Long-Term Care Financing Must Be Part of Health Care Reform

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Long-term care financing reform must be included in health care reform. Most Americans are not insured for long-term care, which can cost hundreds of thousands of dollars. This article is written by Kathryn Roberts, president and CEO, Ecumen, the most innovative leader of senior housing and services, empowering individuals to live richer and fuller lives. Kathryn also serves on the board of the American Association of Homes and Services for the Aging

Kathryn Roberts, President and CEO of Ecumen

Long-term care financing reform must be included in health care reform according to this article by Ecumen CEO Kathryn Roberts. Ecumen is the most innovative leader of senior housing and services, empowering individuals to live richer and fuller lives. Kathryn also serves on the board of the AAHSA, which created The Long-Term Care Solution.

Most American adults are uninsured for long-term care and supportive services, such as home care or an assisted living community, meaning many of us cannot afford the cost of a longer life or long-term disabilities. Long-term care services and supports must be part of meaningful health care reform.

In public policy, payment and perception, we've mistakenly segregated acute care and chronic care. For example, if someone over 65 suffers a stroke, Medicare jumps in with procedures and payments attempting to save the person. But upon release from the hospital, Medicare ignores that person's less expensive, longer-duration supportive services. Nor does it pay for such things as Alzheimer's care or other intensive long-term care that a young adult with a disability may need.

Nearly 70 percent of those who turned 65 in 2005 will need some long-term services. The average time: three years. Contracting with a home aide just three days per week for 2-3 hours at a time to provide basics such as meal preparation and help with dressing can easily cost $1,000 to $2,000 per month. Nursing home care is much more expensive. The average annual cost for a private room in the U.S. is more than $75,000.

The status quo means many will continue impoverishing themselves and turning to Medicaid - a government program and de facto long-term care provider. Primarily paying for institutional care, its "payments" already fall far short in meeting true costs. Without financing reform, we're simply cost shifting and avoiding the main issue - finance reform for longevity and chronic care.

For example, it's expedient to say that families should provide more care. But most families can't afford to or they impossibly juggle between care giving and their other full-time job, shortchanging both. Another expedient approach is simply cutting Medicaid further and reducing such things as at-home services. But that contributes to a more expensive volley between home and the emergency room.

Our country's overriding goals should be empowering people to live in the most independent setting possible; transforming nursing homes into right-sized, very specialized chronic care centers that contribute to a well-coordinated lifetime of care; taking a personal share in costs of chronic care and supportive services; and ensuring a strong safety net for people who never will be able to pay for such care and services.

If America were creating a chronic care system today, we'd never make Medicaid the primary payer. We'd never require people to impoverish themselves to get coverage. And we'd never rely simply on hope, hope that people would purchase private care policies. We'd create a solution balancing personal responsibility and a secure safety net.

The CLASS Act (Community Assistance Living Services & Supports) introduced by the Senate Committee on Health, Education, Labor & Pensions is that opportunity. In the opt-out insurance plan, people would pay a premium of approximately $65 per month in return for a minimum daily benefit of $50 that they can self-direct. It would make private wrap-around insurance policies appealing because consumers would easily understand what their dollars buy and they'd know such a product could guarantee quality of life and fiscal security. It also could gain a state good housekeeping seal from state or federal governments, further enhancing consumer confidence in such a product.

The Congressional Budget Office's evaluation of the CLASS Act shows no cost to the government over the next 10 years, a positive savings of $2.5 billion in Medicaid in the first 10 years alone, and long-term sustainability. This would transform financing of long-term services and supports, assist America's workers and future retirees, enhance intergenerational financial security, and promote choice and independence. Without a long-term care financing solution, America doesn't have true health care reform.

Kathryn Roberts is president and CEO of Ecumen. It is the most innovative leader of senior housing and services, empowering individuals to live richer and fuller lives. Follow Ecumen on its blog Changing Aging.

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Eric Schubert
Ecumen
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