“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?