Chapter 4

All Americans

The Commission believes that federal action is essential to change the nation's fundamentally flawed approach to financing long-term care, and that such action should follow an insurance strategy.

The Commission rejects the other principal strategy, that of encouraging private savings to cover the cost of long-term care. While the encouragement of savings is, independently, a policy goal that might well deserve support, it is inappropriate in this context. It concentrates the financial burden of severe impairment, an expensive and largely unpredictable event, on the unlucky few who experience it, rather than spreading it among the many who are at risk of impairment.

In the absence of insurance protection, becoming disabled means inadequate support for millions of Americans who struggle to remain at home and the risk of impoverishment if and when people need nursing home care. Failure to reform the system is not only to abandon today's elderly and disabled but also to condemn growing numbers of Americans to inadequate access to care in the future.

To prevent this outcome, the Commission unanimously adopted the following goal:

The Commission is committed to the development of public policies that give Americans of all ages access to coverage that provides them necessary long-term care and adequate financial protection.

Regardless of the strategy chosen, coverage should:

• Treat long-term care as an insurable event— that is, an event whose risk can be spread through private and/or public coverage;

• Be affordable to all Americans;

• Allow personal choice of care and setting; and

• Assure quality care and provide for consumer protection.

The Commission is equally committed to agreement on how to raise the financing required to assure access, through public and/or private means; to developing policies that control costs of current and future long-term care services; and to promoting research on preventing or reducing disabilities that create a need for long-term care.

The Commission explored a range of possible strategies to achieve this objective (see Appendix B for a detailed discussion). One strategy is to enhance government protection for the low-income population and promote adequate private insurance protection for the better off. The Commission concludes, however, that to build such a two-tiered system would be to repeat the nation's unfortunate experience in health care. Now and in the future, too many people—most likely people who have worked hard all their lives to earn modest incomes-will find themselves without private protection and dependent on a welfare-based system unable to ensure access to quality care.

Another strategy is to develop a comprehensive public insurance program, for all long-term care services, at home and in nursing homes. The Commission believes that public or social insurance has considerable merit in guaranteeing adequate protection to all Americans regardless of income. However, the Commission is concerned that applying this strategy to all nursing home as well as home care protection requires substantial public resources and provides unlimited protection of assets for people who could protect themselves through private insurance.

In order to target public resources most effectively, guarantee Americans of all incomes adequate protection, and achieve an appropriate balance between public and private insurance, the Commission therefore recommends a limited social insurance approach.

The Commission believes that federal social insurance for home and community-based care is essential to ensure development of an adequate and efficient delivery system for these services and that priority in the use of public resources should go to disabled

people at home or able to come home after short nursing home stays. People in nursing homes should. be guaranteed an ample floor of protection, ensuring that no one-regardless of length of stay in the nursing home will become impoverished. And all but the poorest should contribute to the costs of care.

"Today... we are faced, really, with two choices. We could moan, we can groan about the costs, say it's too difficult a problem to even begin to address. Or we can . . . work toward developing a cost-effective, creative, responsive, and caring program to better address the problems of our chronically ill."

- Senator David Pryor

SUMMARY OF RECOMMENDATIONS

Based on these principles, the Commission recommends developing an integrated public program to meet the diverse needs of severely disabled people and to support private insurance to assist people seeking broader protection. The blueprint has nine parts.

1. The Commission recommends social insurance for home and community-based care and for the first three months of nursing home care, for all Americans, regardless of income. Individuals would be required to contribute to the costs of care, with subsidies for people with low incomes. This protection would sustain resources and standards of living when people need long-term care, just as Medicare or private health insurance does when they need physician or hospital services.

2. For people with long nursing home stays, few of whom return home, the Commission recommends a floor of protection against impoverishment-$30,000 in assets (excluding homes) for individuals and $60,000 for couples-and protection of income for spouses, homes, maintenance, and a decent allowance for personal needs. Protected assets are approximately equal to the life savings of three out of five elderly people. People whose assets exceed the floor would not receive benefits until their unprotected assets were depleted. Income above protected amounts would be applied toward the cost of nursing home care.

3. Recognizing that many people will want additional protection for assets and income above levels protected for long stays-as well as for cost sharing obligations associated with other benefits-the Com

mission recommends measures to promote private longterm care insurance, subject to federal and state oversight.

Promotion would entail clarification of the tax code to give long-term care insurance the same preferential tax treatment health insurance now receives. Oversight would entail standards for insurance policies, consumer counseling to evaluate policies, and penalties on insurers for failure to comply.

4. The Commission believes that all persons determined to be severely disabled, regardless of age, underlying disease or disabling condition, should be eligible for public benefits, at home or in a nursing home. To qualify for long-term care benefits at home or in a nursing home, the Commission recommends that individuals meet at least one of the three following disability criteria: (a) need hands-on or supervisory assistance with three out of five activities of daily living (ADLs); (b) need constant supervision because of cognitive impairment that impedes ability to function; or (c) need constant supervision because of behaviors that are dangerous, disruptive, or difficult to manage. Individuals assessed as severely disabled would be directed to a case manager for assistance in obtaining home care or helped in obtaining a nursing home placement.

5. To ensure that home care services support but do not replace family caregiving and are managed in a fiscally responsible manner, the Commission recommends relying on case managers to develop and oversee individual care plans. Within a federally determined budget, case managers would be free to allocate a broad array of services, tailored to people's needs and preferences. The Commission recommends that benefits include personal care, homemaker/chore services, shopping and other support services, day care (for disabled adults and children), respite services, and training for family caregivers, as well as skilled nursing and rehabili tative care.

6. Under the recommended plan both federal and state governments would be responsible for financing and administering public benefits. The Commission recommends that the social insurance portions of the public program be fully financed by the federal government. The federal government and the states would share financial responsibility for long nursing home stays.

In administering benefits, the Commission seeks a balance between ensuring equal and adequate protection for all severely disabled, regardless of the state in which they live, and allowing flexibility to tailor services to diverse populations and communities. The Commission therefore recommends that the

federal government contract with the states to administer the plan. The federal government would be responsible for setting guidelines and adequate standards for this administration.

The federal government would certify assessment agencies and develop standardized assessment criteria, set guidelines for certifying case managers and establish their budgets (described below), set guidelines for quality assurance and appeals procedures, and determine provider payment rates. Within federal guidelines, states would develop and certify case management and delivery systems, certify providers, establish review and appeals procedures, and enforce quality standards.

7. The Commission recognizes that financial support for long-term care can only be effective if it promotes and ensures quality of care. Furthermore, to be sustainable over the long term, a program must be designed in a way that controls expenditures. The recommended plan therefore includes several measures to ensure quality and control costs. The recently enacted nursing home requirements would apply to the recommended nursing home coverage and standards. would be developed for care in the home.

Alongside these standards, the Commission believes that case management, an integral part of its recommended home care benefits, plays a critical role in ensuring quality and managing costs. The Commission recommends that case managers allocate services and monitor service delivery within a budget set by the federal government. This approach would ensure fiscal constraint and the capacity to tailor services to the needs and preferences of the individual.

The Commission further recommends that the federal government establish provider payment mechanisms and determine appropriate rates. Prospective payment systems can be used to ensure access to quality care, efficiently delivered, and to control spending for care.

8. The Commission recognizes both the urgent needs of the currently disabled and their families for public support and the time it will take to build a long-term care system. The Commission therefore recommends that the plan be put into place a step at a time over a four-year period. The program would begin with limited home care benefits to relieve the burdens of family caregivers. Benefits would be expanded over the next four years, until full coverage is reached. Nursing home coverage would begin in year two. Payment rates would be increased gradually over the subsequent two years, to ensure adequate supply and quality of service.

9. In establishing a system for long-term care, the Commission believes it essential to continue to assess the effectiveness of treatment, delivery, and management of services and to explore means to prevent the need for long-term care services. The Commission recommends that the federal government move aggressively to contain costs and mitigate human suffering by funding a research and development program aimed at preventing, delaying, and dealing with long-term illness and disabilities.

THE PUBLIC PROGRAM

The Commission's recommendations create an integrated system of long-term care designed to meet the dynamic needs of the severely disabled population. There would be a single point of entry for all beneficiaries, a single set of eligibility rules for all services, a standardized assessment to determine eligibility, and a mechanism for managing the care process across settings. The system is designed to allow individuals who qualify for service the opportunity to choose the care setting and the types of care they receive, within specified limits. An integrated system would also help ensure efficient administration and service coordination.

Who Is Eligible for Public Benefits

The Commission believes that public benefits are most critical for people who are severely disabled and in need of substantial care. To qualify for any longterm care benefits at home or in a nursing home, the Commission recommends that individuals meet at least one of the three following disability criteria: (a) need hands-on or supervisory assistance with three out of five ADLs; (b) need constant supervision because of cognitive impairment that impedes ability to function; or (c) need constant supervision because of behaviors that are dangerous, disruptive, or difficult to manage. Individuals meeting one or more of these criteria, regardless of the underlying disease or disabling condition, would be eligible for benefits.

In proposing these standards, the Commission recognizes the states' success in developing tools to target services to those most in need. In fact, many states already use functional status measures for nursing home screening and for determining eligibility for home and community-based care. 1. 2 Development of these tools is an evolutionary process, however, particularly in the areas of measuring cognitive impairment and children's disabilities. The Commission expects these assessment tools to be refined and become more precise over time.

The Commission favors use of common eligibility standards for in-home and nursing home care. Nevertheless it is concerned that some individuals who would not meet the disability criteria might require nursing home care for other reasons, such as lack of social supports or medical problems not necessarily associated with functional disability. Analysis of data on nursing home residents and states' experience in screening nursing home admissions indicates that the vast majority of current nursing home residents would be eligible for benefits under the public program. To avoid displacing current residents, the Commission recommends that all persons in nursing homes when the program begins be considered to satisfy the program's disability requirements. 3

The Commission expects that the proposed plan would indirectly benefit those who need long-term care but who are not so severely disabled as to qualify for the new public program. Encouraging the expansion of home care services, coupled with minimum federal standards for managing care and ensuring quality, would make available more and better services for the entire long-term care population, not just for the severely disabled.

How People Become Eligible

Severely disabled individuals face different circumstances. With public support, some will be able to manage at home by themselves or with the help of their families and friends. Others will need nursing home care. To ensure that people obtain services and receive care in settings that are appropriate to their needs, are fully informed about their options, and have an opportunity to choose the kinds of services they prefer, the Commission believes that everyone seeking services should enter the public program through the same process.

The Commission recommends that a federally certified state or local government or nonprofit assessment agency determine people's eligibility for the public program. Assessors would determine whether people satisfy the disability criteria. As appropriate, people would be directed to case management agencies, described below, which would help them identify and obtain the services they need if they prefer to remain at home. The assessment agency would help those who need nursing home care find an appropriate placement.

The Commission chooses not to prescribe the specific auspice or the types of professionals who should conduct assessments. In many communities, social workers or nurses are responsible for client assessments. Other programs use geriatric assessment teams,

which frequently include a physician as well as nurses, social workers, and other professionals such as physical therapists. Still others use less credentialed persons who have been trained specifically to conduct assessments. The Commission recommends preserv ing this flexibility within adequate federal guidelines, which at a minimum include requirements for adequate training.

To ensure uniformity within and across states, the Commission recommends that the assessment agency use standardized assessment criteria. Such standardization is already in place in state programs that provide extensive home and community-based care.

In addition to the disability assessment, the federally certified agency would be responsible for the financial assessment of individuals requesting federal subsidies for copayments. At the appropriate time, it also would conduct the financial assessments of people with nursing home stays longer than three months to determine eligibility for public benefits. Conducting financial assessments in an agency that serves all beneficiaries, regardless of income, is consistent with the Commission's intent that the program avoid any welfare stigma.

Benefits and Financial Responsibilities

The kinds of public support people receive and the nature of their financial obligations would depend upon whether they are at home or in nursing homes. The administration of home care benefits under the Commission's plan is designed to tailor services to people's particular needs and preferences and to ensure that public resources are used as efficiently as possible. Nursing home benefits are designed to depend on how long people stay.

Home and Community-Based Care Benefits-Individuals determined to be severely disabled by the assessment agency would be eligible for the services they need to survive. Benefits are intended to complement support that families provide and to help disabled people continue functioning at the highest level of independence of which they are capable. Services would be available to severely disabled people living in board and care facilities and other types of assisted living as well as to those living in private residences.

The Commission recommends that public program benefits encompass at least the following: a broad range of personal care services including feeding, transferring, and tasks related to personal hygiene; homemaker/chore services (such as meal preparation, laundry, housework, transportation); medication management; and,