Committee to Congress: Long-Term Care Solution Needs Public Insurance Funding

Concerned that the report to Congress last week on the future of long-term care failed to address key issues regarding long-term services and supports, members of the Long-Term Care Commission recommend an alternative financing solution to help older adults pay for such services.

Among people now turning age 65, an estimated three in 10 will never need long-term supports and services (LTSS), however, two in 10 will need five or more years of LTSS, according to the report titled “A Comprehensive Approach to Long-Term Services and Supports.”

As half of all people turning age 65 will have no private out-of-pocket spending for LTSS, whereas only about 5% are projected to spend more than $100,000 out-of-pocket, according to Commission members, there is a need to create a finance solution that spreads the risk for the costs of long-term and supports as broadly as possible. 

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To do this, Commission members are calling for a public social insurance program that can be easily understood and navigated to provide comprehensive benefits to individuals requiring LTSS.

The insurance could take a variety of forms, notes the Commission, with one option being the creation of a more limited benefit, either within Medicare or in a new public program. 

“This approach has the advantages of creating a manageable role for private insurers by limiting their exposure to catastrophic risk and by making clear the ‘hole’ that people able to prepare in advance should plan to fill, through private resources,” the Commission writes.

Benefits under this arrangement would be specified as a dollar-amount per day, varying with level of impairment, and be applicable to the full range of LTSS services such as home health care, skilled nursing or adult day center services.

Individuals could also opt for a service rather than a cash benefit under this option, with benefits financed through a combination of Medicaid savings (federal only or federal and state) and a surcharge on the income tax that would be higher for people currently near or at retirement age. 

However, while a social insurance core would not eliminate the roles of private insurance or family financing or caregiving, Commission members believe it would help make these roles more manageable.

“Social insurance does not eliminate personal or family responsibility; it makes shouldering that responsibility manageable and affordable,” writes the Commission. “Until such a program is enacted and as part of or alongside it once enacted, we recognize that improvements are needed in current programs.”

Despite the Commission having already submitted a report to Congress, five committee members split off to compose an alternative report that they feel fulfills the statute of why the Commission was established in the first place. 

That statue states that the Commission shall develop a plan for the establishment, implementation and financing of a comprehensive, coordinated system that ensures availability of LTSS for individuals, including elderly and others who require assistance with activities of daily living. 

“We issue this statement to express our shared vision of what is necessary to meet Congress’s mandate to establish and finance a high-quality, comprehensive LTSS system for Americans who need such services,” wrote the Commission members.

Written by Jason Oliva

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