Proposals to improve the financing and delivery of long-term care (LTC) were considered at a House hearing held by the Energy and Commerce Committee’s Health subcommittee. The subcommittee heard testimony from experts in the field who addressed the need for accessible LTC as Americans are growing older. In addition to addressing the changing demographic problem, the witnesses testified as to new financing strategies, including new models of LTC insurance. Committee chairman Joe Pitts (R-Pa) noted that the hearing was designed to exam the state of the LTC and to find a viable long-term solution.
Congresswoman Doris Matsui (D-Calif) noted that the current financing system relies too heavily on the unpaid labor of 52 million individuals who care for their ailing family members or friends. Matsui also noted that the costs of LTC are placing too great a strain on Medicaid, which is the single largest payer of LTC services. She also made clear that under the current system, despite misconceptions to the contrary, Medicare pays for LTC in very limited circumstances.
An insurable risk
William Scanlon, a Consultant at the West Health Institute and National Health Policy Forum and the former managing director of Health Care Issues as the US General Accounting Office, testified that a financing solution based upon efficiencies found in the delivery or payment process is unlikely to succeed. Scanlon testified that insurance is a solution and that LTC makes sense as an insurable risk because the need for LTC services is not a certainty. He noted that “for persons turning 65 between 2015 and 2019, almost half (48 percent) will have zero LTC expenses before they die.” He explained that an individual benefits more from insurance than by saving for LTC expenses because there is a high probability that all or most of the monies saved in anticipation of LTC expenses would remain unused when the individual dies. Despite the advantages, Scanlon testified that only 3 percent of adults and 11 percent of adults over 65 have a private LTC insurance policy.
Alice Rivlin, Co-Chair of the Long-Term Care Initiative at the Bipartisan Policy Center testified as to four proposals to reform the system. One of those ideas, based upon the notion that LTC should be an insurable risk, is to make private LTC insurance more available and accessible. She also recommended the design of a federal LTC insurance option for individuals with catastrophic costs. She encouraged lawmakers to streamline Medicaid home and community-based care options to encourage effective care in lower cost settings. Her final recommendation was to ensure that working people with disabilities do not lose access to LTC services as their earnings increase.
Anne Tumlinson, the CEO of Anne Tumlinson Innovations LLC and Founder of Daughterhood.org, reiterated the problem of unpaid labor in her testimony, noting that while the U.S. spends $200 billion each year on LTC, the country relies on nearly $500 billion in unpaid family care. To solve the problem, Tumlinson discussed three insurance approaches: comprehensive, front-end, and catastrophic. She explained that each variety of insurance involved certain trade-offs like higher costs and limited coverage. Although she acknowledged that reform would be difficult, Tumlinson told lawmakers “we cannot afford to give up.”