Long Term Care

Download a printable .pdf of Health Care and the 2004 Elections: Long Term Care.

IssueBackgroundOptions for Addressing Long Term Care NeedsAssessing Candidate Positions

Issue

Millions of elderly and disabled Americans need long-term care services and supports. The aging of the population in the United States over the next several decades is expected to increase the demand for long-term care services. The number of elderly persons in the United States is projected to increase dramatically, both as a percentage of the population and in absolute numbers, due in part to the aging of the baby boom generation and to increased life expectancy. Further, long-term care services are vital to individuals with disabilities under the age of 65 that may require a lifetime of care. Thus, identifying ways to ensure adequate access and financing for long-term care needs is an important policy concern.

Background

What is “long-term care”?“Long-term care” refers to a broad range of medical, social, personal care, and supportive services needed by people who have difficulty taking care of themselves due to chronic illness or disability, whether physical or mental. The need for long-term care is often measured in terms of the extent to which an individual needs help or supervision in performing basic “activities of daily living” (ADLs) such as bathing, dressing, using the toilet, eating, or performing household tasks such as preparing meals or managing money.

Who needs long-term care and where is it provided?Although the need for long-term care is greatest among the very old (i.e., those over age 85), individuals of all ages may need long-term care services. In 2000, an estimated 9.5 million people in the U.S. needed long-term care services, including 6 million elderly and 3.5 million who were under age 65. ¹ Most people who need long-term care services do not live in nursing homes. Instead, they are cared for in the community, living in their own homes, with relatives, or in non-institutionalized settings such as assisted living facilities. Four out of five adults who received long-term care services relied solely on unpaid help. ² Only one out of five received paid in-home help or were cared for in nursing homes or other institutional settings. ³ However, the chance of eventually requiring long-term nursing home care is high. For people who turn 65 in the year 2010, it is estimated that 45 percent will require some nursing home care, one-third will spend at least three months in a nursing home, and nine percent will spend five years or more. ⁴

How much does nursing home care cost and how is it paid for?The average daily cost of a private room in a nursing home in the United States exceeds $70,000 per year, or $192 per day. ⁵ Rates vary across the country, with the highest rates in Alaska (more than $200,000 per year) and the lowest rates in Louisiana (about $36,000 per year). The average length of stay in a nursing home for current residents is 2.4 years. As described below, most long-term care services (including extended stays in nursing homes) are not covered by Medicare, and few people have private long-term care insurance to pay for nursing home stays. As a result, most people who require nursing home care eventually exhaust their savings and become eligible for Medicaid, the federal-state program that covers the costs of health and long-term care services for the poor.

What is the role of Medicaid in financing long-term care?Medicaid is a major payer of long-term care services in the United States, accounting for 43 percent of total spending on long-term care in 2002. ⁶ It is also the major source of payment for three out of five nursing home residents. ⁷ In addition to nursing home care, Medicaid also pays for home- and community-based long-term care services. In general, federal law requires Medicaid programs to cover elderly and disabled individuals who have very little income and assets (generally up to $564 in income per month in 2004 for an individual and no more than $2,000 in assets). Federal law allows states to cover individuals at higher income levels, however, and most states do so. For example, most states provide assistance to the “medically needy,” defined as individuals whose spending for medical care is so great that it reduces their income to the level required to be eligible for Medicaid.

People in nursing homes who do not have sufficient financial resources or insurance to cover the costs of care usually “spend down” their assets until they become eligible for Medicaid. Once eligible, they are required to contribute all of their income toward the costs of their care, except for a small monthly personal allowance. The law also allows the spouse of an institutionalized person who remains in the community to keep specified amounts of income and assets to prevent the impoverishment of the spouse.

States are required by the federal government to pay for institutional care, but are not required to provide long-term care services in the community. However, all state Medicaid programs (except in the District of Columbia) have established programs under which some individuals who qualify for Medicaid financing of their nursing home care may instead receive assistance in home- and community-based long-term care settings. The number of individuals who can participate in these programs is limited, however, due to cost constraints. Some states have established lower income-eligibility requirements for their Medicaid home- and community-based care programs than for nursing home care.

What is the role of Medicare in financing long-term care?Medicare, the federal health insurance program for the elderly and disabled, primarily covers physician and hospital-based acute care services and does not play a large role in financing long-term care. However, because it is difficult to draw a bright line between acute care and long-term care services, Medicare does cover some services that could be considered long-term care. For example, Medicare covers up to 100 days of nursing home care for patients needing skilled nursing or rehabilitation services following a hospital stay. Medicare also covers home health services, without limit, but only while patients require skilled nursing care.

What is the role of private long-term care insurance?Unlike insurance for health care services, relatively few people have private insurance for long-term care. Long-term care insurance is similar to life insurance in that premiums are largely determined by age. People will pay lower monthly premiums for policies purchased when they are younger than when they are older. For example, in 2002, a 50-year old who purchased a long-term care policy providing three to six years of benefits and protected against inflation paid an average premium of $925 a year; that same policy purchased by an 80-year old cost an average $6,791 a year. ⁸ Because the market for long-term care insurance is relatively small, and few policyholders have qualified for benefits, only 11 percent of the nation’s long-term care spending in 2002 was covered by private long-term care insurance. ⁹ However, as a result of changes in tax policy, discussed below, more people are buying private long-term care insurance policies. From 1988 to 2001, the number of long-term care insurance policies issued each year more than doubled, from about 300,000 to more than 700,000. ¹⁰

Options for Addressing Long Term Care Needs

Although proposals to address the nation’s growing long-term care needs are not foremost among current national policy concerns, many policymakers have supported various private and public sector strategies which, the sooner implemented, could help avert some of the mounting pressures associated with a growing population requiring long-term care services. Among the proposals that have been discussed are the following:

Private Sector StrategiesMany people view long-term care as an individual and family responsibility that should be part of general financial planning for future health and retirement needs. According to this view, the government should provide incentives for personal savings and for the purchase of private long-term care insurance, and public financing of long-term care services should be targeted only to the most needy individuals.

In 1996, Congress enacted several provisions intended to encourage the purchase of long-term care insurance. Congress clarified that long-term care insurance would be treated like health insurance for tax purposes, which means that benefits received are not taxable and premiums may be counted as tax deductible medical expenses. In order to be qualified, a long-term care policy must provide coverage for minimum benefit levels and meet certain consumer protection standards.

Some policymakers have proposed additional changes in the tax laws to encourage people to buy long-term care policies, and to encourage employers to provide long-term care insurance as an employee benefit. Other proposals would amend the tax code to encourage individuals to set aside money through tax-sheltered savings accounts, such as individual retirement accounts (IRAs) and health savings accounts (HSAs), to pay for long-term care expenses. Still other proposals would provide tax deductions or credits directly to families to help offset the costs of caring for a dependent relative at home.

Other policymakers note that private options tend to be less viable for those with modest means and they focus more on options that would expand Medicaid or Medicare to help meet the long-term care needs of an aging populations. They believe that tax incentives for private long-term care insurance primarily benefit those who are better off, providing less help to lower and middle income persons. They are also concerned about the potential that two systems of care could emerge – one for those with personal wealth or long-term care insurance and another for those without financial means who are being supported by public funds.

Public-sector strategiesSupporters of public-sector approaches view long-term care as a collective responsibility since all persons are at risk for needing long-term care. According to this view, the risk can best be shared through a social insurance system, like Medicare, which is supported by taxes and benefits are available to all when needed. A social insurance approach could be established by adding coverage for long-term care services to the existing set of Medicare benefits, or by including long-term care coverage in a comprehensive, universal health insurance program. Alternatively, a more incremental approach would expand some of the long-term care services available under the Medicare program.

Another strategy would be to build on the current Medicaid program to provide coverage for long-term care services to those with modest incomes. This could be done by either allowing or requiring that states extend coverage to those with incomes greater than allowed under current law. More incremental public-sector approaches are generally aimed at removing the “institutional bias” of state Medicaid programs and encouraging more home- and community-based alternatives to nursing home care. The impact on government spending would depend on how many more people seek community-based care and what it would have cost to provide their care in more traditional ways.

Those who oppose expansions of either Medicare or Medicaid generally argue that such approaches would be too costly to the government, given the increasing demands on public programs that will already occur with the retirement of the baby-boom generation.

Assessing Candidate Positions

On long-term care issues, most candidates do not advocate solely for private- or public-sector solutions, but instead support a combination approach. President Bush advocates changes in tax policy which would provide incentives for families to purchase long-term care insurance and encourage savings through HSAs. He also would provide some financial assistance to family caregivers by allowing them an additional tax deduction, and supports allowing those requiring long-term care, especially younger, disabled individuals, to have more flexibility in how they use government assistance to obtain care. Senator Kerry proposes to invest new federal funds to help states improve nursing home quality, provide more home- and community-based care through state Medicaid programs, and provide financial support for caregivers. Included below are a series of questions to help evaluate candidate positions on long-term care issues.

• What can be done to help families that are struggling with the cost of long-term care?
• Should Medicaid or Medicare be built upon to help meet the long-term care needs of Americans? If so, what specifically could be done to accomplish this and how this be financed?
• Should the government encourage people to buy long-term care insurance? If so, what kind of incentives should the government provide?
• Should employers be encouraged or required to offer long-term care insurance as a benefit to their employees, like health insurance?
• Should the government encourage people to save more to help meet potential long-term care needs? If so, what specifically could be done to accomplish this?

Prepared by Health Policy Alternatives, Inc

¹ O’Brien, Ellen and Risa Elias, Medicaid and Long-Term Care, Kaiser Commission on Medicaid and the Uninsured, May 2004, p.1. ² Ibid., p.2. (Georgetown University analysis of data from the 1994 and 1995 National Health Interview Surveys on Disability, Phase II)³ Ibid., p.2.⁴ Congressional Budget Office, Financing Long-Term Care for the Elderly, April 2004, p. 14.⁵ 2004 MetLife Market Survey of Nursing Home and Home Care Costs, September 27, 2004.⁶ O’Brien and Elias, p. 2 ⁷ Ibid., p. 4.⁸ Congressional Budget Office, p. 8.⁹ O’Brien and Elias, p. 3.¹⁰ Congressional Budget Office, p. 4

This new fact sheet summarizes Tennessee’s proposed waiver amendment to its TennCare program, which was submitted to the federal government in September 2004. The Kaiser Commission on Medicaid and the Uninsured is closely following waiver activity to provide information on how these waivers are impacting the uninsured and affecting Medicaid and SCHIP and the coverage provided to low-income beneficiaries.

Fact Sheet (.pdf)

Assessing Public Education Programming on HIV/AIDS: A National Survey of African Americans

A new national survey of African Americans reviews aspects of the Rap It Up and KNOW HIV/AIDS campaigns, which are ongoing HIV/AIDS public education partnerships conducted by the Kaiser Family Foundation with Black Entertainment Television (BET) and Viacom, Inc., respectively. The survey seeks to look at the reach and impact of the campaigns. Rap It Up is the single largest public education effort on HIV/AIDS and related issues directed toward the African American community.

Survey (.pdf)

Toplines

A new national survey of African Americans reviews aspects of the Rap It Up and KNOW HIV/AIDS campaigns, which are ongoing HIV/AIDS public education partnerships conducted by the Kaiser Family Foundation with Black Entertainment Television (BET) and Viacom, Inc., respectively. The survey seeks to look at the reach and impact of the campaigns. Rap It Up is the single largest public education effort on HIV/AIDS and related issues directed toward the African American community.

Assessing Public Education Programming on HIV/AIDS: A National Survey of African Americans

Survey Toplines

Race, Ethnicity and Health Care

Download a printable .pdf of Health Care and the 2004 Elections: Race, Ethnicity and Health Care.

IssueBackgroundRaising Public and Provider Awareness Expanding Health CoverageImproving the Number and Capacity of Providers in Underserved CommunitiesIncreasing the Knowledge BaseAssessing Candidate PositionsIssue

Racial and ethnic disparities in health care – whether in insurance coverage, access, or quality of care – are one of many factors producing inequalities in health status in the United States.¹ Eliminating these disparities is politically sensitive and challenging in part because their causes are intertwined with a contentious history of race relations in America. Nonetheless, assuring greater equity and accountability of the health care system is important to a growing constituency base, including health plan purchasers, payers, and providers of care. To the extent that inequities in the health care system result in lost productivity or use of services at a later stage of illness, there are health and social costs beyond the individual or specific population group.

Background

About 1 in 3 residents of the United States self-identify as either African American, American Indian/Alaska Native, Asian/Pacific American, or Latino. Few would disagree that for most of this nation’s history, race was a major factor in determining if you got care, where that care was obtained, and the quality of medical care. However, the influence of race today is more subtle. Public policy efforts, most notably the enactment of Medicaid and Medicare in 1965, along with enforcement of the 1964 Civil Rights Act, have made an enormous difference in reducing the health care divides in the U.S. So much progress has been achieved that many think that the disparities that remain are inconsequential, but they are not.

The Institute of Medicine (IOM) landmark report Unequal Treatment: Confronting Racial and Ethnic Disparities in Care provides compelling evidence that racial/ethnic disparities persist in medical care for a number of health conditions and services.² These disparities exist even when comparing individuals of similar income and insurance. Evidence of racial/ethnic disparities among patients with comparable insurance and the same illness has been the most troubling since health insurance coverage is widely considered the “great equalizer” in the health system.

The momentum to address health care disparities has grown largely in response to the step taken by the U.S. Department of Health and Human Services (DHHS) in 1999, establishing a national goal of eliminating health disparities by the end of this decade. Disparities between racial/ethnic groups and geographic areas were of major concern.³ The decision for the U.S. to have one set of goals for all Americans, rather than separate goals for the health of whites and minority populations, has helped to focus public and private sector attention on racial/ethnic disparities in the nation’s health and thus, health care system.

Policy Challenges in Addressing Health Care Disparities

Although attention to racial/ethnic disparities in care has increased among policymakers, there is little consensus on what can or should be done to reduce these disparities. The U.S. Congress provided early leadership on the issue by legislatively mandating the IOM study on health care disparities and creating in statute, the National Center on Minority Health and Health Disparities at the National Institutes of Health. Congress also required DHHS to produce an annual report, starting in 2003, on the nation’s progress in reducing health care disparities.⁴ These efforts have provided an important foundation for addressing health and health care disparities.

The IOM study committee for Unequal Treatment recommended the use of a comprehensive multi-level strategy to address potential causes of racial/ethnic disparities in care that arise from circumstances or interactions at the level of the patient, provider, and health care system. The recommendations point to four broad areas of policy challenges:

• Raising public and provider awareness of racial/ethnic disparities in care;
• Expanding health insurance coverage;
• Improving the capacity and number of providers in underserved communities; and
• Increasing the knowledge base on causes and interventions to reduce disparities.

Raising Public and Provider Awareness

Misperceptions about the nature and extent of racial/ethnic disparities in care add a level of complexity to efforts to address the problem. The public has a marginal, at best, awareness of racial/ethnic disparities in the U.S. health system. Over two-thirds (67%) of whites say they believe African Americans get the same quality of care as they do, and over half (59%) of whites say they believe Latinos get the same quality of care as they do.⁵ Not surprisingly, some of the misperceptions of the public are also found among physicians. The vast majority (69%) of physicians say that the health care system “rarely or never” treats people unfairly based on an individual’s racial/ethnic background.⁶ Among those who believe disparities exist, the most common perception is that they are largely a result of differences in patient characteristics – especially insurance, education, and personal preferences. This perception persists despite an abundance of studies that control for these patient level characteristics. Perceptions of a problem often influence the actions taken (or not taken) to change policy and practices. If the public or providers are unaware that a problem exist or misunderstands the nature of the problem, it is difficult to direct resources to address that problem.

Expanding Health Coverage

Race clearly matters in the U.S. health system, but so do many other factors – especially insurance coverage. Racial/ethnic minority Americans make up about a third of the U.S. population, but disproportionately comprise 52% of the uninsured – 23 million of the 45 million uninsured in 2003. When compared with the insured, the uninsured are less likely to have a regular doctor or to get timely and routine care, and are more likely to be hospitalized for preventable conditions. Differences in health insurance coverage across racial/ethnic groups are partially explained by differences in types of employment and eligibility for public programs. Like the general population under age 65, employers are a major source of coverage for racial/ethnic minority groups. However, Medicaid, a source of coverage for many of the nation’s poor and disabled, is an important safety net for about 1 in 5 nonelderly African Americans, American Indians/Alaska Natives, and Latinos and about 1 in 10 Asian/Pacific Americans and whites. Efforts are needed, therefore, to assure that existing sources of coverage, such as Medicaid, are not undermined while also working to expand sources of coverage for those who are uninsured.

Improving the Number and Capacity of Providers in Underserved Communities

Access to a racially and ethnically diverse mix of high-quality sources of medical care also affects disparities in care. Despite efforts to increase the number of health professionals in medically underserved areas, people of color are still more likely than whites to live in neighborhoods that lack adequate health resources. For example, 28% of Latinos and 22% of African Americans report having little or no choice in where to seek care, while only 15% of whites report this difficulty.⁷ Even among the insured, African Americans and Latinos are twice as likely as whites to rely upon a hospital clinic or outpatient department as their regular source of care, rather than on a private physician or other office-based provider.⁸

When health providers are geographically accessible, language and cultural barriers are sometimes a problem. About three in ten Latinos say they have had a problem communicating with health providers over the past year, and half of Latinos whose primary language is Spanish report language barriers.⁹ Medical interpretation services are among the strategies recommended by the IOM to reduce these barriers. To strengthen patient-provider communication and relationships, the IOM committee also recommended expanding the racial/ethnic diversity of the health professions workforce and developing provider training programs and tools in cross-cultural education. These recommendations are rooted in evidence that minority providers are more likely than whites to practice in minority and medically underserved areas, and that when patient and providers are of the same race there is greater satisfaction and adherence to treatment.¹⁰

Increasing the Knowledge Base

Although evidence of racial/ethnic health care disparities is substantial, the evidence-base for developing interventions to eliminate these disparities is limited. For example, one of the most controversial conclusions of the IOM report Unequal Treatment was that provider bias and stereotypical beliefs may play a role in clinical decisionmaking. More precise information about the role of bias and other potential causes of disparities will help when making decisions about how to allocate resources to eliminate disparities. Increasing the knowledge base will require routinely collecting and analyzing data on health care use across racial/ethnic groups. Data from national surveys, health insurers, and different health settings is needed to better understand the problems and impact of interventions. The lack of data on racial/ethnic minority groups other than African Americans is a major cause for concern. One reason we know so little about patterns of health care use of American Indians/Alaska Natives, Asian /Pacific Islanders, and Latinos is that we have not collected the data or have insufficient sample sizes in available data sources. Baseline and follow-up data across racial/ethnic groups is essential for monitoring purposes.

Assessing Candidate Positions

Attracting the votes of people of color has been a goal of both candidates in the closely contested 2004 election. Recent surveys show that communities of color place considerable importance on health care issues when casting their votes. African Americans are about twice as likely as whites to say that health care issues are important in deciding their vote, and about half of registered Latinos say that the cost of heath care and insurance will be extremely important to their vote.¹¹ Views also differ by race on government’s role in eliminating health care disparities. The vast majority (90%) of African Americans, as compared to 55% of whites, say the “federal government should be responsible for ensuring that minorities have equality with whites in health care services, even if it means raising taxes.” ¹² Such contrasting views contribute to the lack of consensus on how to address disparities in care.

The following questions will help you evaluate the candidates’ proposals for addressing racial/ethnic health care disparities:

• Who would gain coverage under the proposal? What segments of the population does the proposal target?
• What is the candidate’s general approach to reducing racial/ethnic disparities in health care?
• What is the candidate’s plan to raise awareness about racial/ethnic disparities in health care?
• What is the candidate’s proposal to expand sources of insurance coverage?
• What segments of the population does the proposal target?
• Does the candidate have a plan to increase prevention efforts for diseases that disproportionately impact communities of color?
• What is the candidate’s stance on directing funds specifically for training health care professionals of color to increase diversity in the healthcare workforce?
• What is the candidate’s plan to ensure cultural and linguistic competence in health care?
• How does the candidate plan to hold government agencies accountable for monitoring and addressing racial/ ethnic disparities within the health care system?

¹ Disparities in “health care” and in “health” are often discussed as if they are one in the same. A health care disparity refers to differences in, for example, coverage, access, or quality of care that is not due to health needs. A health disparity refers to a higher burden of illness, injury, disability, or mortality experienced by one population group in relation to another. The two concepts are related in that disparities in health care can contribute to health disparities, and the goal of the use of health services is to maintain and improve a population’s health. However, other factors (e.g., genetics, personal behavior, and socio-economic factors) also are major determinants of a population’s health.² Institute of Medicine, Unequal Treatment: Confronting Racial and Ethnic Disparities in Health Care, 2002. ³ U.S. Department of Health and Human Services, Healthy People 2010. pp:11-16. ⁴ U.S. Department of Health and Human Services, 2003 National Healthcare Disparities Report, 2003. ⁵ Kaiser Family Foundation, Race Ethnicity & Medical Care: Survey of Public Perceptions and Expectations, 1999. ⁶ Kaiser Family Foundation, National Survey of Physicians, Part 1: Doctors on Disparities in Medical Care, 2002; ⁷ The Commonwealth Fund Health Care Quality Survey, 2001 ⁸ Lillie-Blanton et al. Site of Medical Care: Do Racial and Ethnic Differences Persist? Yale Journal of Health Policy, Law, and Ethics, 2001. ⁹ Kaiser Family Foundation/Pew Hispanic Center, Health Care Experiences, Survey Brief, 2004. ¹⁰ Komaromy et al. The Role of Black and Hispanic Physicians in Providing Health Care for Underserved Populations. NEJM. 1996; Cooper-Patrick et al. Race, Gender, and Partnership in the Patient -Physician Relationship. JAMA. 1999. ¹¹ Talylor-Clark, K. et al. African Americans’ Views on Health Policy: Implications for The 2004 Elections. Health Affairs, 2003; Kaiser Family Foundation/Pew Hispanic Center, Health Care Experiences, Survey Brief, 2004. ¹² Talylor-Clark, K., et al. African Americans’ Views on Health Policy: Implications for The 2004 Elections. Health Affairs, 2003.

This comprehensive survey of people on Medicare, conducted in June and July 2004, assesses their attitudes toward the new Medicare drug law. This chartpack, issued in September 2004, presents additional analysis on the survey data, focusing on the views of people under age 65 with physical and/or mental disabilities.

Supplemental Chartpack (.pdf)

A new national survey of African Americans reviews aspects of the Rap It Up and KNOW HIV/AIDS campaigns, which are ongoing HIV/AIDS public education partnerships conducted by the Kaiser Family Foundation with Black Entertainment Television (BET) and Viacom, Inc., respectively. The survey seeks to look at the reach and impact of the campaigns. Rap It Up is the single largest public education effort on HIV/AIDS and related issues directed toward the African American community.

Toplines (.pdf)

Report

The Kaiser Family Foundation has put together a short Public Opinion Data Note analyzing recent polling about the importance of health care as an issue in the swing states for the upcoming November 2, 2004 elections.

Public Opinion Data Note (.pdf)

This issue brief prepared by researchers at the University of California at San Francisco and the Kaiser Family Foundation, analyzes changes in racial/ethnic and socioeconomic disparities in maternal and infant health in California in 1994/1995 and 1999/2001. The issue brief also reviews the policy implications of these differences and offers general recommendations for health care policymakers to consider in addressing health disparities.

Issue Brief (.pdf)

The Continuing Medicaid Budget Challenge: State Medicaid Spending Growth and Cost Containment in Fiscal Years 2004 and 2005

The 50-state annual survey of about budget conditions and Medicaid cost containment actions in FY2004-05 shows that all states plan more Medicaid cost-containment actions in FY2005.

Report (.pdf)