Medicaid long-term services and supports benefit vital to many seniors

Medicaid provides vital services to seniors in need of expensive long-term services and supports (LTSS). Seniors must have low income and few assets to qualify, and states have some control over benefit package design. Still, Medicaid programs spend considerable billions of dollars on LTSS care for seniors each year.

Coverage and spending

Medicaid programs must provide nursing facility and home health services, but other LTSS are optional. This includes home- and community-based services (HCBS), such as homemakers, home health aides, personal care, case management, and home delivered meals. States have shifted to providing services in home and community settings as much as possible, as opposed to institutional care.

The Kaiser Family Foundation (KFF) noted that in fiscal year (FY) 2011, Medicaid programs spent over $80 billion on full-benefit seniors, and $55.8 billion of this amount went to LTSS. The percentage of LTSS spending varied by state, based on factors such as the amount of services provided and the share of elderly beneficiaries in that location. The services are not cheap: the median annual cost for nursing facility care is $90,000, with adult day health care costing nearly $20,000 a year.

Policy concerns

The amount of people needing LTSS in the next two decades is estimated to grow significantly, and 70 percent of the population turning 65 right now is likely to use LTSS at some point. Many Americans erroneously believe that Medicare will cover this benefit for them, and are unprepared to pay for LTSS themselves. The KFF report indicated that there is interest in streamlining the HCBS benefit to make it easier on both state programs and senior enrollees as the baby boomer generation continues to age.