The rollout of the Affordable Care Act (ACA) continues to dominate the noisy politics and media attention devoted to health care. But there is one important area of health system reform where there’s a remarkable and growing degree of nonpartisan and constructive debate quietly focused on solving problems—that concerns long-term care (LTC), including long-term supports and services (LTSS).
Stuart Butler, PhD
True, a new LTC program was deemed unworkable and stripped from the ACA after being signed into law. And last year’s Commission on Long-Term Care failed to reach agreement, spawning both official and alternative reports.
However, over the last couple of years several working groups have been formed, and studies published or launched, that should encourage optimism that the problems associated with LTC actually will be addressed. These problems include the weakness of the private LTC insurance market, the often devastating personal costs associated with a long stay in a nursing home, and the growing financial risk to public programs, particularly Medicaid.
One such promising initiative is being convened by the Convergence Center for Policy Resolution (disclosure: I serve on the Convergence board of trustees). This initiative has brought together a wide range of individuals and stakeholder organizations to explore consensus solutions. Meanwhile, the Bipartisan Policy Center has launched an LTC initiative intended to develop broad-based solutions. Several studies and reports from important organizations are also laying out the challenges facing Americans needing long-term care and exploring solutions, such as a report from LeadingAge, a trade group of nonprofit nursing homes and assisted-living facilities. Moreover, the Institute of Medicine is planning a major study focused on family caregivers and the challenges faced by these individuals on the front line of long-term care.
These and other efforts are already beginning to explore a range of interesting approaches that could become key parts of a comprehensive approach that just might win broad support.
For instance, insurance experts are looking at options for redesigning LTC insurance to make it a more attractive form of protection, in both price and coverage, particularly for younger households. Right now this branch of the insurance industry is struggling with low enrollment and unattractive risk portfolios.
An intriguing possibility in private insurance, more feasible thanks to the creation of exchanges under the ACA, would be products that combine traditional acute care coverage with an LTSS component. Such a combination makes more sense if individuals typically retain coverage from the same plan or insurer throughout their working life and into retirement (perhaps transformed into a Medicare Advantage plan). But generally it makes little sense today for plans to offer a medical/LTSS combination for Americans with employment-based coverage, because such households tend to switch plans often over a lifetime. So plans tend to focus on acute care needs rather than on covering support services or even housing assistance that could reduce medical costs later and improve an enrollee’s quality of life.
But with the ACA, individual plans offered through exchanges will become much more common and employer-sponsored plans could decline sharply over time. So it could become more sensible for plans to offer coverage that evolves over time, from an early emphasis on the needs of a young family to a later focus on the range of care and home-based services needed by seniors. This would be analogous to “life cycle” financial investment plans, where managers alter the investor’s portfolio to reflect the changing appropriate balance of risk and return that accompanies aging.
Similarly, with modest changes in the Medicare law, a medical/LTSS combination could become a common Medicare Advantage option.
Another promising area of exploration is coordinating medical care and LTSS, such as housing and social services, in ways that can achieve much better outcomes at lower total cost in a managed care setting. Many states are already going down this road by coordinating the care for individuals eligible for both Medicaid and Medicare. New York State is embarking on such a coordinated managed-care approach. And the state is also pushing further in finding even better ways to coordinate housing with medical care. The 2013-2014 New York state budget includes $86 million for supportive housing. New York believes that innovative capital investments in housing arrangements will achieve big savings in its Medicaid budget.
But New York has to experiment with its own money for this initiative because federal Medicaid rules do not allow Medicaid money to be used as capital funding for housing. Medicaid and Medicare will pay for knee replacements for someone living on the third floor of a Brooklyn walk-up, but not for building or reconfiguring apartments in ways that would save the state and federal government thousands of dollars in medical costs.
What might be done to encourage more coordination of services and integration of budgets to allow more cost-reducing flexibility? One way would be to modify federal law to permit waivers allowing states like New York to use Medicaid money for supportive housing. It would also make sense to permit greater flexibility for intermingling of funds for housing, health care, and social service to address LTSS objectives at less cost and with better outcomes. Scope-of-practice rules need to be modified or relaxed to enable support teams to provide services less expensively.
Today’s conversations about LTC are ranging over these and many other ideas. After many years—actually decades—in which any attention to LTC has been rare, short, and unproductive, those involved in the current discussion seem to be determined to stick with the issue and work for consensus. After the experience of the ACA, that is a refreshing and important change.
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