The Ripon Forum

Volume 0, No. 0

Oct - Nov 2007 Issue

Prescribing a Financial Fix for Post-Acute, Long Term Care

By on November 11, 2015 with 0 Comments


As we head into yet another Presidential race, it seems that every candidate is focusing on the need for health care reform and we have seen many proposals put forth into the court of public opinion. 

While the goals of fixing a troubled and ailing healthcare system are laudable, it is greatly distressing that no candidate has included long term care – no addressing skilled nursing care, assisted living, hospice, or home care – in their reform plans. This is why long term care professionals are actively engaged in bringing long term care issues to the forefront as part of the 2008 presidential debate. 

According to the U.S. Department of Health and Human Services, nearly 40% of all Americans will require nursing home care at some point in their lives. In addition, they estimate that by 2020, 12 million older Americans will need long term care services. These startling facts reveal one very important truth – that it is critical that policymakers address long term care reform now in order to prepare for America’s future long term care needs. 

As greater numbers of patients and residents enter our nation’s long term care system, it is imperative that our policymakers address America’s entitlement programs. Unfortunately, at present, nursing facility care is predominantly funded by the overextended Medicaid and Medicare programs. Currently, 80 percent of the patients and residents receiving care and services in the nearly 1.5 million nursing facilities nationwide rely on funding from one or both of these programs to pay for their long term care. This strain on the system, coupled with the need to care for an ever increasing number of patients, clearly points to the need to address these programs, and soon. 


As greater numbers of patients and residents enter our nation;s long term care system, it is imperative that our policymakers address America’s entitlement programs.

The American Health Care Association (AHCA), the National Center for Assisted Living (NCAL) and our nearly 11,000 member long term care providers believe that a comprehensive long term care system should promote and integrate a comprehensive array of public and private financing options that meet consumer and family needs and respond to their preferences.               

As long term care and post-acute care expenditures are expected to increase dramatically over the next fifty years due to the aging of the baby boom generation, the enormous financial pressure on federal and state budgets will continue to escalate. However, not only do state and federal governments need to plan for the future of long term care, but individuals must take personal responsibility in planning for their future care needs. 

First off, we must clear up misconceptions about how long term care is financed in this nation. Many consumers are under the impression that these services are automatically funded by Medicare, Medicaid or their traditional health care insurance. However, Medicare has a limited benefit for post-acute long term care and in order for Medicaid to fund an individual’s long term care and services, an individual must impoverish themselves. As well, many are unaware that health care insurance has no long term care benefit and that long term care insurance is a completely separate policy required to fund this type of care. 

Personal investment and future planning through the purchase of a long term care insurance policy is one step to take the pressure off Medicare and Medicaid in their role of funding long term care. In order to encourage such personal responsibility, incentives must be built in to the system. 

Through the Deficit Reduction Act of 2005, Congress took initial steps to encourage purchase of long term care insurance policies by expanding the Long Term Care Partnership Program by lifting restrictions that had limited the program to four states. The Long Term Care Partnership Program is a public-private partnership between states and private insurance companies, designed to reduce Medicaid expenditures by delaying or eliminating the need for some people to rely on Medicaid to pay for long term care services. This was a critical first step in the direction of personal investment in long term care and services, but we must do more. 

While this is an important effort to take pressure off the role of Medicaid in financing the long term care for millions of Americans, it must be complemented by efforts that build on the expansion of this laudable program. 

Earlier this year, AHCA, NCAL and the Alliance for Quality Nursing Home Care entered into a partnership to develop real solutions to this long term care financing conundrum. Working in cooperation, these groups have developed a comprehensive plan, the “Long Term Care and Post-Acute Care Financing Reform Proposal.” This includes workable, relevant policy proposals that meet the needs of patients while addressing the looming financing crisis 

AHCA, NCAL and the Alliance propose a new model for both financing and delivery of long term care and post-acute care that is sustainable, patient-centered, and lower cost. The proposal replaces the current patchwork financing with a voluntary federal system, increases private long term care financing, and rationalizes the post-acute and long term care delivery systems. Among other items, this model incorporates a new Medicare post-acute payment system to pay primarily based on the condition, needs and characteristics of the patient regardless of the post-acute care setting in which the patient receives care, and establishes a catastrophic federal long term care benefit which mandates individual commitment to planning and saving for their future long term care needs. A variety of vehicles may be used to meet this commitment including the purchase of an approved long term care insurance policy or investment in an approved savings vehicle dedicated for future long term care costs. 

We challenge the 2008 presidential candidates, as well as Congressional leaders and policymakers nationwide, to investigate the feasibility of such a plan – and look for ways to implement a program that effectively and proactively addresses the impending financing crisis in our nation’s long term care system. 

In these days and years leading up to the time when our Greatest Generation and Baby Boomers alike require critical long term or post-acute care services, it is imperative that providers and policymakers partner together to create real solutions to a real and growing healthcare concern.   RF


David Hebert is the Senior Vice President of Policy and Government Relations at the American Health Care Association.

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