Senator Bob Corker (R-Tenn) warned today that long-term care financing is “a major train wreck” and “heading for a national crisis.” Corker, the senior Republican on the Senate Aging Committee, said he was very worried about the viability of private long-term care insurance and added , “there is no doubt there is a public sector role” in the future of financing long-term care supports and services.
At a time when the issue has fallen victim to partisan demagoguery (Exhibit A: the CLASS Act) Corker’s remarks, at a Senate Aging Committee hearing on long-term care, suggested an opening to build a consensus on future financing and delivery reforms.
Interestingly, Corker was speaking on the same day a House committee proposed completely eliminating the federal Social Service block grant program which, among other things, funds Meals on Wheels and other critical programs for the frail elderly living at home.
Corker was not the only participant in today’s hearing who was worried about private long-term care insurance. John O’Brien, Director of Healthcare and Insurance at the federal Office of Personnel Management, proudly told the panel that enrollment in the federal LTC insurance program rose 20 percent this year, to about 270,000 employees. But he also expressed concern that only one carrier bid for the federal contract in 2011 and that so many insurers have left the business.
Senators are eligible to enroll in O’Brien’s program but both Corker and Democrat Mark Udall admitted they had not. Udall, like so many consumers, said he keeps putting it off. Corker flatly said he “may not” buy.
Still, former Congresional Budget Office director Doug Holtz-Eakin said that private insurance needs to be part of the solution. He suggested finding ways to encourage businesses to include coverage in their benefit packages, adding new tax subsidies, and perhaps making enrollment automatic (which was also an element of the CLASS Act).
Witnesses at today’s hearing shared a wide range of views about how to improve care delivery. My Urban Institute colleague Judy Feder presented research showing that patients with both chronic disease and personal care needs account for an outsized share of Medicare spending. Much of those costs–and average of $16,000 per year for those enrollees–were for hospital and post-hospitalization care at home or in nursing facilities.
The key to both better outcomes and cost savings, Judy argued, is to improve care coordination and primary care and reduce hospitalizations. She suggested those who receive both Medicare and Medicaid benefits (the dual eligibles), might be better off if all their care was provided by Medicare.
But Loren Colman, Assistant Commissioner of the Minnesota Department of Human Service, argued that states, though Medicaid, ought to be given more flexibility to design care for this population. He argued, as I and others have, that the default option for Medicaid long-term care ought to be home care and not nursing facility care, as it is today.
States, he said, should not have to apply for complicated waivers to provide community care.
Bruce Chernof, President and CEO of the SCAN Foundation in Long Beach, CA, agreed. A goal, he said, should be to free the frail elderly from the “tyranny of bricks and mortar.” But, he said, home and community programs need to be well-organized, cost-effective, and accountable to care recipients and their families.
While there was little consensus at today’s hearing, the discussion was productive and pointed the way towards what could be some creative solutions for both delivery and financing of long-term care services.