Those looking to rein in the costs of Medicaid have long-term care in the crosshairs. It's a tempting target. A program that was initially intended for the indigent is now a form of middle-class entitlement for senior citizens, a poor substitute for a real policy on what to do with the coming onslaught of frail elderly. There is a very real fear, however, that anything the current power brokers in Washington come up with will be Bush-ness as usual: Give people tax incentives to help them fend for themselves while slashing the social safety net.
Last week, the White House Conference on Aging held a preliminary meeting in Chicago to begin addressing these issues. In December, the decennial meeting of the influential conference will be held in Washington, and the aging of the baby boomers and its impact on our healthcare system and fiscal policy will be front and center. At the same time, a commission established by Congress is looking into how to cut $10 billion from Medicaid by 2010.
There is no doubt we need a real policy, one that acknowledges the reality that millions of people will need assistance beyond a tax cut. Two out of three seniors rely on the program to cover nursing home bills. By the time the boomers are fully assimilated into the ranks of the aged (in 2040), we will be spending $760 billion per year on their long-term-care needs from all sources, the Congressional Budget Office says. A collapse in the system of employer-paid pensions in recent years and a tendency among boomers not to save will only swell the ranks of those forced to rely on government.
Medicaid nursing homes are mostly bleak affairs, with underpaid staff providing indifferent care. Coming cutbacks in Medicare payments for rehabilitation, which nursing homes use to supplement low Medicaid payments, threaten to make that situation even worse.
So what to do? Nobody has all the answers, but there are some models out there that at least give us a starting point. From my own recent experiences with an aging parent who has been in and out of nursing homes, the best place to get care is your own home. It is less expensive overall to provide nursing and rehabilitative care outside of institutions, as long as the patient is reasonably functional and there is family support. Vermont has had success with a waiver to allow for more home care in its Medicaid program. Spurring greater use of reverse mortgages, which use home equity to generate cash flow for things like home health aides, can help.
For those who will need nursing homes, there are alternatives to the financial cat-and-mouse game that many seniors use to qualify for Medicaid. Yes, incentives to buy private long-term-care insurance might work for middle-class and wealthy people. Currently, only about 8% of nursing home residents have these policies, but they are gaining in popularity. Some employers are offering help with them.
Another template has been in existence since 1993. A public-private initiative called the Partnership for Long-Term Care markets a form of long-term-care policy in four states -- California, Connecticut, Indiana and New York. When a policyholder runs through the benefit, he or she can keep assets equal to the amount paid out by the policy while still qualifying for Medicaid, further encouragement to get people to sign on while saving government money.
Let's not assume, however, that in a nation where 45 million people lack health insurance, that suddenly the majority of people can afford policies that average more than $1,400 a year. Government must play a role in ensuring that seniors who can't fend for themselves have support, and make the home the priority site for that care.
What do you think? Write us with your comments. Via e-mail, it's [email protected]; by fax, dial 312-280-3183.