Long-Term Care Proposal Finally Gets Legs in Congress

While most of the debate over healthcare reform focuses on the public option, a giant elephant in the room-long-term care-continues to be largely ignored. Responsible for about 35 percent of Medicaid spending, and a huge burden on the states, long-term care costs are expected to rise sharply with the number of elderly people. Few people have long-term care insurance, although it has been estimated that the average nursing-home stay of 2 ½ years costs $200,000. Much of the expense falls on Medicaid programs, which are in dire straits because of the drop in state tax revenues.

The only provisions related to long-term care in the current reform bills are found in the Senate Finance Committee measure. The bill would offer incentives to states to emphasize home care and community-based services as an alternative to nursing homes, which now soak up nearly 70 percent of Medicaid spending on long-term care. There are also provisions to encourage geriatric care training and protect seniors from abuse in nursing homes, as well as $52.5 million to help long-term care facilities install electronic health records. But none of this would even begin to address the human and financial challenges of long-term care.

A bill called the Community Living Services and Support (CLASS) Act, which would create a government insurance program for long-term care, has been floating around in Congress for a while, but has not gotten very far yet. One reason might be that the $75 per day that the insurance would pay is only about a third of what a nursing home costs.

Suddenly, however, Congress is starting to take an interest in this proposal, for a reason that has nothing to do with the long-term-care crisis. Under the proposal, people who join the government-sponsored insurance program would start paying premiums right away, but no benefits would be paid before 2016. Consequently, it is estimated that adoption of the measure would generate an extra $60 billion over the next 10 years to help fund healthcare reform.

I know that lawmakers are desperate to find cash to pay for coverage expansion, but is this the way to go about it? Why not jack up Medicare taxes for people under 65, most of whom won’t be eligible for Medicare for many years? In the category of robbing Peter to pay Paul, this may qualify for the Guinness Book of World Records.

Long-term care is a problem facing all countries, and nobody has fully worked out the answer. Long-term care is guaranteed to all in Canada, regardless of ability to pay. In Holland, long-term-care insurance is mandatory. In Germany and the U.K. (which has a single payer system), individuals are forced to rely mostly on their own resources as long as they have any. But, whatever the challenges, no healthcare reform effort can be complete without addressing this major component of the healthcare system.