There is a widespread belief that seniors, in cahoots with shady lawyers and greedy children, hide their assets so they can receive Medicaid long-term care benefits.  It turns out that this image—sort of the greedy geezer equivalent of Cadillac-driving welfare queens—is largely an urban myth.

While some seniors undoubtedly find ways to transfer assets (everyone, it seems, knows someone who has—or at least thinks they do), new research paints a very different picture:  Most frail seniors and younger people with disabilities who receive Medicaid benefits were poor long before they ended up on program. They did not hide their assets because, in large part, they didn’t have any to start with.

The study, by Josh Wiener and colleagues at the research firm RTI International, was based on a national survey that allowed them to follow thousands of people aged 50 and over for 10-12 years.

Although the study did not explicitly look at the issue of asset transfers, it paints a fascinating picture of people who turn to Medicaid as they age. Josh’s paper, funded by the SCAN Foundation, follows them as they age, develop health problems, and eventually become impoverished.

Josh and his colleagues were studying a phenomenon known as Medicaid spend-down, the process where someone runs through their money until they become eligible for the means-tested program.

Medicaid provides long-term supports and services for seniors and people with disabilities, but only if they meet strict income and asset tests. Though the limits vary by state, single individuals generally must have no more than about $2,000 in financial assets (they can also keep their home and some personal property).

Over the period 1996-2008, about 10 percent of people who had not previously been on Medicaid became impoverished and ended up on the program.  Among those who were 65 or older at the beginning of the study, about 13 percent spent down.  Younger people were half as likely to do so.

Keep in mind that the study may understate the percentage of those who ultimately go on to Medicaid since it followed them for only 10-12 years.  By the end of the survey period, the youngest people were still only in their sixties and had not yet begun to incur heavy medical and long-term care costs. Often, that doesn’t happen  until people reach their early or mid-80s.

Only about half of those who became Medicaid eligible had used any long-term supports and services. That suggests many Medicaid recipients became impoverished due to high medical costs or other factors.

But the key story is that those who did spend down started with far fewer assets and income than those who did not. They were disproportionately minorities, unmarried, and poorly educated. Among those who became Medicaid eligible by 2008, the median value of their total assets a decade earlier (including housing but excluding IRAs) was only $33,000—just one-fourth of the total wealth of those who did not spend down.

Of those who spent-down to Medicaid, 85 percent had less than $112,000 in total assets (including home equity) a decade earlier. The median net value of their primary residence was just $17,000, and 60 percent had household income of less than $16,000.

In other words, most of those who spend-down to Medicaid due to disability or old age were barely hanging on long before becoming eligible for the program. This population didn’t give much away because they never had much to give.

Finding an alternative to Medicaid is a huge challenge for policymakers looking for solutions to the long-term care financing problem. This population has very few financial resources to pay for their own long-term care. Tapping into housing assets won’t help because they have little home equity. Most would never be able to afford long-term care insurance.

Of course, there are millions of others who are more solidly middle-class, and it may be possible to build new financial solutions for their long-term care. But Josh’s research shows that those who end up on Medicaid in frail old age or because they are disabled may have few other options.

America’s system for financing long-term care is failing, and the window for creating a payment system that works is rapidly closing. That was the conclusion of a morning-long expert session sponsored last week by the SCAN Foundation.

While the participants differed on specific solutions, most agreed on four key issues:

• The existing system for funding paid long-term supports and services is built on a wobbly three-legged stool: low private savings, an underfunded Medicaid program, and a hobbled private long-term care insurance market.
• The solution must include an affordable way for Americans to prefund their long-term care costs. This could include tapping financial assets or home equity, or buying insurance (either government, private, or some combination of both). Low-income people would require some form of safety net protection.
• Any future system should finance high-quality long-term supports and services that are well-integrated with medical care. This is especially important since recipients of care services suffer from chronic disease or injury that often requires complex medical interventions.
• There is currently no political consensus on how to do any of this.

That is where everyone agreed. Here is where they did not:

Several panelists focused on ways to enhance private insurance, where the market for traditional long-term care coverage has effectively collapsed. A paper by Marc Cohen of Lifeplans, Inc. and professors Richard Frank and Neale Mahoney of Harvard described a broad package of design changes that might make policies more attractive.

Their ideas include simplifying and standardizing insurance products, indexing premiums annually instead of requiring carriers to ask for big rate increases every few years, allowing insurers to sell high-deductible plans (where buyers could be responsible for as much as two years of LTC costs), and better educating consumers about the price of long-term care and the limited government resources available to pay for it.

They also propose industry-funded reinsurance pools that would protect insurers against unanticipated risks. Another suggestion: Require that companies over a certain size offer LTC insurance and force workers to buy unless they make an active choice to reject insurance. They also recommend new highly-targeted government subsidies, such as tax credits, to encourage moderate-income consumers to purchase long-term care insurance.

Finally, they suggest linking long-term care and health insurance, an idea I raised last year.

Several of their proposals, such as catastrophic coverage and standardized plan designs, are aimed at substantially lowering rates.

Expanding the role of employers may be especially critical since 80 percent of workers currently have no access to coverage through their jobs, according to a separate paper by Jeremy Pincus and colleagues at the insurance industry consulting firm Forbes Consulting Group.  Like Cohen, Frank, and Mahoney; Pincus also believes an employer mandate would significantly boost the number of workers who would buy LTC insurance.

But all that may not be enough. Other conference participants felt that even with these broad-based changes, voluntary private insurance would remain unattractive for many people. As a result, some sort universal coverage is the only way to make LTC insurance truly affordable for middle-income households. Voluntary insurance, even with reforms, would remain out of reach for tens of millions of middle-income people.

Anne Tumlinson of the consulting firm Avalere Health, Josh Wiener of RTI International  and their co-authors found that mandatory insurance would be significantly less expensive than voluntary coverage. Tumlinson said that maintaining the voluntary system would do little more than preserve the unworkable status quo.

Insurance officials tell me privately that, even in the best case, perhaps 20 percent of Americans would buy voluntary LTC insurance. Perhaps another one-third have lifetime incomes so low that they can’t be expected to pay for their own care, either through savings or insurance, and will need some sort of public support.

That leaves perhaps half the country at risk. The challenge for policy makers and the market is to figure out what will work for them. The SCAN program was a great start, but much more needs to be done.

Long-Term Care insurance too expensive? How about short-term care insurance?

In an attempt to make increasingly-costly coverage affordable for middle-class buyers, some insurers are selling policies that offer bare-bones personal care benefits—sometimes as little as $50-a-day for three months. These policies are more affordable, but are they worth the money?

Bankers Life and Casualty Co. has been selling these low-cost, low-benefit dollar policies for a decade, but Brian E. Millsap, Vice President of Product Management for Long Term Care, says they’ve taken off in the past few years and now outsell traditional LTC insurance at Bankers.  

To understand how they work, first think about those traditional policies. Millsap says a Banker’s LTC policy typically covers $145-a-day for an average of 2.7 years. That’s a maximum of about $143,000 in benefits. About half of its buyers also get inflation protection to help offset future increases in the cost of care. For the average Banker’s customer, who is 63, such a policy costs about $2,100-a-year. 

If that’s out of your price range, you’ll need to compromise. You could, for instance, buy an average daily benefit of $50 for life (the design of the now-dead CLASS Act). However, few private carriers offer lifetime benefits any more.

Since about 70 percent of claimants die within two years of receiving benefits, you could try an alternative: a big daily benefit for just a few years. But those can be very expensive as well. A $250-a-day, two-year policy with inflation protection would cost a 63-year-old about $3,500, according to one carrier.  

So how about a very short-duration policy with a low daily benefit? Keep in mind that this insurance, like traditional LTC overage, is not health insurance. You are eligible for benefits only when you need help with activities of daily living such as bathing or eating, not just because you are sick.

Millsap says an average short-term care policy from Bankers provides $140-a-day for just 220 days, or about 7 months. That’s about $31,000 in total benefits. 85 percent of buyers get no inflation protection. For a 63-year-old, the average annual premium is less than $750.  

That’s much more affordable, of course. And if you think you’ll be able to get care at home and will have family members to help, such a policy might pay for some important extra assistance from a home health aide. They may also be easier to buy if you have pre-existing medical problems since underwriting is less strict. Combined with enough savings, it might even get you access to a high-quality nursing home that might not take Medicaid patients.

But these policies come with some big disadvantages.

$140-a-day would fall far short of the $200-$350 you’d need for a nursing home stay so you’d need to make up the difference through savings or gifts from family members. In addition, by not buying inflation protection, steadily increasing costs of care will eat away at what is already a modest benefit. For instance, assuming 4 percent inflation, that $140 daily benefit will be worth only about $60 in 20 years—enough to pay for only about 3 hours of home care. 

If you don’t have other savings, or will need more than limited care, you’ll almost certainly end up on Medicaid. These policies may delay Medicaid eligibility for a few months, however, making the government program the biggest beneficiary of this insurance.    

Note: Short-term policies are not eligible for the Long-term care Partnership program, which allows people to preserve additional assets and still receive Medicaid benefits.

Another way to think about it: If you buy at 63, you may pay premiums for 20 years before going to claim. At $750-a-year for a $140-a-day, 220-day policy, you’ll pay $15,000 to buy a maximum of $31,000 in insurance (assuming premiums don’t go up).

One financial planner who specializes in middle-market clients is skeptical. He says these policies are “like buying a stuffed bear.” They may make you feel better, but they won’t provide any real financial security.

That’s especially true for the very low-end policies. After all, $50-a-day for 60 days is a maximum benefit of just $3,000, and that won’t buy much personal assistance. Buying $140-a-day for a year makes more sense, but you still need to think hard about what will happen when the benefit runs out.  

Nearly two months ago, Congress created a commission to recommend reforms to the current long-term care system. So what has happened since? Not much.

Leaders of Congress have appointed members to serve on the panel but President Obama—who has three of 15 picks– has not yet made his choices. The commission can’t select a chairman, find a staff, or set an agenda until he does, so for now the effort remains on hold.

Sources say the delay is mostly bureaucratic—it often takes the White House time to review background checks and run candidates through the usual political traps. 

The commission members picked so far are an intriguing mix. They include health and long-term care policy experts, three representatives from the nursing home and the senior service industry, two physicians, a union official, a philanthropist focused on finding a cure for Alzheimer’s disease, and a Medicare consumer advocate. Somewhat surprisingly, it has no members explicitly representing the views of people with disabilities, family caregivers, or the insurance industry.

As I have written previously, this commission will operate under severe constraints. It is supposed to address three big issues–long-term care financing, delivery, and workforce challenges. It has no budget so its staff will be made up of people detailed from Congress or the Administration. It has only six months to submit a report (the clock starts ticking once Obama discloses his choices). After Obama makes his picks, the panel will have nine members appointed by Democrats but only six selected by Republicans–a ratio that already has the GOP planning to play defense. Most troubling, Congress is not required to act on the panel’s recommendations.

Some optimists believe the commission can achieve some modest goals—by framing the importance of long-term care reform and perhaps by agreeing to small reforms. But others have much lower expectations.  

Who are its members?

Democrats have picked:

Javaid Anwar, a Las Vegas internist who is vp for health services at a large casino/hotel company and served as chair of Nevada’s Committee on Access to Health Care.  

Laphonza Butler, president of the Service Employee’s International United Long Term Care Workers’ union.

Bruce Chernof, a physician who is president and CEO of the California-based SCAN Foundation, which focuses on senior issues.

Judy Feder, my colleague at the Urban Institute who served as a senior health aide in the Clinton Administration and staff director of the 1989-90 Pepper Commission.

Judith Stein, founder of the Center for Medicare Advocacy, which represents beneficiaries in their disputes with the Medicare program.

George Vradenburg, a former media executive and founder of USAgainstAlzheimer’s—a non-profit that advocates largely for research dollars aimed at finding a cure for dementia.

The GOP picks are:

Judith Brachman, who formerly served as a housing official in the Reagan Administration and director of the Ohio Department of Aging, now chairs the Jewish Federation of North America’s Aging and Family Caregiving Committee. JFNA represents long-term care providers.

Bruce Greenstein, Louisiana’s Secretary of Health and Hospitals, who was formerly a senior official at the federal Department of Health and Human Services and managing director for worldwide health at Microsoft.

Stephen Guillard was CEO of several large skilled nursing facility operators including HCR ManorCare and was chairman of the Alliance for Quality Nursing Home Care, a trade group that represents large for-profit nursing home companies.

Neil Pruitt is chairman and CEO of UHS-Pruitt Corp, an integrated health care company, and board chair of The American Health Care Assn., the largest trade group representing nursing homes and other senior service providers.

Grace-Marie Turner is president of the Galen Institute, a free-market oriented public policy organization that focuses on health care issues.

Mark Warshawsky is a pension expert who directs retirement research at the benefits firm Towers Watson and was a senior official at the Treasury Department from 2004-2006.  

There are some impressive people in this group and a few who seem to have little knowledge of long-term care. They represent a wide ideological spectrum which, depending on the panel’s dynamics, could be an opportunity to find bipartisan consensus or, more likely, a recipe for gridlock. But the commission won’t be anything at all until Obama picks the last three members.        

Pope Benedict delivered an important message today: There comes a time for most of us when our bodies and minds weaken and we must change the way we live our lives. As with the Pontiff, it may mean giving up a demanding job. But for others, it may mean much more: Getting help with those activities we once took for granted.

This does not mean giving up life, of course. For many elders, retiring from a day job makes time for new interests and challenges. In our culture, that’s a choice that is made more acceptable by age (if you leave your job at 40, you’re a deadbeat or going through a mid-life crisis. If you leave at 70, you’re retiring).

And entire industries have grown up around the idea of productive aging, the third age, or all the other marketing euphemisms out there. Dr. Bill Thomas has a nice perspective on the choices we can make as elders.

But for most of us, the time will come when we need more help with life than we’ve been used to. For those elders suffering from chronic diseases, independence slowly takes on a new, and more limited, meaning.

As with Benedict, who is 85, this often happens in our 80s. On average, men at about 80 will face a year and a half of severe disability. Women can expect about three years of severe disability starting at about 82.  

It is that period when many of us will need long-term services or supports. It may be help bathing or dressing, cooking or going to the doctor.  And it may require the assistance of a family member or a paid aide, or perhaps require a move to a residential care facility or even a nursing home.

Two-thirds of those 65 or older will need some assistance before they die, according to a landmark 2005 study by Peter Kemper, Harriet Komisar, and Lisa Alecxih. One-third will need it for a year or two, but one out of five will require care for five years or more. Half of those 65 or older will spend no money on personal care, though that is often thanks to the help they get from family members who may make substantial personal and financial sacrifices. But one in six will need to set aside more than $100,000 (present value of 2005 dollars) for long-term care.

Pope Benedict will get the help he needs. But many of us will not have the resources for this care. We don’t have the community surrounding us that the Pope enjoys. Increasingly, we don’t have children, or our children live at a distance or are estranged. Few of us have the money to purchase aid. Half of Americans age 65-74 have financial assets of less than $65,000, though they’ll need nearly twice that on average just to pay for medical care in old age.

We think that Medicare will pay for our long-term care, but it won’t. Medicaid, which does pay (if you are impoverished and very frail), is under enormous financial stress. And private long-term care insurance is expensive and increasingly difficult to buy.

Thanks to Pope Benedict for reminding us that while old age can bring great joy, it can also bring frailty. With good diet and exercise, we may be able to delay the day disability comes, but short of sudden death we can’t stop it.

We can prepare for it though. And Benedict’s story is a reminder that we need to–as individuals, families, communities, and as a society.

On New Year’s Day, as part of the law that kept the nation from toppling over the fiscal cliff for two months, Congress quietly repealed the Community Living Assistance Services & Support (CLASS) Act, and created a new commission to recommend broad long-term care reforms that could affect financing, delivery and care workers.

I was, and continue to be, very skeptical about the commission’s ability to accomplish much. But after spending this week talking to Washington insiders, I heard several express the hope that the panel could at least achieve two important goals: Defining the problem and broadly framing future solutions.

Just getting a bipartisan commission of Congress to acknowledge the importance of the challenges facing those receiving long-term supports and services and their caregivers would be a huge step forward. Acknowleging that our current system of financing and delivering  this care is terribly inadequate would be another big step. And defining the roles of government programs such as Medicaid as well as private insurance would be yet another significant achievement.

Still, that would be a long way from proposing specific reforms–an accomplishment that seems far out of reach for this group. Members of the panel, as I noted last week, must be appointed by the end of this month and the commission has only six months after that to make proposals to Congress. The panel has no budget and will have to rely on staffers from Congress and the executive branch. Its make-up–nine Democratic appointments and only six GOP selections–almost guarantees partisan squabbling.

 Worst of all, even if the group could reach a consensus, there is no requirement that Congress ever vote on its plan.

Yet, several veterans of past long-term care battles in Washington are hopeful that this group can at least frame a future debate. I agree that it would be very valuable. And I hope they are right and I am wrong. But I’m not holding my breath.

The New Year’s budget agreement to avoid the fiscal cliff includes two key measures that could be critical to people receiving long-term supports and services and their caregivers. The first repeals the Community Living Assistance Services and Supports (CLASS) Act. The second creates a new national commission to develop a plan for better financing and delivery of long-term care services.

Unfortunately, there may be less than meets the eye to both of these long-term care provisions. The CLASS Act had already been abandoned by the Obama Administration. And the commission, sadly, seems like a classic congressional study, destined to gather dust on a bookshelf somewhere. 

The repeal of CLASS was hardly a surprise. The measure, a piece of the 2010 health reform law, was supposed to create a new national, voluntary long-term care insurance system. But it was roundly criticised by Republicans and had little support among Democrats.

Most important, actuaries found that, without substantial changes, the program’s premiums would be far too expensive for most buyers and projected it would be financially unsustainable. As a result,more than a year ago, the Obama Administration refused to implement the program. Its repeal was widely expected. The only real question was when and how would it be killed.

At first glance, the budget agreement includes an important trade-off–the creation of a national long term care commission. The idea of such a panel has been pushed for a couple of years now by Senator Jay Rockefeller (D-WV). 

The 15-member panel would include members appointed by the  White House as well as Democratic and Republican leaders of the House and Senate. Its ambitious goal: To “develop a plan for the establishment, implementation,and financing of a comprehensive, coordinated, and high-quality system that ensures the availability of long-term services and supports for individuals in need of such services and supports… and individuals desiring to plan for future long-term care needs.”

Panel members are to reflect the interests of recipients of care, their caregivers, providers, care workers, long-term care insurance companies, and state Medicaid officials.

It all sounds great–and long overdue. The country has not taken a comprehensive look at the long-term care needs of  frail seniors and younger people with disabilities since the Pepper Commission more than two decades ago. Yet, there are elements in the measure creating this panel that are very troublesome.

The first is that is it on very tight time frame. Members must be picked within a month and the panel must submit a proposal to Congress and the White House within six months after that. It is hard to imagine any group solving issues this complex in just six months.

Second, the commission would live in the bureacratic ether. It has no connection to the Department of Health and Human Services or any other federal agency. This can be good, in that it may avoid long-standing bureaucratic turf wars. But is more often bad, because it means the commission has no natural supporters inside an Administration.  

Finally, and most important, the law  includes no requirement that Congress ever actually vote on the panel’s recommendations. This is an old Washington trick, and one that usually consigns commissions such as this and their proposals to the policy dustheap.

I hope I’m wrong and this commission does tackle these critical issues. We’ll know a lot more when we see who is appointed to the panel. But I don’t have high hopes.

Slowly but surely, more people who receive Medicaid benefits for long-term supports and services are getting their care at home rather than in nursing facilities. Still, only about 3.3 million seniors and younger people with disabilities who require long-term care get such help at home—about 1 million more than in 2000.

Overall, the program now spends about $50 billion or 45 percent of its long-term care budget on home and community care, according to a new study by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured. A decade ago, it spent about $20 billion.  

Yet the number of people receiving home and community care, and the amount of money individual states put into that care, varies widely. For instance, in 2009 Medicaid spent an average of $15,371 per person on home and community care. But Illinois spent only about $5,200 while Tennessee spent more than $35,000.  

These big state-to-state differences are important, especially since both federal Medicaid spending and state flexibility may be key issues in budget talks over the next year. If lawmakers give the program less money but more flexibility, these state variations could widen considerably.   

Medicaid is the largest single payer of long-term supports and services, funding almost half of all paid long-term care. It dwarfs the benefits provided by private long-term care insurance or what people pay out of pocket. But the Medicaid program, run by the states but jointly funded by states and the federal government, is required to provide care only in nursing facilities.

States may also offer long-term services and supports to people living in the community but must first get federal permission. The feds also give them leeway in deciding how much care they fund and who gets it.    

Nearly all states have home and community programs, but many reduce costs by restricting eligibility or limiting benefits. For instance, some states limit participation (and save money) by setting more restrictive rules for those applying for home care than for those getting care in a nursing facility.

Another way states save money is to allow only a limited number of participants in home care programs at any one time. Others are placed on a waiting list. Overall, more than a half-million Medicaid beneficiaries were waiting for home and community care in 2011, 75,000 more than in 2010. The average wait was more than two years, which is especially problematic for the frail elderly, many of who are likely to die before reaching the top of the list.

These wait lists vary widely for different populations and among states. For instance, in California only about 1,300 people who were aged and disabled were waiting for home and community care in 2011. In Louisiana, a much smaller state, 27,000 were waiting, and in Texas almost 44,000 were on the list for home care benefits.

Most people who need supports and services want to get that care at home. And states say they want to deliver such care in the community. But, as the Kaiser study shows, many states are still reluctant to provide that assistance through Medicaid. Their home and community-based programs exist on paper, but often are often insufficient for the needs of the frail elderly and those younger people with disabilities who are trying to stay at home.

Last week, I wrote about an important new survey of family caregivers that shows nearly half are performing work that is often done by nurses, such as managing medications, caring for wounds, and operating medical equipment. The report, by AARP and United Hospital Fund, sheds important light on the often unrecognized role of these family caregivers. And it raises a critical question: What can be done to help them?

These caregivers acknowledge they are largely untrained, and many say they learned how to perform these difficult tasks on their own, or from a friend or neighbor. Few were taught by health professionals. Imagine if nurses in hospitals or nursing facilities were providing such care with informal training like this. It would be a major scandal. Regulators would shut down the facilities within hours.

Yet, 80 percent of  the frail elderly are getting their care at home, and not in a residential care facility. Family caregivers are the backbone of the support system for the frail elderly and younger people with disabilities. Yet, to be blunt, they often don’t know what they are doing.

The result: Those receiving care may needlessly be in pain or discomfort. They are at greater risks of falls, infections, or even drug overdoses. They may require more frequent hospitalizations. They almost surely cost the health system more money.  What to do?

Susan Reinhard,  Carol Levine, and Sarah Samis, the authors of the  AARP/United Hospital Fund study, make 10 recommendations. Many involve changing the culture of health care to acknowledge this role of family members. For instance, they suggest that doctors, nurses, and social workers take more responsibility for  family caregivers who are doing this work. They also urge that  hospitals, nursing homes, and home care agencies provide greater support for those clinicians and aides who interact with these families. 

More than anything, these families need explicit hands-on formal training and practical support. Sadly, there are only a few such programs around the country. The Schmieding Center in Springdale, Arkansas is one. The Congregational Health Network in Memphis, a venture of the Methodist LeBonheur Health System and hundreds of local churches, is another.  

Yet there are so many more opportunities.

Senior villages could be an entry point for these training programs, perhaps by partnering with local hospitals or nursing facilities. So could faith-based organizations.

Managed care companies could sponsor training programs. After all, if a well-trained family caregiver can help keep a loved one out of the hospital, the managed care company stands to profit.

Hospital discharge planning, which is often the broken link in the health care chain, needs to understand the role and the capacity of family caregivers.  Discharge planners should be identifying needed skills training begining with a patient’s admission. And hospitals ought to provide the resources to provide that training. With hospitals now paying financial penalties for excessive readmissions, this is a low-cost way to avoid those events.

Transitional care programs need to address these caregiver skills as well. These programs do a great job working with patients and family caregivers.  But few of them provide real hands-on training. They should.

Medicaid and private long-term care insurance policies should include caregiver training as a benefit. If this training can keep people out of nursing homes, it can be a cost-saver in the long run.

None of this is complicated. It is not that expensive. Yet it can immeasurably improve the quality of life of those receiving care and those family members who help them every day.

In the past few months, important events and circumstances have highlighted the need for an effective, sustainable way to finance the often-astronomical costs of long-term care services and supports. 

The growing political and financial pressures on Medicaid–the state/federal program that funds nearly half of all paid long-term care; the deepening problems in the private long-term care insurance market; and the demise of the CLASS Act–the failed attempt to create a national, voluntary long-term care insurance system– have all added urgency to what was already a problem that was growing with the aging baby boom population. 

Now, a valuable new e-book  describes the challenges of long-term care financing and suggests some potential solutions.  “Universal Coverage of Long-Term Care in the United States: Can We Get There from Here?” (Russell Sage Foundation 2012), was edited by Douglas A. Wolf  and Nancy Folbre and includes chapters by a broad range of highly-respected policy experts. 

The books asks whether a universal long-term care financing system is possible and imagines what some models may look like. There is nothing Pollyanish about it–the book recognizes the political and financial difficulties of reaching this goal. But it suggests that it is possible.

Carol Levine puts financing reform in the context of family caregivers, who are the bedrock of the care system. Robyn Stone looks at the issue from the perspective of the paid workforce. Robert Hudson reviews the broad history of long-term care in the U.S. and I contributed a chapter on the rise and fall of the CLASS Act.

David Stevenson, Marc Cohen, Brian Burwell, and Eileen Tell look at the private insurance market in the U.S. David Bell and Alison Bowes, Svein Olav Daatland, and Mary Jo Gibson study the experiences of long-term care financing reforms in Europe and Japan,

Finally, Len Burman analyzes the economic effects of long-term care financing reform in the U.S.

As the title suggests, this book focuses on the idea of universal insurance. But many different models can rise from a foundation of universal (or near-universal) coverage. Just think about Medicare, where only Part A is truly universal, while Part B and the Part D drug benefit are not, though participation is extremely high. And Medicare  includes traditional government insurance, supplemental coverage sold by private carriers,  and, increasingly, privately-issued managed care. 

There are just as many ways to insure against the risk of needing long-term care, either at home or in a facility. It is not hard to imagine some combination of private insurance, public coverage, and a safety net for the very poor. The Germans already have a system such as this, and it works pretty well for them.

There are many paths down this road. and each raises big questions: How much insurance should a universal system provide? Should it offer first-dollar benefits, or catastrophic coverage only? Will benefits be paid in cash, or through services? Can such a new system enhance care integration and thus potentially improve the quality of both health and long-term care for those with chronic disease? And, perhaps, most controversial of all, how will we pay for it–premiums, taxes, or some combination?        

The volume can be downloaded for free from the foundation website. If you want to take a deep dive into the challenges of long-term care financing, it is worth a look.