Federal Commission on Long-Term Care Holds its Inaugural Hearing

On June 27, Steve Postal, director of the Medicaid Resource Center for the National Council on Medicaid Home Care (the Council), a NAHC affiliate, attended the Federal Commission on Long-Term Care’s inaugural hearing entitled: “The Current System for Providing Long-Term Services and Supports (LTSS).”  The following members of the Commission were in attendance:

Chris Jacobs, George Vradenburg, Stephen Guillard, Carol Rafael, Lawrence Atkins (Staff Director), Bruce Chernof (Chair), Mark Warshawsky (Co-Chair), Henry Claypool, Neil Pruitt, Judith (Judy) Feder, Javaid Anwar, Grace-Marie Turner, and Judith (Judy) Brachman.

For brief bios on the members of the Commission, please click here and here.

The hearing gave the Medicaid Council, as well as other interested parties, a synopsis of current and projected trends in LTSS, reaffirming The Council’s belief that it will continue to migrate towards home and community-based services (HCBS), and that Medicaid will be its primary payor.

The hearing featured four witnesses:

• Anne Timlinson, Senior Vice President, Avalere Health
• Kirsten Colello, Specialist in Health and Aging Policy, Congressional Research Service
• G. William Hoagland, Senior Vice President, Bipartisan Policy Center
• Marc Cohen, Chief Research and Development Officer, LifePlans, Inc.

Bruce Chernof, the chair of the Commission, called the meeting to order.  He gave introductory remarks, stating that this was the initial meeting of the Commission, which was three days old.  Mr. Chernof mentioned that the purpose of the Commission was to learn about the current long term care (LTC) system, and to think about how to restructure the LTC system, given the aging population and fiscal considerations.  He also stated that the Commission has a very short timeline - i.e. 6 months from when its members were appointed - to complete their objective. 

The Commission will send its recommendations to Congress by the end of September.

Anne Timlinson’s presentation was entitled “The Diversity of the Long Term Care Population: Understanding the Need.” She discussed that the LTC population is quite diverse, but had a common need in substantial assistance with activities of daily living (ADL). She stated that the need varies if comparing different age groups, precipitating events/conditions, and places of residence. 

In 2007, there were 11.1 million people with LTC needs. Of those, 9.6 million lived in the community, while 1.5 million lived in nursing homes. Of those living in the community, 4.7 million were under 65, while 4.9 million were 65 or older. 

Those needing LTC aged 65 or older tend to be very old, female, have low incomes, and have lots of needs. Those needing LTC aged under 65 tend not to be defined so much by gender, and if anything, they would tend to be male.  The latter group also tends to be unmarried and have low incomes.  Also, the 65 or older LTC group tends to have cognitive impairments, while those under 65 tend to have developmental disabilities. 

Anne also mentioned that the size of the LTC population is expected to rise by 70%. There were 9.8 million LTC users in 2010, and the population is projected to be 10.5 million in 2020, 12.1 million in 2030, 14.6 million in 2040, and 16.5 million by 2050.

Kirsten Colello discussed the financing of LTSS in her presentation entitled: “Long Term Services and Supports.”  The LTSS expenditure breakdown in 2011, by payor, was $133.5 billion (42%) Medicaid, $73.5 billion (23.8%) Medicare, and $22.1 billion (7.0%) other public sources. The total public expense was $230.9 billion (72.8%) in 2011. Also in 2011, total home care expenditures came to $104.8 billion, with $67.6 coming from Medicaid, $35.0 coming from Medicare, and $2.3 coming from other public sources. 

Ms. Colello also stated that the proportion of Medicaid LTSS by setting has shifted dramatically from the institution to home and community based services (HCBS); in 1995, only 20.8% was HCBS, but by 2011, it was 50.6%. Kristen also discussed the HCBS programs available to states, including state plans (1915(i)) and waivers such as the 1915(c), 1915(j) and 1115 waivers.

G. William Hoagland’s presentation was entitled: “The Federal Budget Environment for Long Term Health Care.”  He discussed the current fiscal outlook, near term restraints on costs, and rough estimates of long term care costs in the future. He presented slides on the total budget surplus/deficit for FY 1965-2022, and the budget outlook for FY 2012 to 2018, emphasizing the accumulation of debt held by the public is projected to be over 70% of GDP for FY 2012 to 2018. 

Mr. Hoagland projects that in 2023, federal spending for Medicaid will be 10 percent of the total budget. Mr. Hoagland also presented that Medicare and Medicaid as a source of funds for long-term health expenditures have increased from 25% of these expenditures in 1970 to 68% in 2020.  He concluded two things:

1) Medicare and Medicaid are a major force in health care, but they cannot be expected to be consumed at a sustained pace; and

2) once these programs become available, Medicare and Medicaid pay for the most expensive long term care.

Marc Cohen’s presentation was entitled “The Current State of the Private Long Term Care Insurance Industry.”  He stated that the individual and group markets for private long-term care insurance (LTCI) totals 7 million people who pay about $10 billion in premiums. However, the number of insured has remained flat since around 2005.  While traditionally just coverage for nursing home care, LTCI now provides coverage for a wide variety of services, including nursing home, assisted living, and home care services. 

Of the people surveyed in 2010 as to why they don’t buy LTCI, 61% said because it was too costly.  Mr. Cohen also mentioned that there are partnership programs in 45 states, where purchasers of LTCI can access Medicaid without spending down their assets.

The individual testimonies were followed by a question and answer session. Most of the questions concerned private insurance and were directed to Mr. Cohen.

Ms. Feder asked Ms. Collelo about if she can clarify the variation of practices across states regarding Medicaid coverage. Ms. Collelo replied that in addition to some states being required to offer HCBS in their state plans, most HCBS are optional, through waivers. She stated that there are over 300 1915(c) HCBS waiver programs in the nation, and that some states are using 7-8 waivers.  In this way, they are able to target specific populations while controlling costs by limiting eligibility criteria, geographic application, and enrollment generally.    

Conclusion

The witnesses’ presentations and discussions confirmed Council analysis that LTSS continues to shift away from the institutional setting and towards HCBS. Medicaid continues to be the largest payor of LTSS, especially as states continue to leverage their state plans and HCBS waivers to provide customized LTSS to specific populations at less cost.

The shifts in LTSS financing will give home care providers rebalancing opportunities, as a stronger emphasis is placed on community based systems over institutional settings.  Home care providers should continue to keep abreast of the state plan and HCBS waivers in their state, and to contact the Council with any questions or concerns.  

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