Financing long-term services and supports: Continuity and change

Abstract

This article provides an overview of financing for long-term services and supports (LTSS) in the United States, paying special attention to how it has changed and not changed over the last 30 years. Although LTSS expenditures have increased greatly (like the rest of health care), the broad outline of the financing system has remained remarkably constant. Medicaid—a means-tested program—continues to dominate LTSS financing, while private long-term care insurance plays a minor role. High out-of-pocket costs and spend-down to Medicaid because of those high costs continue to be hallmarks of the system. Although many major LTSS financing reform proposals were introduced over this period, none was enacted—except the Community Living Assistance Services and Supports Act, which was repealed before implementation because of concerns about adverse selection. The one major change during this time period has been the very large increase in Medicare spending for post-acute services, such as short-term skilled nursing facility and home health care. With the aging of the population, demand for LTSS is likely to increase, placing strain on the existing system.