The growing number of people who require long-term health care is placing pressure on American families, their finances, and government budgets.
Medicaid is the largest payer across the nation for long-term health care services. According to the latest government statistics, Medicaid paid over $50 billion in the last reporting year, paying the bills for 62% of long-term care residents in nursing homes.
Medicare, which covers short-term nursing home visits for older adults or people with disabilities, spent $38.2 billion that year.
People require long-term health care services because of chronic illnesses, mobility problems, dementia, and the frailty of aging.
Medicaid Only Pays for Those with Little or No Assets
However, Medicaid will only pay for long-term health care if the care recipient has little or no income and assets. Increased demand for services and limited government reimbursement for care has created a quality-of-care problem compared to private long-term health care services.
For example, the quality of care in Medicaid is a growing problem in Florida. The number of complaints concerning Florida's Medicaid-managed long-term care programs has risen recently, as members of a statewide medical care advisory panel were recently told.
Paula James, the Agency for Health Care Administration (AHCA) Bureau of Plan Management Operations administrator, said there were 312 calls in May 2022 complaining about the contracted managed care plans that provide long-term care services in Florida.
The complaints, unfortunately, have been going up in the last three months. in some areas it's gone down a little, but we do have a trending rate that has gone up in some of the complaints.
Less Institutional Care in Florida Medicaid
FloridaPolitics.com reported that in March 2018, 54% of the 100,209 people enrolled in the Medicaid-managed long-term care program received care in nursing homes. Today, 62% of the 123,052 Medicaid-managed long-term care enrollees are receiving services they need to keep living in a community setting and outside an institution. These services include adult companion care, attendant care, homemaker services, intermittent and skilled nursing, or personal care services.
Roughly 76,000 people on the waiver receive home and community-based services.
So, we are right where the agency has wanted to be all along. We are increasing the population that is able to receive services in their home or in a less restrictive environment like an assisted living facility rather than in a skilled nursing facility.
In-Home Care Prepared Over Nursing Home Care
Most care recipients prefer to remain at home and avoid nursing homes. Like several other states, Florida has shifted away from nursing home care in the Medicaid program. James said there has also been an uptick in the number of people participating in what's known as the Participant Directed Option (PDO).
PDO allows Medicaid beneficiaries who require assistance with eating, bathing, grooming, and homemaker services to hire workers providing certain long-term health care services. The PDO is available to all long-term care enrollees who live in their own homes or who hire friends, family members, and neighbors to provide the care.
Money for Care and Staffing
The problem of long-term health care funding is a national problem. The Biden administration is considering a requirement that the nation's 15,500 nursing homes spend most of their payments from Medicaid on direct care for residents and limit the amount used for operations, maintenance, and capital improvements or diverted to profits.
If adopted, it would be the first time the federal government insists that nursing homes devote the majority of Medicaid dollars to caring for residents.
There have been staffing problems in long-term health care facilities nationwide.
"The absolutely critical ingredient" for good care is sufficient staffing, Dan Tsai, a deputy administrator at the Centers for Medicare & Medicaid Services and Medicaid director, told Kaiser Health News.
David Grabowski, a professor of health care policy at Harvard Medical School, says that public dollars should be used for direct care services.
We're expecting that the nursing home will make the best judgment as to the right kind of share of spending on labor and materials and capital to really produce the highest level of quality, but that just hasn't been the case. So this recommendation is really an opportunity to put up some guardrails.
However, some say that directing how long-term care facilities spend money will harm the quality of care. The claim is there would be less money for maintaining their facilities, and the quality of care will suffer.
Medicaid reimbursement is also questioned as many say that Medicaid doesn't cover the cost of care.
Different Approach in Illinois
In addition to a direct care spending mandate, Dan Tsai said the Centers for Medicare & Medicaid Services and Medicaid is interested in a slightly different approach underway in Illinois.
Illinois made changes to nursing home regulations this year. The state's nursing home rate reform law raises Medicaid funding and requires each nursing home to hire at least 70% of the staff that the state's analysis shows the residents need.
The state uses payroll and other data to verify that the facility complied. If not, the difference will be deducted from the next payment.
There are states across the country trying a range of approaches to ensure that dollars in the system from nursing facility reimbursement rates are actually — one way or another — getting to sufficient, high-quality staffing. That's our primary goal.
LTC Insurance Offers Choice and Quality for Those with Policies
Advocates for private Long-Term Care Insurance point out that the quality of care is higher in private facilities, including assisted living, memory care, and nursing home facilities. LTC Insurance will also pay for adult day care centers and in-home care.
The insurance benefits allow higher payments for caregivers and quality facilities. Policyholders have a choice of care services in the setting they desire. With LTC Insurance, the policyholder maintains their assets, lifestyle, and legacy.
Most states also participate in the Long-Term Care Insurance Partnership program that provides dollar-for-dollar asset protection - otherwise known as asset disregard. It allows the policyholder to shelter part of their estate from spend-down and asset recovery based on the total amount of money paid for care by the policy and still qualify for Medicaid's long-term care benefit.
The benefit of the partnership program is that it allows families to protect savings and if they exhaust all their insurance benefits and still qualify for Medicaid without losing everything.
The problem with Long-Term Care Insurance is that it cannot be purchased at the time of need. Since LTC Insurance is medically underwritten, it needs to be obtained when someone is relatively healthy.
Premiums are based on several factors, including age and health. Most LTC Insurance is purchased when someone is in their 50s. However, the policies are custom designed and are often very affordable for many people, especially if purchased younger - How Much Does Long-Term Care Insurance Cost? | LTC News.
Burden on Loved Ones
Most research studies indicate that most people are concerned about the quality of care and not being a burden on their families. Family caregivers face many challenges and are not usually trained and prepared for the role.
The people I speak with understand that their adult children have their own lives and responsibilities. They wish for their loved ones to have the time to be family, not caregivers," said Mary Ann DeKing, a nationally known expert on long-term care planning.
DeKing says that long-term health care costs are rising rapidly and can quickly drain most people's lifetime savings. With the increasing cost of care services, the financial impact will be even more significant in the decades ahead.
The LTC NEWS Cost of Care Calculator shows the current and future costs of all types of care services based on where you live - Cost of Care Calculator - Choose Your State | LTC News.
The problem of long-term care is not going away any time soon. There are 162 million Americans in the combined Generation X, late boomers, baby boomers, and older generations. The U.S. census bureau says that for the first time in history, older adults are projected to outnumber children by 2035.
About the Author
Linda is a freelance writer interested in retirement planning, health and aging.
Contributor since October 31st, 2017
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