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Chapter 4

Blueprint for Long-Term Care Coverage for All Americans

Chapter 4

Blueprint for Long-Term Care Coverage for 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 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 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.

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.

In the absence of insurance protection, becoming disabled means inadequate support for millio 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.

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.

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;

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.

and

• Assure quality

consumer protection.

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

care

and provide for

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

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.

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.

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

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.

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.

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 rehabilitative care.

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 couplesand 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.

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.

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

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

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