Healthcare policy experts say that long-term care would most successfully be paid for through a system that combines private insurance company products with government-provided coverage.
Few people have long-term-care insurance and many Medicare beneficiaries mistakenly believe that Medicare will pay those costs. The issue is becoming more urgent as the large baby boomer generation begins to enter the age where long-term care is most often needed.
“This is an odd kind of silent crisis for every American family, and we're not having a national dialogue,” said Anne Tumlinson, a consultant and healthcare policy analyst.
In remarks prepared for the House Energy and Commerce Subcommittee on Health hearing, Rep. Frank Pallone (D-N.J.) said he plans to introduce legislation that would create a Medicare “Part E” to pay for long-term care. He gave no further details.
“Now, this can be done in many different ways, but, whatever form this effort takes, we must act with a sense of urgency,” he said.
Republicans on the committee such as Rep. Michael Burgess of Texas would likely oppose the bill. Burgess has said solutions can be found in the private sector. He said he purchased a long-term-care policy on the advice of his parents.
“It just seems like responsible financial planning, and I wonder why more people don't do it,” he said.
Long-term-care needs vary greatly among individuals but can be extremely expensive. More than 40% will have a cost of more than $100,000 over their lifetime, according to the Bipartisan Policy Center (PDF). Currently, families sometimes have to spend all of their savings in order to qualify for Medicaid, which pays the largest amount of long-term-care costs.
They also rely on unpaid caregivers, usually female relatives or friends, who lose the opportunity to earn wages and end up spending out of their own pocket for an older person's care.
“We can't backdoor finance this off of women,” Tumlinson said.
Legislators have been trying to find ways to pay for long-term care since the late 1980s, but solutions have been elusive. The Community Living Assistance Services and Supports Act was intended to create a long-term-care insurance program under the Affordable Care Act, but was never implemented because the details to create it were never agreed upon.
Alice Rivlin, a leader of the Bipartisan Policy Center Long-Term Care Initiative, said that while such sweeping legislative action has so far failed, many researchers and advocates are finding incremental changes that could provide for at least a better system.
“Amazing progress has been made at the community level in finding new ways of keeping older Americans and people with disabilities out of institutions and in the community where they are happier and less isolated and can be served more effectively and cheaper,” she said.
Rivlin said she and her colleagues determined that private long-term-care insurance should be more affordable and available and there should also be a federal option for catastrophic coverage. They propose a limited benefit coverage of two to four years after a cash deductible is met. They also suggest making it easier for state Medicaid programs to encourage the shift of care setting from institutions and hospitals to homes and community centers.
Employers have a big role to play and should consider offering long-term-care insurance as a retirement option that employees would have to actively opt out of, she said.
“That really works,” Rivlin said. “We think more people would buy long-term-care insurance if it were the default option."
Tumlinson said insuring long-term care is tricky because the costs could be extensive for a person living in a nursing home for a few years, but relatively nonexistent for others.
“The bottom line is the risk here is large and it is uncertain,” she said.
It is her view that some type of long-term-care coverage would have to be universal and the current “patch-work system” isn't working.
“I can't figure out how to change the system unless everybody's in it,” she said. “Mathematically, I can't figure it out.”