The COVID-19 pandemic has highlighted both the severe inadequacy and major inequities in our country’s caregiving infrastructure, including the high out-of-pocket costs of long-term services and supports (LTSS). For many families, care demands may become unmanageable, or manageable only at significant cost to family members’ health, well-being, income, and careers. This is especially true for women, who are most likely to be caregivers.
As part of President Biden’s $2 trillion American Jobs Plan, his administration is pushing for a $400 billion investment in the nation’s caregiving infrastructure over eight years. If the proposal is enacted, access to home and community-based care (HCBS) would be expanded via Medicaid, and direct care workers would receive pay raises, stronger benefits, and opportunities to organize or join a union.
The proposal is a step in the right direction, but challenges will remain.
What other policy options could leaders across the country pursue to address the caregiving challenges we face?
In a recent Associated Press article by Ricardo Alonso-Zaldivar covering Biden’s proposal, Academy CEO Bill Arnone emphasized how a Medicaid-focused approach leaves out the middle class unless they wipe out their assets. Many people assume Medicare covers long-term care, but it does not. In addition to strengthening Medicaid HCBS, a universal LTSS program could provide significant benefits for the American people.
States have made significant progress in launching and running universal LTSS programs:
Washington State enacted the Long-Term Care Trust Act in 2019 to create a public long-term care program that provides coverage based on a contributory social insurance model.
California, Michigan, Illinois and Minnesota are building momentum for the introduction of universal long-term care legislation.
Maine residents considered a ballot initiative to create a new LTSS program in 2018.
Hawaii enacted the Kūpuna Care Program in 2008. It makes limited LTSS available to non-Medicaid-eligible residents 60 or older, supporting them to continue living at home or in the community.
The Academy is continuing to work with Caring Across Generations to host a series of state-focused forums to support policymakers’ efforts to address caregiving needs. Links to recordings from forums in Oregon and California in 2019, and more recently, in Minnesota, California, Michigan, and Illinois may be found here.
More about the nation’s LTSS challenges
As the Boomer generation ages, the population at risk for LTSS needs is growing rapidly, while the younger generation of potential caregivers is growing more slowly. The U.S. faces a looming crisis in providing and financing sufficient care. The country needs an LTSS system that is affordable and meets the needs of those requiring support – including helping working-age individuals with disabilities and frail older adults preserve their independence and autonomy.
Medicaid is the primary payer for LTSS; however, there is a significant bias toward institutional care, such as nursing facilities. Under Medicaid, states are required to cover nursing facility care, but state coverage of most home and community-based services (HCBS) are optional. The pandemic has underscored the growing shift towards providing care in home and community-settings due to the outbreaks and high death rates from COVID-19 in congregate nursing homes and assisted living facilities.
Medicaid LTSS is available only on a means-tested, asset-tested basis for those at a certain threshold of financial and/or medical need. To qualify, many middle-income people “spend down” and use their assets to pay for care until they have very little left and qualify for coverage. Those who qualify for Medicaid (whether low or middle-income) must contribute most of their remaining income to their care costs, losing financial independence, and may be forced to enter a nursing home because they cannot access sufficient HCBS or afford to remain at home.
Direct care workers are critical resources for older adults and people with disabilities to live independently in home and community settings. Direct care workers are deemed essential during the COVID-19 pandemic but lack adequate compensation and benefits. Caregivers on average earn only $12 an hour and many do not receive health insurance or other benefits from their employers. There is an increasing need for direct care workers, but due to low compensation and challenging working conditions, there is a growing workforce shortage.
A universal long-term care program is a state or federal social insurance program to help individuals and families pay for LTSS without having to exhaust all their personal resources to access care. Many people will not have any need for LTSS, others will need it for a moderate duration, and a small number will face catastrophic expenses. As a result, the need for LTSS is difficult to plan for, threatens retirement security, and is well-suited to risk pooling through a social insurance program. A social insurance program is an efficient way to mitigate the financial risk associated with LTSS.
For more information about the Academy’s Caregiving work, please contact Bethany Cole, Policy Analyst, at email@example.com.