Monday, October 17, 2011

Is paying for seniors’ long-term care more important than their medical care?

“HERE is the dirty little secret of health care in America for the elderly, the one group we all assume has universal coverage thanks to the 1965 Medicare law: what Medicare paid for then is no longer what recipients need or want today.”

So argues New York Times reporter Jane Gross in a provocative op-ed in yesterday’s New York Times. She makes the case that too much of Medicare is going to medical treatments and drugs of little value to the elderly, and nearly nothing on long-term care, citing the case of her own family’s experience:

“In the case of my mother, who died at 88 in 2003, room and board in various assisted living communities, at $2,000 to $3,500 a month for seven years, was not paid for by Medicare. Yet neurosurgery, I later learned was not expected to be effective in her case, was fully reimbursed, along with two weeks of in-patient care. Her stay of two years at a nursing home, at $14,000 a month (yes, $14,000) was also not paid for by Medicare. Nor were the additional home health aides she needed because of staffing issues. Or the electric wheelchair after strokes had paralyzed all but the finger that operated the joy stick. Or the gizmo with voice commands so she could tell the staff what she needed after her speech was gone.”

Ironically, two days before publication of Ms. Gross’s editorial decrying the lack of coverage for long-term care, the Obama administration announced that it had pulled the plug on the CLASS long-term care insurance program included in Affordable Care Act. This program would have provided small monthly payments to eligible persons to cover some of the costs of long-term care. ACA’s critics were gleeful about what they saw as “unraveling” of a “central” tenet of “ObamaCare.”

But these critics are missing the real lesson: unlike the other coverage expansions that are mandated by ACA, the CLASS program depended solely on voluntary, self-funded contributions by young people, for a small benefit (minimum of $50 a day) decades later. Voluntary, self-funded programs are usually favored by conservatives, but it was the voluntary nature of the CLASS program, and its very modest benefits, which led to the administration to determine that it was not fiscally sustainable. The rest of the ACA relies on a combination of individual insurance mandates, employer penalties, and expansion of government programs to make sure that everyone participates.

The CLASS program then is the exception that proves the rule underlying the rest of the ACA: if you want to expand health insurance coverage, you have to require that everyone participate, or the numbers just won’t add up. Robert Reich, former Secretary of Labor under President Clinton, puts it this way: “The lesson [from cancellation of the CLASS program]: If a public insurance system has minimum benefits and must pay for itself, it can’t be voluntary. Everyone has to sign up.”

The CLASS program’s demise doesn’t change the fact that there is an overwhelming need to find a better way to finance long-term care. Millions of adult children will soon find, if they haven’t already, that the costs of long-term care for their elderly parents is more than they can afford at the same time that they are providing for their own children. Millions of seniors in need of long-term care will find themselves having to dispose of all of their assets in order to qualify for Medicaid nursing home benefits, as Ms. Gross’s mother was forced to do “before winding up what she considered, with shame, ‘a welfare queen.’”

Ms. Gross’s plea for a better way to finance long-term care is right on the mark, but in a time of severe budget constraints, it seems like an impossible task. Ms. Gross suggests taking it out of unnecessary medical care routinely paid for by Medicare, which she says mainly benefits fee-for-service doctors and drug companies. While there is undoubtedly wasteful and inefficient care in the system, I don’t think most seniors (or their adult children, for that matter) view it as a choice between Medicare paying for medical care recommended by their doctor or having help in paying for their long-term care expenses. I don’t know what the answer is to financing long-term care, but at least we know that depending on voluntary premium contributions when people are young, for a very small long-term benefit many decades later in life, is not the solution. But neither is requiring families to bankrupt themselves or for seniors to have to give up everything they have earned over a lifetime to be poor enough to have their nursing home paid by Medicaid.

Today’s questions: Do you agree with Ms. Gross’s premise that Medicare should pay for long-term care by eliminating payments for much of the care provided by doctors and hospitals? And what does the CLASS program’s demise tell us about the effectiveness of programs that rely on voluntary contributions instead of mandated participation?


Joanne Lynn said...

As we grow quite old, we usually accumulate an array of health problems, along with some acquiesence in the fact of life's finitude. The priorities of people at that time of life tend toward comfort, dignity, meaningfulness, and often an interest in the well-being of descendents and community. About twenty years ago, I asked a sizable number of older elderly persons living in various US communities whether they would prefer a service package that emphasized services at home and reduced the tendency to use operations and life-extending treatments, which we called "Medicaring." If confronted with illness, most respondents wanted that course - even twenty years ago. I believe that we first need to "notice" frailty in old age and to accept that it might be "normal" to prefer highly reliable supportive services to most of the burdens of medical interventions at that time. Then, we need to work on a set of services and payment methods that would provide those excellent supportive services, with an attenuated proclivity toward medical interventions. I believe that most of us would prefer that "medicaring" approach when our time of living with serious disability in the last years of life comes upon us. And I believe that Medicare, Medicaid, and private assets must work together in an integrated way to achieve that. Otherwise, we will keep seeing the foolish endpoints of making it easier to get ICU care than to get Meals on Wheels, and easier to get plastic surgery for pressure ulcers than to get the home care support that would have prevented that terrible outcome.

Arvind said...

Bob, you answer your questions with your own words "mandates, employer penalties, and expansion of government programs". These being the tenets of any program should scare everybody. I beg you to show any democratic country that has succeeded with any national program that is based on mandates, penalties and government programs.

It is time for all Americans to accept that taxpayer subsidized programs will never be able to pay for either long term or short term care of anybody - seniors or others. The fake promises of Medicare and Medicaid have to end, and the leader that comes out with the truth will save America.

Allan said...

The enormous cost of long-term care for an individual becomes much more reasonable if it becomes a shared risk in which everyone participates in the risk pool (e.g. social insurance with mandatory participation) and if people are forced to start paying for it when they are young. Certainly sounds like Medicare Part A to me - what would be the cost of long-term care insurance if it were added to Medicare Part A?

David Ritchson said...

So what do you think will happen for health insurance plans or how will it affect the insurance system? Even though there are some discrepencies in terms of the Medicare system in America and how will it affect the boomers, I hope the insurance plan system won't get affected and be uplifted for the better for everyone.

Allen Bates said...

When I grow old I would want to be in a nursing home, I think that it would be fun.
nursing homes in nj

Unknown said...

My parents-in-law purchased long-term health insurance, to try and avoid burdening their children with their care and protect their savings for their children.Dad developed Alzheimer's in his mid-80's,he was able to be at home with family support. For 2 years of home help longterm insurance covered almost nothing. In the nursing home, the insurance paid a pittance--20%. It took a couple of years to spend down their savings before Dad died. When Mom got cancer, she only needed help for a short time, but it wasn't the long-term care insurance that paid for it.

My parents don't have long-term health insurance. My Mom has had Parkinson's Disease for 20 years and has been completely disabled for 5 years. They lived with us, and we bought extra help. When we couldn't manage any more, we didn't want to put her in a nursing home -- they are such an unhappy place to be. My mother was able to return to her home country of Sweden, one of those places with "socialist" health care. My 95-year old dad is the primary care giver to my helpless mother in their own apartment. Caregivers stop in throughout the day and night, often walking to work. Parents pay some, government pays some. MUCH BETTER AND MORE ECONOMICAL FOR EVERYONE.

- Thomas Rockford,

Unknown said...

I wasn't aware that both long-term care and medical care were required these days. This will really come in handy as we help my Grandma. We want to make sure she has the best home care first. Then we will figure out the health care as well.