With baby boomers beginning to turn 85, the nation can no longer afford not to protect individuals and families from the need for expensive long-term care. Strengthening Medicare by adding a home care benefit is essential to health security for Medicare beneficiaries and for family caregivers who now bear that personal and financial strain on their own. It is critical that we ensure that care is a national responsibility rather than a personal one and that it can be responsibly financed, in part, by redirecting overspending on prescription drugs to redress underfinancing for long-term services and supports.
The Medicare program is missing a piece and most Americans don’t realize it until they need it most. Eight in ten Americans either are unsure if Medicare covers long-term care or believe that it already does. Long-term services and supports (LTSS) are the help people need with basic tasks of daily life (like eating, bathing, and dressing) when they cannot perform them on their own. That help would be covered makes intuitive sense; like necessary medical care, it’s what they need to survive. But Medicare’s 1960s design never fully covered people’s health-related needs. Recognizing that fact, the U.S. Congress modernized Medicare by adding prescription drug coverage in the early 2000s. Other benefit improvements are also needed, but given the rapid aging of the population, Medicare cannot fulfill its promise of health security without coverage for LTSS.
The aging of our population is hardly unexpected. Ten thousand Americans are turning 65 years old every day, and the number of older adults over 85 years old (four in ten of whom are likely to need LTSS) is expected to more than double by 2040. Our strategies for meeting their care needs already fall woefully short; service to people who need it will only deteriorate without action.
How do people get care when they need it? For nearly every American, even those who are financially well-off, simply paying for services is out of reach. Americans’ lack of retirement savings is a major concern, making it unrealistic to expect financial “preparedness” for significant LTSS expenses. A private room in a nursing home costs more than $100,000 per year. And aging and disability care at home, where most people want to receive it, costs between $60,000 and more than $288,000 per year.
While 20% of people turning age 65 will likely need five or more years of care, over one-third will die without requiring any.
Even among people over age 65, the need for costly assistance is a risk, not a certainty. While 20% of people turning age 65 will likely need five or more years of care, over one-third will die without requiring any. The need for intensive, expensive LTSS is an unpredictable, catastrophic risk. For such expenses, we rely on insurance. Private insurance in this market, however, has failed to develop; private long-term care insurers offer fewer affordable options with meaningful protections today than a decade ago. And when people’s own resources are insufficient, it is Medicaid, not Medicare, that people rely on for help. But unlike other insurance, which protects us against financial catastrophe, Medicaid becomes available only after catastrophe strikes—only when people are impoverished or have exhausted their resources in purchasing care.
Further, Medicaid has historically emphasized nursing homes over care at home, where people want to stay; and its home and community-based services vary enormously from state to state. Many states continue to limit care with caps on enrollment or waiting lists, arbitrary limits on benefits, and such low compensation rates that agencies cannot attract or retain workers. Although Medicaid’s federal match is designed to provide more significant support to lower-income states than higher-income ones, federal support has never been sufficient to overcome the variation in state financial and budgetary commitments.
With paid care unaffordable, people who need care rely predominantly on family and friends to provide it. Over a hundred million people, 40% of American adults, are family caregivers. Although families value providing care, they often do so at enormous cost—in employment and retirement income foregone, and even damage to their own health. And reliance on family caregiving does not guarantee adequate care—whether because people lack family support or because that support falls short of meeting needs. Surveys show that lack of adequate support exposes people to risk of serious consequences—like going without bathing or eating, being confined indoors or in bed, soiling themselves, or experiencing other hardships—especially among those with significant impairments.
A support system that relies on unpaid family members and underpaid workers is simply not sustainable for the future.
A support system that relies on unpaid family members and underpaid workers is simply not sustainable for the future. Nor is reliance on variable state financing through Medicaid, especially as states experience different rates of aging and fiscal capacity. Equitable, adequate, and sustainable financing requires federal policy reforms and federal resources. It’s time that Medicare fulfilled its responsibility.
Other scholars have come to the same conclusion, laying out what they describe as a “very conservatively-designed” home care benefit for Medicare. They propose that Medicare offer a home care benefit—with eligibility contingent on an independent assessment of a need for assistance in two or more activities of daily living (like eating, bathing, dressing), benefits limited on a per person basis in a community (distributed to provide people with more significant needs more benefits), and income-related cost-sharing with a floor of income and asset protection to protect against impoverishment.
We propose a more inclusive approach—extending eligibility to those who need supervision or human assistance to “cue” the performance of basic daily tasks, required to support people with conditions like dementia or Alzheimer’s.
We propose a more inclusive approach—extending eligibility to those who need supervision or human assistance to “cue” the performance of basic daily tasks, required to support people with conditions like dementia or Alzheimer’s. We recommend some support to family members, whom many prefer as providers of care; and we would accompany a new benefit with significant investment in building the workforce—consistent with action recently taken by the Centers for Medicare & Medicaid Services to assure adequate wages and with congressional proposals like the Long-term Care Workforce Support Act (S. 4120, H.R. 7994). Such action would redress the undervaluing of “essential” direct care workers (who are disproportionately women and people of color) and ensure the new benefit could be delivered.
While this new benefit would not reach the full population in need of long-term care, paired with investments in Medicaid, it’s a good strong start—and, given our nation’s resources, clearly within our means. New federal costs will be offset by reduced federal (and state) Medicaid spending, as Medicare properly assumes the obligations Medicaid now bears. Using the federal cost savings from system-wide drug pricing negotiations as proposed in the Lower Drug Prices Now Act or Senate Finance Committee legislation led by Senator Ron Wyden (D-OR) would generate substantial resources, essentially achieving a win-win—lower drug prices for everyone alongside meaningful LTSS protections for Medicare beneficiaries.
Our failure to make Medicare “whole” by addressing LTSS needs is not about a shortage of resources; it’s about a shortage of political will. It’s time the nation stepped up.
Judith Feder is a professor at the McCourt School of Public Policy at Georgetown University. Nicole Jorwic is the chief of advocacy and campaigns at Caring Across Generations.
