: Options Reflect Trade-Offs for Older Americans And Federal Spending,” is available here.
In its 2015 Legislative Blueprint, the National Association for Home Care & Hospice (NAHC) states that “the federal government must take the lead in providing adequate coverage of long-term care needs for the physically disabled, chronically and terminally ill, and cognitively impaired,” including those under the age of 65. NAHC further states that the “already significant need will continue to grow substantially, as the baby boom population ages and new technologies emerge that enable people with disabilities to live longer.” NAHC outlines in detail its recommended provisions for inclusion in a federal long-term care program here.
The Affordable Care Act included a long-term care program that centered around an insurance-type model. It was termed the CLASS Act. However, that program was suspended in 2011 amid concerns about its financial viability. A presidential commission on long-term care that followed the CLASS program suspension found a growing need for supports, but did not reach a consensus on the appropriate solutions. The Urban Institute’s report advances the analysis of potential solutions. It is hoped that the health care reform agenda in 2016 will include a significant focus on long-term care. NAHC is working to keep the issue on the front burner, including efforts to make it an issue for the 2016 presidential campaign.