A Long Term Care Win for Everyone

Why is it so important that Florida has won a $35.7 million health reform act grant to participate in the federal “Money Follows the Person” program?

A recent news story provides the answer.   It tells the story of a 20-something Florida resident who is a quadriplegic living in a nursing home.  He doesn’t want to live there.  But he doesn’t have a choice.  It’s the only option for which the Florida Medicaid program will pay. 

We hope he’ll be alive for many years.  A back-of-the-envelope calculation suggests that the cost of his care could approach $4 million by the time he is 65.

A December, 2009, AARP Long Term Care Brief showed that Florida spent 86% of its Medicaid long term care dollar on institution-based services.  It spent about half the national average on home and community-based services (HCBS).

The “Money Follows the Person” program offers a low cost remedy. 

Enacted in 2007, the program has already provided over $1.4 billion to 30 states.  It has helped over 30,000 people transition from nursing home care to lower-cost community-based care.    

The result is improved well-being, greater independence, and more productivity at lower cost.  Not just young people benefit; many older Americans with chronic conditions also prefer living at home.

Wildly popular, the program was re-authorized by the Affordable Care Act.  It was extended for several years and expanded to allow more states to participate.  By accepting the new federal grant, Florida will be one of them. 

In spite of the bluster that Florida would refuse to implement any of “Obamacare,” AHCA and the Governor saw the wisdom of pursuing this piece aggressively. 

Florida may have come late to this party, but better late than never. 

The cost of long term care is one of the biggest drivers of the increase in health care costs in our country.  A majority of our population has one or more chronic conditions.  These conditions are often diagnosed and monitored using expensive medical tests.  They are managed with costly pharmaceuticals.  People with them often need physical and occupational therapy and other supports.  Treatment costs may rise in the future, because genetic therapies are on the horizon.

In a recent issue brief on Medicaid and long term care, the Deloitte Center for Health Solutions noted that Medicaid expenditures are projected to increase by 7.5% per year, largely due to the increase in the numbers of elders and others with chronic conditions on the program.  Examining Florida and nine other states, Deloitte estimated that the percentage of state resources devoted to long term care could double over the next twenty years. 

Controlling long term care costs should be a priority for everyone.  However, this isn’t always the case.  The report noted with concern that states are cutting back on lower-cost community-based services covered by Medicaid, instead of increasing them.

That’s what makes the “Money Follows the Person” program so important.  It helps expand community-based services, at a time they are sorely needed.

Florida’s action also serves as a reminder that the Affordable Care Act isn’t one big government health care program.  It is a collection of smaller, independent initiatives that affect many different components of our health care delivery system.

Another provision of the Act – the creation of the CLASS Long Term Care Insurance program, effective in October, 2012 – is also aimed at changing the way we finance long term care in the future.  It will make more private long term care insurance available for home and community-based care.  My wife and I purchased long term care insurance policies several years ago, when we were in our early 50s and healthy.  Unfortunately, many others wait until it’s too late. 

The HHS National Clearinghouse for Long Term Care Information notes that over 70% of us will need long term care services at some point in our lives.   HHS Secretary Sebelius has pointed out that one in six people who reach the age of 65 will spend over $100,000 in their lifetime on long term care.  The total cost could be upwards of $5 trillion.  The government can’t pay all this.  Private long term care insurance will be needed.    

However, as the planning for the CLASS program is unfolding, people who develop serious chronic conditions before applying for long term care insurance may be out of luck.  To keep insurance costs affordable, HHS is considering limiting the program to higher wage-earning, healthier people at the start. 

That means Medicaid will remain the main long term care payer for the foreseeable future. 

The more it can do to help 20-somethings stay in the community and be productive, the better off we all will be.  This is a health care reform with which no elected official should disagree.