WASHINGTON — The topic of long-term care isn't making the cut as part of otherwise animated discussions of possible health care reform in the next administration, according to speakers at a meeting sponsored by the Brookings Institution.
Sen. Ron Wyden (D-Ore.) said although there will be movement toward overhauling the health system, long-term care (LTC) is not on the radar screen. “We have to make sure long-term care is not the afterthought, the forgotten stepchild.”
Rep. Jim McCrery (R-La.) commented that there was more willingness and consensus than usual around health reform, but also said that LTC is in danger of being overlooked. He called for leadership to avoid that policy mistake.
While the debate over how to finance long-term care is being silenced, nursing home and home-care spending show no signs of slowing down. Medicaid is the primary payer for these services—and states are grappling with how to manage Medicaid budgets in an environment of declining tax revenues.
According to recent studies, about half of nursing home and home-care costs are covered by Medicaid, with Medicare covering another 20%–30% of the bills. The Government Accountability Office recently estimated LTC cost $193 billion in 2004, with 10% covered by private insurance.
Larry Minnix, president and CEO of the American Association of Homes and Services for the Aging, said that caregivers spend an average of $5,500 annually out of pocket on assistance for elderly and disabled family members. Long-term care is an insurable event, he said.
Yet very few Americans have purchased private LTC insurance. Buck Stinson, president of the LTC division at Genworth Financial, the largest LTC insurer in the United States, said an estimated 7 million people hold private LTC policies.
He noted that policies were attracting younger buyers—currently, the average age of a purchaser is 57—which should help spread the industry's risk and bring premium prices down. If the government stepped in as a reinsurer, more private companies could enter the market and offer more affordable policies, he said.
Mr. Minnix suggested a pay-as-you-go system with all workers, starting at age 21, paying premiums to a quasi-governmental LTC program.
Sen. Wyden said that a voluntary contribution system would make LTC financing more palatable to the American public and to Congress, which is required to fund only budget-neutral programs. It would generate “huge waves of support from both sides of the aisle,” said Sen. Wyden.