My wife Pam and I bought private long term care insurance about twenty years ago. It’s a pretty good deal.
For about $100 per month, we will someday – when we need it – be eligible for up to $200 a day toward either home health care or nursing home care. Add it up – it could save us hundreds of thousands of dollars as we age.
I’ve been a big supporter of long-term care insurance since I was a Connecticut State Legislator in the 1980s. But to be honest, it’s never quite gotten the traction it should have. One of the reasons is that when people are young and healthy, they aren’t thinking about what their long-term care needs might be thirty or forty years down the road. But that’s when premiums would be most affordable.
The bigger problem is that it’s really hard for insurers to predict the costs of long-term care that far in advance, too. The costs of care often far exceed those that are estimated way in advance. As a result, the policies that Pam and I have aren’t even offered anymore.
Congress knows how big a problem this is. The Affordable Care Act had long term care provisions in it when it was passed in 2010. But these provisions were quietly repealed a couple of years later when the federal government couldn’t figure out how to pay for the benefit.
This wasn’t the first time the government wrestled with how to pay for long term care. When it first passed Medicare in the 1960s, it specifically excluded long-term care benefits. It paid only partially for rehabilitation services for up to 90 days. For the rest, seniors and people with disabilities were pretty much on their own.
For people whose medical and other expenses finally plunged them into poverty, the federal government created a separate program – Medicaid – and shared the cost of this program with the states.
At first, Medicaid was primarily a payer of long term, nursing home care. Over the years, it expanded to cover some home care services – as long as they were medical in nature. This became a huge cost for the states. Medicaid became one of the largest program items in all state budgets.
And it could have been even larger. In the late 1970s, I worked as a paralegal with Connecticut elders, often helping them qualify for Medicaid benefits. But this was a proud group. Even though their taxes supported the program, they often didn’t want to be seen as needing an entitlement program (i.e., welfare) to survive. Many simply refused to apply for it until they had no other choice.
Then in the late 1980s Medicaid began to expand. It now covers a lot of services for families and children. That’s the Medicaid program that most people know today. But, still, most Medicaid budgets go to long term care services like nursing homes.
Here’s where we are today. Medicaid still only covers long term care services for the lowest-income elders and people with disabilities. Medicaid budgets are still huge drains on state taxpayers. The Affordable Care Act doesn’t cover most home care services. Neither do “regular” health insurance programs. And most people still don’t have access to – or can’t afford – private long term care insurance and therefore face huge medical expenses in their declining years that Medicare will not cover.
That’s a whole lot of problems.
Last week, Kamala Harris proposed something that could address all of them at the same time. She advocated adding a home care benefit to the Medicare program. A whole range of new services would become available for stay-at-home elders and people with disabilities. State budgets will be more under control, and state taxpayers will save money. Medicaid would still cover nursing home costs for the poorest of people, but states would save billions on home care costs.
The Medicare expansion would cost a lot. I’ve seen an estimate of $50 billion. But Harris has proposed a clever way to fund this. She says that we could simply allow Medicare to negotiate more drug prices, lowering prescription drug costs for elders – and everyone else – and fund the home care expansion that way.
But even if it did cost a bit more, it would still be a far better deal than we all have today. Good for her. And good for us. Make it so.
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