Financing long-term care with limited resources: combining the resources of the public and private sectors

Under Connecticut's recently implemented public/private partnership to finance long-term care, individuals will no longer need to impoverish themselves in order to receive Medicaid assistance. To encourage those people who can afford to buy a private long-term care insurance policy to do so, the state promises to shield one dollar in assets from Medicaid "spend-down" rules for every dollar a private policy pays out for Medicaid-covered services. This article describes the Partnership, shows how dwindling resources and budget constraints affected the development of this model, and then contrasts Connecticut's experience with that of other states and describes what can be learned from this demonstration.     

The Program of All-Inclusive Care for the Elderly (PACE)

Summary

This article examines the long-term care service system in the United States, its problems, and an improved long-term care model. Problematic quality of care in institutional settings and fragmentation of service coordination in community-based settings are two major issues in the traditional long-term care system. The Program of All-Inclusive Care for the Elderly (PACE) has been emerging since the 1970s to address these issues, particularly because most frail elders prefer community-based to institutional care. The Balanced Budget Act of 1997 made PACE a permanent provider type under Medicare and granted states the option of paying a capitation rate for PACE services under Medicaid. The PACE model is a managed long-term care system that provides frail elders alternatives to nursing home life. The PACE program's primary goals are to maximize each frail elderly participant's autonomy and continued community residence, and to provide quality care at a lower cost than Medicare, Medicaid, and private-pay participants, who pay in the traditional fee-for-service system. In exchange for Medicare and Medicaid fixed monthly payments for each participating frail elder, PACE service systems provide a continuum of long-term care services, including hospital and nursing home care, and bear full financial risk. Integration of acute and long-term care services in the PACE model allows care of frail elders with multiple problems by a single service organization that can provide a full range of services. PACE's range of services and organizational features are discussed.     

We've Looked at Care from Both Sides Now: The Effects of Alternative Evaluation Strategies on Study Conclusions

This study uses two studies about the role of managed-care programs in serving Medicaid long-term care clients in Florida to illustrate how different research designs can reach divergent conclusions. Two reports from different groups using essentially the same database to assess the impact of managed care on a group of older Medicaid clients served by a Nursing Home Diversion Program reached different conclusions. The report from Florida's Office of Program Policy Analysis and Government Accountability concluded that the Diversion program saved money, whereas the report from the Florida Policy Exchange Center on Aging at the University of South Florida reached basically the opposite conclusion. Both agreed that the capitation rate was too high. How the policy questions are framed and analyzed can affect the conclusions reached. A variety of factors can influence the apparent effects of programmatic interventions. Evaluations must take relevant confounding variables into account.     

Medicaid physician fees and the quality of medical care of Medicaid patients in the USA

When enacted in 1965, the original Medicaid legislation sought to finance access to mainstream medical care for the poor. I use data on visits to office-based physicians from the National Ambulatory Medical Care Survey in four years—1989, 1993, 1998 and 2003—to test the extent to which this goal has been achieved. Specifically, I test whether this goal has been achieved more in states that pay higher fees to physicians who treat Medicaid patients compared to states that pay lower fees. By comparing the treatment of Medicaid patients to that of privately-insured patients and by using state fixed effects, I am able to estimate the effects of changes in the generosity of Medicaid physician payment within a state on changes in access to care for Medicaid patients, therefore separating Medicaid’s effect on access to health care from any correlation between the Medicaid fee and other attributes of the state in which a patient lives. Using this method, I examine the effect of Medicaid fees on whether or not an office-based physician accepts Medicaid patients, on the fraction of a physician’s practice that is accounted for by Medicaid, and on the length of visit times with physicians. Results imply that higher Medicaid fees increase the number of private physicians, especially in medical and surgical specialties, who see Medicaid patients. Higher fees also lead to visit times with physicians that are more comparable to visit times with private pay patients.

The Effect of Long-Term Care Insurance on Home Care Use Among the Disabled Elders

Using the 1998?C2004 Health and Retirement Study, this study uses Cox??s model to explore the effects of private long-term care insurance ownership on first home care use among the disabled elderly. Results show that long-term care insurance ownership and Medicaid eligibility did not significantly increase the likelihood of using home care services, while income and homeownership lowered this likelihood. Functional limitation was the key determinant of home care use and those who lived with children were less likely to use home care services. Based on the findings, this study provides foundations for long-term care policies and long-term care planning programs.     

Controlling the supply of long-term care providers in thirteen states

Many states have responded to growing Medicaid long-term care expenditures by limiting the number of long-term care providers through certificate-of-need (CON) programs and moratoriums on new construction or certification for participation in the Medicaid program. This article focuses on the use of these policies in 13 states. Most of the 13 states control the supply of nursing home beds and hospital conversions with CONs or moratoriums, but they are struggling to adapt the role of supply policy to the growth of home health and residential care. As an increasing proportion of Medicaid long-term care spending goes to these nursing home alternatives, supply policy needs to keep pace with the changing provider market and the changing demographics of the consumer market if it hopes to ensure access to long-term care and control Medicaid expenditures.     

Florida's Efforts to Improve Quality of Nursing Home Care Through Nurse Staffing Standards,Regulation, and Medicaid Reimbursement

Between 1999 and 2007, Florida implemented two initiatives combining legislative, regulatory, and reimbursement strategies to increase nurse staffing levels in nursing homes to improve quality of care. Despite a $40 million incentive package allocated for direct-care staffing, per-resident-day staffing increased only after legislative requirements mandated minimum nursing hours per resident day. Total Medicaid expenditures grew by $1.1 billion over the 8 years; per diem rates increased 65% to reimburse providers' costs. Registered nurses' hours decreased, while licensed nurses' and paraprofessionals' hours increased. This article describes the impact of staffing policy changes, includes stakeholders' views about approaches to achieve quality outcomes, and documents state policy implementation efforts. Seven lessons from the implementation of state nurse staffing standards to improve quality of care outcomes are also presented.     

The Value of Adoption

ABSTRACT

Recent work shows that the governmental cost of adoption is about half the cost of long-term foster care for children whose birth parents' rights have been terminated. Because adoption is also associated with greater accumulation of human and social capital, the total savings to government in areas such as special education and criminal justice is of the same magnitude as the child welfare savings. The private benefit to adopted children in terms of additional income earned over their working lives is similarly large. In all, a dollar spent on the adoption of a child from foster care yields about three dollars in benefits.     

Financing reform for long-term care: strategies for public and private long-term care insurance

The way the nation provides for the financing and delivery of long-term care is badly in need of reform. The principal options for change are private insurance, altering Medicaid, and public long-term care insurance. This article uses the Brookings-ICF Long-Term Care Financing Model to evaluate each of these options in terms of affordability, distribution of benefits, and ability to reduce catastrophic out-of-pocket costs. So long as private insurance is aimed at the elderly, its market penetration and ability to finance long-term care will remain severely limited. Affordability is a major problem. Selling to younger persons could solve the affordability problem, but marketing is extremely difficult. Liberalizing Medicaid could help solve the problems of long-term care, but there is little public support for means-tested programs. Finally, universalistic public insurance programs do well in meeting the goals of long-term care reform, but all social insurance programs are expensive and seem politically infeasible in the current political environment.     

Resource Effects on Access to Long-Term Care for Frail Older People

Abstract

Access to long-term care depends primarily on personal resources, including family members and income, and on external resources, including Medicaid and Medicare. This study investigates how resources affect frail older individuals' access to long-term care, with a focus on Black and White widows. Data from the 1989 National Long-Term Care Survey is used, in conjunction with state-level Medicaid and Medicare reimbursement rates for nursing home and home health care, to estimate the likelihood of five types of care arrangements. Results show that children are a primary resource for unmarried individuals in maintaining access to informal care. Income effects are nonlinear in relation to nursing home care: increasing incomes below the mean income are associated with decreasing probabilities of nursing home care, while increasing incomes above the mean are associated with increasing probabilities of nursing home care. Income and Medicaid effects are interrelated, with nonlinearities associated with income having the potential to adversely affect some older persons' ability to access nursing home care.     

The impact by race of changing long-term care policy

Long-term care policy has evolved with little attention to racial differences in the need for and use of services. Using 1987 National Medical Expenditure Survey data on nursing home care, formal in-home personal care, and informal-only help, a model was created to show how different races would use each type of care if: (1) a universal home-care benefit was established, (2) existing Medicaid home-care benefits were ended, or (3) the income level for Medicaid eligibility was substantially reduced. Expanded community care benefits would primarily serve severely disabled older whites. Reductions in long-term care benefits or eligibility would disproportionately impede access to long-term care for severely disabled older African-Americans. These differences indicate that race must be taken into account in long-term care policy initiatives.     

We Can Run But We Can't Hide:

Long-term care costs are not covered to any significant extent by public or private insurance. As a result, nursing home patients often must use their entire life savings to pay for their care and once impoverished turn to welfare in the form of Medicaid, the federal-state health care program for the poor. Private-sector solutions, such as private long-term care insurance, should expand to play a larger role but cannot solve the whole problem by themselves. Reform of the Medicaid program to make the means test less onerous would be desirable, but this approach would retain the welfare stigma. What is needed is a public insurance program to which everyone would contribute and earn the right to benefits when they need them without having to prove impoverishment. Any public insurance program should leave a substantial role for the private sector. Public costs of a social insurance program would be high but not unaffordable, especially since society will incur most of these costs even without an expanded public program.     

Financing Reform for Long-Term Care

The way the nation provides for the financing and delivery of long-term care is badly in need of reform. The principal options for change are private insurance, altering Medicaid, and 110 FROM NURSJNG HOMES TO HOME CARE public long-term care insurance. This article uses the Brookings-ICE Long-Term Care Financing Model to evaluate each of these options in terms of affordability, distribution of benefits, and ability to reduce catastrophic out-of-pocket costs. So long as private insurance is aimed at the elderly, its market penetration and ability to finance long-term care will remain scverely limited. Affordability is a major problem. Selling to younger persons could solve the affordability problem, but marketing is extremely difficult. Liberalizing Medicaid could help solve the problems of long-term care, but there is little public support for means-tested programs. Finally, universalistic public insurance programs do well in meeting the goals of longterm care reform, but all social insurance programs are expensive and seem politically infeasible in the current political environment. The way the nation provides for the financing and delivery of long-term care is badly in need of reform. No other part of the health care system generates as much passionate discontent as does long-term care. At the heart of the problem is the absence of any satisfactory way to help people anticipate and pay for long-term care. The disabled elderly find, often to their surprise, that the costs of nursing home and home care are not covered to any significant extent by Medicare or private insurance. Instead, they must rely on their own savings or, failing that, turn to welfare in the form of Medicaid. At a national average cost of $40,000 a year for nursing home care, long-term care is a leading cause of catastrophic out-of-pocket health care costs for the elderly. In addition, despite the strong preferences of the disabled for home and community-based services, current financing is highly skewed toward care in nursing homes. While the debate over long-term care reform has many facets, it is primarily an argument over the relative merits of private- versus publicsector approaches. Differences over how much emphasis to put on each sector partly depend on values that cannot be directly proved or disproved. Some believe that the primary responsibility for care of the elderly belongs with individuals and their families, and that government should act only as a payer of last resort for those unable to provide for themselves. The opposite view is that the government should take the lead in ensuring comprehensive care for all disabled older people, regardless of financial need, by providing comprehensive, compulsory social insurance. In this view, there is little or no role for the private sector. Between these polar positions, many combinations of public and private responsibility are possible.     

Recent Developments in Aged Care Policy in Australia

Summary

A series of major reforms implemented through the mid 1980s sought to contain residential care and expand community care in Australia's long-term care system. While this goal has been maintained, a number of new policy initiatives followed the change of federal government in 1996. This article presents a systematic account of current policy objectives, implementation measures, and outcomes in three major policy areas: changing the balance between residential and community care, targeting in community care, and support for family caregivers. This analysis shows that while there have been shifts in emphasis from time to time, concerted policy efforts over the last 20 years have contained the growth of expenditure on long-term care and realized significant change in the service system.     

Lessons Learned from Programs for Unaccompanied Refugee Minors

SUMMARY

A policy for priority admissions and subsequent care of unaccompanied refugee entrant minors was established in 1978 in response to the influx of Southeast Asian refugee minors. This article describes the child welfare system's response and workers' experiences in meeting the needs of this population. Lessons learned can be applied to permanency planning for children from varying cultural backgrounds.     

Financing Long-Term Care: Examining Decision Outcomes and Systemic Influences from the Perspective of Family Members

This study examined financing long-term care from a micro-level family perspective. Qualitative analysis of interviews conducted with 45 families coping with paying for an elder's long-term care provided insight into what decisions were made as well as what factors influenced those decisions. Family members articulate systemic factors within and outside of the family system influencing three decision making outcomes: (a) using and preserving private resources, (b) Medicaid estate planning and (c) deciding not to decide. Case examples and a discussion of the emerging framework provide insight for researchers working to inform long-term care issues and for educational focused practitioners.     

The Program of All-Inclusive Care for the Elderly (PACE): an innovative long-term care model in the United States

This article examines the long-term care service system in the United States, its problems, and an improved long-term care model. Problematic quality of care in institutional settings and fragmentation of service coordination in community-based settings are two major issues in the traditional long-term care system. The Program of All-Inclusive Care for the Elderly (PACE) has been emerging since the 1970s to address these issues, particularly because most frail elders prefer community-based to institutional care. The Balanced Budget Act of 1997 made PACE a permanent provider type under Medicare and granted states the option of paying a capitation rate for PACE services under Medicaid. The PACE model is a managed long-term care system that provides frail elders alternatives to nursing home life. The PACE program's primary goals are to maximize each frail elderly participant's autonomy and continued community residence, and to provide quality care at a lower cost than Medicare, Medicaid, and private-pay participants, who pay in the traditional fee-for-service system. In exchange for Medicare and Medicaid fixed monthly payments for each participating frail elder, PACE service systems provide a continuum of long-term care services, including hospital and nursing home care, and bear full financial risk. Integration of acute and long-term care services in the PACE model allows care of frail elders with multiple problems by a single service organization that can provide a full range of services. PACE's range of services and organizational features are discussed.     

The importance of employer sponsorship in the long-term care insurance market

Medicare and Medicaid are major sources of long-term care payments and thus will bear much of the burden from the growth in long-term care service use. The large future demand for long-term care services is of great concern among policymakers due to its expense and the use of public program dollars. It is argued that the individual purchase of long-term care insurance can help alleviate the increasing financial pressure on public programs responsible for the majority of longterm care financing. However, consumers have shown little interest in insuring against the high costs of long-term care. This analysis examines the effect of several factors on the decision to purchase a long-term care insurance policy: knowledge and attitudes of long-term care insurance and the long-term care financing system, the perceived risk for longterm care, financial planning behavior, and the availability of long-term care insurance. The interim results indicate the factor most likely to affect the decision to purchase long-term care insurance is access to employer-sponsored long-term care insurance. This suggests tht the availability of affordable and high quality coverage is more important than demand-side factors such as awareness of long-term care insurance and a perceived greater risk for long-term care.