Design by committee

Asking 15 experts to solve a $200 billion-plus problem that has stymied federal lawmakers for decades seems challenging enough.

Add to that task a deadline of less than three months, a bitterly divided Congress and a battle-weary administration, and it's hard to imagine that the congressionally mandated Commission on Long-Term Care will succeed in its aim of developing a plan to establish, implement and finance a long-term care system by the time the panel's funding runs out Sept. 30.

Difficult but not impossible, according to experts both on and off the commission, whose creation was quietly tucked into the American Taxpayer Relief Act that Congress passed in January.

Seen by many as a consolation prize to supporters of the Community Living Assistance Services and Supports Act, or CLASS—the 2010 health reform law's voluntary, long-term care system championed by the late Sen. Ted Kennedy that Congress repealed in that same fiscal-cliff legislation—the commission comprises clinicians, policy experts and advocates who are long on expertise but short on time and political clout to achieve their goal.

Some members have shown confidence and optimism that they'll be able to craft some viable options by September. But even if the commission succeeds, the question then shifts to whether policymakers have the political will and interest to use the recommendations in a way that creates a long-term care system that is effective and financially solvent.

The challenge is that the money to finance long-term care for the burgeoning number of Americans who will need it in the next few decades has to come from somewhere—from government programs, private households or some combination of the two. By 2030, there will be 72.1 million people age 65 or older, more than twice their number in 2000—according to HHS estimates.

Only two months remain until Sept. 12, when the commission must vote on a blueprint that it intends to share with lawmakers. After that, the panel has an additional 30 days to finish its work, but its funding stops after Sept. 30, says Larry Atkins, president of the National Academy of Social Insurance, who was named the panel's staff director in Washington last month. And it hasn't helped matters that the panel has had such a slow start since it was created six months ago.

Dr. Bruce Chernof, president and CEO of the SCAN Foundation and chairman of the commission, cites two reasons for the delay. First, the law didn't create a funding mechanism for the panel. Congress later provided one-time funding of $500,000, which will be used to pay Atkins and other staff, as well as for office operations and the travel expenses for members, who are not paid for their service on the panel. Meanwhile, the legislation required five offices—the White House and the majority and minority leaders in both chambers of Congress—to appoint members, the last of whom wasn't appointed until March. The group didn't host its first (and, so far, only) public hearing until June 27.

“This is a diverse group of commissioners—intentionally so—appointed to reflect a range of views, and we're going to work to get as much common ground as we can in the time we have,” says Atkins, who explains that the commission operates under the rules of the Senate and soon expects to launch a website, where it will post transcripts of public meetings. Currently, the staff consists of two members, but Atkins says he expects that number to grow.

With the logistics mostly ironed out, the commission now faces an uphill climb as members gather information from stakeholders to devise a plan. At the heart of that solution is how to finance a long-term care system in the U.S., where long-term care services and supports for the elderly and younger populations with disabilities cost about $210.9 billion in 2011, with about two-thirds of that bill paid for by Medicaid, according to a February report from the National Health Policy Forum.

The financial problems become more complex as commissioners are faced with a collapsing long-term care insurance market. Experts say the financial and personal burden of long-term care on individuals and families is severe, even with Medicaid.

“The big question for the commission is whether they're going to try to come up with a set of recommendations that everybody can agree with, or if the Democrats come up with their proposal, which will be more public sector-oriented, or if the Republicans come up with their proposal that is more private-sector oriented,” says Joshua Wiener, a distinguished fellow and program director for aging, disability and long-term care at RTI International in Washington.

Wiener wrote about long-term care services and various options in the journal Health Affairs this past May. “It's hard to know what everyone will agree on, in particular because almost everything costs money,” he says. “Things that cost money are going to have a tough time with Republicans.”

In the private arena, nursing home care comes at a great cost. According to the National Health Policy Forum, the average annual cost of nursing home care was $81,030 for a semi-private room and $90,520 for a private room last year. Meanwhile, options for individuals to buy private long-term care coverage have grown increasingly limited as some major players—including MetLife and Prudential—have dropped out of the market in recent years (March 11, p. 6).

Chernof says the private long-term care insurance market has suffered because it took a hit from extraordinarily low interest rates on investments in a sluggish economy and also because it has had a tough time selling its products broadly in the marketplace.

“Let's look at the history here: Has it worked to date?” says Larry Minnix, president and CEO of Leading Age, an organization that advocates for seniors, children and people with special needs. Minnix says he has seen premiums on his own long-term care insurance soar by about 60% in the past two years. “In the last year, some of the biggest names have gotten out of the business or gone broke.”

The long-term care financing issue in the U.S. has long been caught up in ideological and partisan divisions about the role of government. A report from the Organisation for Economic Co-operation and Development—which represents 34 countries including the U.S.—found that most OECD nations have established “collectively financed schemes for personal and nursing-care costs.”

With a completely private long-term care option seen as unaffordable and largely ineffective, and the repeal of CLASS as a strong indicator of Congress' view that a public option for long-term care insurance is untenable, commissioners and staff director Atkins suggest a hybrid approach could end up in the final report.

“I think the commission will come forward with a range of views,” Chernof says. “Given the place that we're in, there are strengths and weaknesses in both the public and private programs.”

In November 2010, Chernof's SCAN Foundation sponsored a study conducted by the Center for Health Care Strategies that focused on how Arizona, Hawaii, Tennessee, Texas and Wisconsin have developed managed-care approaches to long-term care services and supports. In their report, the authors listed what they called 10 “mileposts” that other states could work toward to develop managed long-term services and supports. Those included approaches such as structuring a long-term care services and supports systems around a goal that addresses the needs of the state and community and then communicating that message to stakeholders; structuring a benefits package that incentivizes the right care in the appropriate setting, coordinated with acute care; and developing financial performance incentives to achieve the program's goals.

“There are a fair number of states that drive a better system, and we can learn from those,” Chernof says.

With the deadline looming, the commission will host another public hearing in Washington on July 17, according to Atkins, who says he expects the group to meet three times in August and probably twice in September, in a combination of public and private meetings, all in Washington.

“We'll have to see,” says RTI's Wiener, “but it's a pretty tall order for the commission in a short period of time to come up with a meaningful list that they can recommend that everyone can agree with.”

Follow Jessica Zigmond on Twitter: @MHjzigmond