Health Policy Brief No. 7
Summary: As the demand for long-term services and supports (LTSS) increases sharply, only a small percentage of the population that will need nursing or home care has coverage ahead of time through either a private plan or a public program. While a small percentage of people can self-insure, the challenge is to address the needs of the large group in the middle of the income distribution that faces a significant gap between the resources required to maintain their quality of life and what they can actually afford at the time they need care. The growing financial burden on state Medicaid programs means this will be both a political and a policy imperative. The current system provides assistance with LTSS on a means-tested basis, once people are already impoverished. A social insurance approach, in contrast, would allow people to spread risk and plan ahead for their LTSS needs. A universal compulsory program that spreads risk broadly could improve access to affordable services, relieve the burden on state Medicaid programs, and provide a mechanism for Americans to take greater personal responsibility for their LTSS needs.
This fact sheet is based on a longer paper of the same title ("Social Insurance: A Critical Base for Financing Long-Term Services and Supports") produced as part of a SCAN Foundation series on "Shaping Affordable Pathways for Aging with Dignity."