New Commission Unlikely to Change in Long-Term Care Financing

WASHINGTON, DC — The recently formed Long-Term Care Commission faces a daunting task in deciding whether to expand or reduce the role of government in caring for our nation’s aging population, according to Joshua M. Wiener, Ph.D., distinguished fellow and director of RTI International's Aging, Disability and Long-Term Care Program.

In a feature published in the May issue of  Health Affairs, Wiener discusses the options for reforming long-term care financing, and expresses doubt in the commission’s likelihood of success.

“The Long-Term Care Commission faces a daunting task,” Wiener said. “At its heart, the question of long-term care financing is about the proper role of government, an issue about which Americans are profoundly divided. With this ideological divide, it is hard to see where the middle ground is that would gain a bipartisan majority on the commission.”

According to Wiener, during the past 25 years, the delivery system for long-term care has changed substantially, with a dramatic expansion of home and community-based services, the introduction of participant-directed home care, the increase in assisted living facilities and thus the decline in the use of nursing home. But almost nothing has changed in long-term care financing during that period.

At the same time, the number of people needing informal care, home care and nursing home care is expected to roughly double between 2000 and 2040 and public spending on long-term care is also likely to increase substantially.

Because of this, Congress established a new 15-member Long-Term Care Commission in February to examine financing and other issues. The commission has six months to come up with its recommendation.

According to Wiener, the commission’s options include capping or liberalizing Medicaid, integrating Medicaid and Medicare, promoting private insurance and developing a public long-term care insurance program.

To liberalize Medicare, he suggests one option is to require all states to cover state-plan personal care and limit state waiting lists for home and community-based services.

Another possibility for reform is to integrate Medicaid and Medicare. He says that by doing so, the hope is that the acute care savings can be used to financing long-term care and that savings from reduced nursing home use can be used to finance home care.

Long-term care insurance, private or public is also a consideration. But, Wiener points out that during the past five years, long-term care insurers have fled the market and others have substantially raised their premiums.

“For most insurers, trying to predict long-term care expenditures over a 20- to 40-year period is too risky,” Wiener said. “Although the potential for private long-term care insurance to cover large portions of the population was never high, recent developments make doing so even more implausible.”

When it comes to public long-term care, Wiener suggest one possibility would be to revisit the recently repealed Community Living Assistance and Services (CLASS Act) that was part of the Affordable Care Act  and make changes so that the program would be financially viable, but he said the chances of that passing in the current political environment are slim.

And of course, requiring mandatory participation in public long-term care insurance programs as is done in Germany, Japan and the Netherlands remains an option.

Finally, Wiener argues that the political impasse will not be broken until people demand change.  So far, that has not happened. Personal hardships concerning long-term care have remained personal and are not seen as part of a larger systemic problem.  “Until the personal becomes policy and policy becomes political, it seems unlikely that much will change,” he said.