A Medicare Long-Term Care Benefit?

Public opinion surveys show that most Americans incorrectly think Medicare pays for long-term supports and services (LTSS). It does not. But should it? Should Congress add a long-term care benefit to the program’s current package of insurance for hospital care, doctor visits, and drugs?

Three highly respected health researchers, Karen Davis, Amber Willink, and Cathy Schoen, think it should. In a blog post for the journal Health Affairs, they’ve proposed Medicare Help at Home. It has three elements:  A limited benefit for support at home, a new health delivery model called an Integrated Care Organization that would provide both medical care and LTSS; and team-based home care.

I really like their delivery system reforms. I’m not so sure the new Medicare benefit is the most effective use of limited government resources or new tax dollars. But let’s look at each idea:

Medicare Help at Home: The basic framework for their plan is a new Medicare long-term care benefit. It would provide a maximum benefit of about $400-a-week that could be used for a wide variety of home-based services. Participants would become eligible for benefits if they have severe dementia or need help with at least two activities of daily living, such as bathing, eating or dressing (the same trigger used by private long-term care insurance).

Beneficiaries would pay for part of the cost of this care, based on their income. Low-income recipients would pay 5 percent co-insurance, while those with the highest incomes would pay half out-of-pocket. The authors figure the rest of the added benefit could be financed with a $35 monthly premium and a payroll tax increase of about 0.6 percent (employees and employers would each pay half).

Integrated Care Organizations: These would look something like Accountable Care Organizations, which are networks of doctors, hospitals, and other providers that are responsible for providing a full range of medical care to member patients. But unlike ACOs, which focus entirely on medical treatment, ICOs would also provide long-term supports and services for patients living at home.

Medicare beneficiaries would pay less out of pocket for their new Help at Home benefit if they enroll in an ICO. The ICOs would not only receive financial incentives for improving health outcomes and reducing hospitalizations as ACOs do, but also for preventing or delaying stays in nursing facilities. They’d also be required to meet tough quality standards (though those measures are still being developed).

This idea of fully integrated care isn’t new. PACE programs have been doing it for years. Dr. Joanne Lynn at the Altarum Institute has proposed a similar model called Medicaring. And some managed care organizations are combining medical care and long-term supports into a single benefit as part of state-based demonstration programs for those eligible for both Medicare and Medicaid (the “dual eligibles”).

Care delivery:  The authors also propose delivering this care in a team-based, patient-centered model that focuses on improving quality of life and reducing hospital or institutional care. The ICOs would be encouraged to adopt some of these models.

While there are lots of details to work out, the ICO and delivery reform models make a lot of sense. Better integrating medical and long-term care is long overdue. The Long-Term Care Financing Collaborative (I was a member) made similar proposals last July and again in February. In Medicare, this could be done lots of ways, including Medicare Advantage plans, Special Needs Plans, or the new ICOs.

What about creating a new Medicare benefit? There are obvious advantages to adding long-term supports to a well-accepted program such as Medicare. But there are some important budget issues: The rest of Medicare falls far short of paying for itself and a big chunk of its funding comes from general tax revenue. Many fear an expanded program would only make matters worse, though Davis, Willink, and Schoen say their plan would be self-funded.

The Collaborative also looked at a similar Medicare expansion but, in the end, preferred a different idea: a universal public catastrophic long-term care insurance program. Why? In part, because neither the Medicare model nor private insurance addresses true catastrophic costs we felt that new tax dollars would be better targeted to benefits unavailable elsewhere (except Medicaid for the impoverished). In addition, some of us felt that insurance—especially with a cash benefit—would provide much more flexibility for consumers than Medicare.

While we may have different perspectives, we all have the same goal: To improve and better integrate LTSS and medical care. And to that end, Davis, Willink, and Schoen have added another important idea to a healthy debate.

 

 

 

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