Instead of reforming the long-term care system under Medicaid, the Biden administration wants to spend billions of dollars to expand the deeply troubled program.
Sen. Tim Scott (R-SC), a ranking member of the U.S Senate Special Committee on Aging, released a comprehensive report opposing the Biden administration’s plan.
“Unfortunately, the Biden Administration’s $400 billion caregiving proposal overlooks the core needs of older Americans, doubling down on expensive and inadequate policies,” Scott writes in the report. “The Administration’s proposal relies almost exclusively on Medicaid’s Home & Community Based [Services] program. It would pump funding into labor costs and expand enrollment. Government financed 7% of spending on Long-Term Services & [Supports] in 2018, up from 63% 20 years earlier. This plan would continue the alarming cost trend.”
Putting People in Charge
The COVID-19 pandemic exposed the substandard conditions in many long-term care facilities, which are supposed to be safe places for America’s seniors. One out of five COVID deaths in the United States occurred in nursing homes and other long-term care (LTC) facilities.
Instead of increasing the role of government in long-term care, the administration should offer more support to family members who provide care to their elderly loved ones, says Scott’s report. The government should also encourage more “self-directed” care.
“According to AARP, 86% of Americans aged 65 and older would like to stay in their current home or community. In fact, 66% expect to stay in their current home and never move, while 12% expect to move but stay within their community,” Scott states in his report.
German and Austria offer cash payments to people eligible for long-term care, with few strings attached, and England and the Netherlands, the disabled and the elderly are able to manage their own long term care budgets, including the firing and hiring of caregivers, John Goodman, the president of The Goodman Institute and co-publisher of Health Care News points out in an article in Health Affairs.
“We are spending an enormous amount of money already warehousing seniors. Other countries save money and improve the quality of care by privatizing the system and letting families make their own decisions,” Goodman told Health Care News.
Scott has the right idea, says Stephen Moses, the president of the Center for Long-Term Care. “Encouraging self-directed care and supporting America’s millions of caregiving families is far more important,” Moses told Health Care News.
Congress should also amend the Medicaid rules around long-term care to make it harder for affluent seniors to qualify for Medicaid, said Moses. Under the current rules, wealthy families are permitted to keep senior family members’ assets, such as homes and cars, while having long-term care provided by Medicaid—a program that exists to help people in poverty.
“If Medicaid didn’t exempt up to $906,000 of home equity, homeowners would tap that resource with reverse mortgages, purchase the high-quality private home care they prefer, and stay off Medicaid,” said Moses said. “With home equity at risk, more people would buy private LTC insurance over time. With more home equity and insurance paying privately for long-term care, Medicaid would have increased resources left over to help the needy, who are mostly not homeowners and who are often minority families. In other words, save Medicaid for the under-privileged by inducing the middle-class and affluent to plan responsibly to pay privately for long-term care when and if they need it.”
In a June 23 article titled, “President Biden, Tear Down This Wall,” Moses proposed a three-part plan to reduce America’s reliance on Medicaid for long-term care. First, Congress would eliminate Medicaid loopholes that allow affluent seniors to qualify, as well as the “perverse incentives” that discourage consumers from planning early and responsibly for long-term care, Moses writes.
“Step two is to put the Medicaid estate planning bar out of business. Systematically identify, analyze and prohibit the methods and financial products elder law attorneys use to qualify their affluent clients for Medicaid LTC benefits,” Moses writes. “Stop their discriminatory practice of using ‘key money’ to buy well-heeled clients access to the best long-term care facilities at the exclusion of poor people who lack the funds to pay privately.”
The third step is to warn the public that long-term care is a “pay now or pay later” proposition, Moses writes.
“With home equity at risk, consumers will finally see why private long-term care insurance, paying a premium now to avoid a potentially devastating cost later, is the preferred choice to make,” Moses writes. “Without Medicaid crowding out most of the demand for private LTC insurance, that product will become a viable alternative for many more people than now, especially homeowners seeking to protect their biggest asset.”
Ashley Herzog (firstname.lastname@example.org) writes from Avon Lake, Ohio.
Sen. Tim Scott, “Expanding Opportunities for Older Americans: Self-directed Home & Community Based Services,” June 2021: https://www.aging.senate.gov/imo/media/doc/HCBS%20Report%20FINAL.pdf