By Joanne Lynn and Elizabeth Blair
For about the last decade, federal policymakers have shunned serious consideration of long-term care, apparently feeling either that it is a black hole of need or that dealing with it gets too close to acknowledging rationing and death panels. People who tried to encourage a focus on long-term care, often now called long-term services and supports (LTSS), were quickly suppressed at the federal level. In 2013, after the repeal of the Community Living Assistance Services and Supports program or CLASS Act, which was found to be actuarially unsound, the Commission on Long-Term Care was appointed to develop policy recommendations for long-term care financing and service delivery. However, the Commission was unable to come to accord on a financing plan, and policymakers did not take up its other recommendations. Meanwhile, states have watched their budgets get swallowed by Medicaid LTSS costs and have responded with various endeavors to integrate LTSS with medical care or simply limit their costs.
However, change is coming. Already this year, four major reports have been promulgated by influential groups, and the U.S. House of Representatives Energy and Commerce Committee held a hearing on March 1 to summarize these issues and illuminate options. The data and consensus point to a striking convergence.
The basic data came out in Health Affairs in November of 2015. Favreault et al. reported the findings from a rigorous, substantial simulation of various strategies for financing LTSS. This work concluded that a plan that relies on voluntary purchase of long-term care insurance (LTCI) will not get enough people covered and will not result in any substantial savings to Medicaid. The researchers examined the various approaches of public involvement, adjusting features such as the length of time until LTCI starts paying and the maximum payments. The bottom line is that getting a broad financing mechanism requires both private savings and public investment and that the most workable solution would be to enhance the private LTCI marketplace by providing a public program to cover catastrophic costs. In LTCI, catastrophic costs mostly arise from unusually long duration of need. Most people have less than 2 years of LTSS need, but some have many decades. If Americans were expected to save or purchase LTCI to cover 2 or 3 years of LTSS and the community (through government programs) pitched in at that point, then the pricing and risks of LTCI would become much more predictable and the purchase of LTCI would become much more affordable. The Health Affairs article laid out the data but did not advocate any one option.
Picking up where the modelers left off, the Bipartisan Policy Center (BPC) took a step closer by issuing a report that recommended the creation of a publicly financed catastrophic LTCI program, along with additional recommendations to strengthen private LTCI programs.
At about the same time, LeadingAge released its 2016 Pathways Report: Perspectives on the Challenges of Financing Long-Term Services and Supports, affirming its commitment to engaging policymakers on the issues of LTSS financing.
Then on February 22, the Long-Term Care Financing Collaborative took the obvious but previously unspoken step of overtly calling for a federal program to cover LTSS once the person has been disabled for 2 or 3 years. With a public program covering the back end, families, elders, employers, and LTCI companies could come up with flexible, workable ways for most Americans to save for LTSS needs in old age, either by purchasing LTCI or by saving enough for this limited period.
On March 1, while the country was watching Super Tuesday, the Energy and Commerce Committee held a hearing on LTSS financing, with Alice Rivlin speaking to the BPC report, Anne Tumlinson discussing the data, and William Scanlon addressing broad policy issues. The members asked good questions and clearly were looking for even partial solutions. Not a single member implied that LTSS needs were not a federal issue or that families should do more.
The rebirth of this conversation is important and it is important that it is framed with data that make it very difficult to pretend that we could adopt an entirely voluntary approach. Some degree of protection from catastrophic duration of LTSS need will have to be a public issue in order to make LTCI affordable. Some array of incentives and education will be needed to get large numbers of persons having coverage for the “front-end” first few years.
We must recognize that the challenge of so many of us needing LTSS in old age will require addressing two additional issues. First, any solution for financing LTSS is likely to require more than a decade to become fully operational. Indeed, if it relies greatly on worker savings, the lag will be around 20 years, the usual duration between retirement and need for LTSS. We need stopgap solutions for the interim.
Second, the financing of LTSS needs to go hand in hand with reforms in the delivery of comprehensive services, LTSS, and medical services. We need to reduce the per capita cost of comprehensive care, probably more in the medical line of work than on the LTSS line, which may actually have enough unmet need that initiating better availability of services would increase costs for a time.
Long-term care is back! It’s time to organize a strong voice for caregivers, to propose MediCaring Communities, to test appealing possibilities, and to organize for permanent reforms. The effort needs to stay bipartisan, guided by data, and a point of pride in the society. Let’s push these issues in the current elections, encourage professional and consumer groups to create agendas, and end up with LTSS being reliable and affordable.
Read the BPC’s recommendations here: http://bipartisanpolicy.org/library/long-term-care-financing-recommendations/
Read the LeadingAge Pathways Report here: https://www.leadingage.org/pathways/
Read the Long-Term Care Financing Collaborative’s report here: http://www.convergencepolicy.org/ltcfc-final-report/
Read the Health Affairs article on the modeling here: http://content.healthaffairs.org/content/early/2015/11/13/hlthaff.2015.1226
View the Energy and Commerce Committee hearing “” and read testimony here: https://energycommerce.house.gov/committee-activity/hearings/hearing-on-examining-the-financing-and-delivery-of-long-term-care-in-the and