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Expert Group Proposes Long-Term Care Financing Reforms

Expanding access to high-quality long-term care requires a multi-pronged solution, including a new public long-term care insurance program, improved Medicaid coverage of home and community-based services, and an expanded private insurance market.  These are among the recommendations of a just-released report by a diverse group of policy experts from across the political spectrum.

The shortcomings of the current long-term care financing system are well known.  The high cost of care can impose financial hardship on families.  Unpaid caregivers play a critical role but often pay a great economic and emotional toll.  Many people receive insufficient or inadequate care.

Efforts to develop a solution have so far come up short.  Health reform established a federal, voluntary long-term care insurance program, known as CLASS, but it proved impossible to design a financially self-sustaining program within the law’s boundaries, and lawmakers repealed the program.  A commission that Congress established to develop recommendations in the wake of CLASS’s repeal failed to reach a consensus.

The Long-Term Care Financing Collaborative, of which I’m a member, worked for over three years to reach agreement on ways to improve access to high-quality long-term supports and services for people at all income levels.  Here’s what we recommend:

  • A new universal, catastrophic long-term care insurance program.  Because the need for long-term care is a risk, not a certainty, it’s best handled through insurance.  And new research suggests that no voluntary insurance program will be broadly affordable. 
  • Modernized Medicaid financing and eligibility.  The program should offer home and community-based services on an equal footing with institutional care.  Income and asset limits for long-term supports and services should be modestly expanded using an income-based sliding scale.
  • Facilitated expansion of private long-term care insurance and retirement saving to finance those risks that catastrophic insurance or Medicaid don’t cover.
  • More support for families and communities that provide care.  That includes better training for both paid and unpaid caregivers and more flexible work arrangements for employees with caregiving responsibilities.

The Collaborative’s report offers a valuable guide for improving the financing of long-term care.  It can help move the issue higher on the political agenda, serve as the basis for developing detailed proposals, and ultimately lead to a legislative solution.