baby boomers swell the ranks of elderly Americans, we’re
nowhere near a solution to providing the long-term care
services many of them will need.
at the Urban Institute have been examining the spending
tradeoffs between two public long-term care insurance
programs: a catastrophic plan and a short-term plan that would
pay benefits up front. Both would be financed through a
payroll tax. They also explored how differences in the timing
of payouts would affect consumer and government spending.
you use those resources to assist people who might be able to
take care of themselves, or do you use it to help people who
couldn’t realistically be expected to take care of
themselves?" asked Howard Gleckman, a senior fellow at
the institute who has co-authored studies on the subject.
problem is large and growing. Researchers estimate that about
half of people who are 65 today will need help with daily
activities such as bathing or eating at some point in their
lives. Most will need help for less than two years, but about
1 in 7 will have a disability that lasts for more than five
though many people rely on unpaid family help, a growing
number will need care provided by home health aides or nursing
homes. Someone who turns 65 today can expect to rack up about
$138,000 in long-term care costs over the rest of her life,
according to the Urban researchers. Once people exhaust their
own resources, they often turn for help to Medicaid, which
covers 40 to 60 percent of long-term care services in this
country, providing nursing home and other services to
low-income people who have few other assets.
recently released issue paper and in a study in the journal
Health Affairs last year, the Urban researchers modeled the
spending impact of two programs that each paid a $100 daily
benefit, with a 3 percent annual inflation adjustment. The
first would pay at the beginning — 90 days after someone
needed help with at least two "activities of daily
living" — for up to two years, while the second would
pay at the end — for an indefinite period — after someone
had needed assistance for at least two years.
spending impact on consumers’ out-of-pocket costs and the
Medicaid program would vary depending on when the coverage
program that paid on the front end would have a bigger effect
on individuals’ out-of-pocket spending for long-term care
services. Forty-five percent of spending on the front-end
program would displace out-of-pocket spending by individuals,
compared with displacing 33 percent of out-of-pocket spending
in the back-end program. That makes sense, since many people
pay for long-term care services on their own until they can no
longer afford to do so and then turn to Medicaid.
the insurance program that paid out on the back end after two
years would be more advantageous for Medicaid. That program
would displace 38 percent of Medicaid spending, compared with
just 15 percent for the front-end program.
advocates have long championed plans to establish some sort of
national insurance program to help cover long-term care
services. But costs and political differences have stymied the
efforts. The Urban researchers, in the most recent brief,
suggest that although more studies are needed, the back-end
program they modeled "could reduce Medicaid spending,
providing financial relief to hard-pressed states" and
"reduce out-of-pocket spending for families."
is only one piece of the puzzle, said Bonnie Burns, a policy
specialist and long-term care expert at California Health
Advocates, a Medicare advocacy organization.
we need is a coordinated system of care," she said.
"We’ve spent 30 years of looking at this problem. There’s
lots of data but there’s no action."