How much would it cost if government pays for all long-term care?  About $4 trillion over the next decade.

We know because Democratic presidential hopeful Bernie Sanders has proposed to do just that, as part of his ambitious Medicare-for-all health insurance program. And, in an effort to calculate the overall cost of Sanders’s domestic policy agenda, a group of my Urban Institute colleagues have run the numbers.  The overall net increase in federal government spending for all health and long-term care: $32 trillion over 10 years. As part of that project, Urban long-term care expert Melissa Favreault estimated the net increase in federal spending for long-term supports and services only: about $3 trillion (after accounting for the roughly $1 trillion Medicaid already pays).

Because Sanders’s health proposal includes no detail on how his long-term care plan would work, Urban made a number of assumptions that captured the spirit of his overall health proposal—free care for all. However, Melissa did not assume that Sanders would provide completely unlimited benefits. Instead, she built on the general benefit structure that already exists in Medicaid.

How would it work?

For instance, she assumed that program benefits would be triggered when a person needs assistance with at least two activities of daily living (such as bathing, dressing, or going to the bathroom) or suffers from severe cognitive impairment. This is the trigger used by private long-term care insurance and, roughly, by state Medicaid programs (though they vary from state-to-state).

She also assumed that the program would reimburse nursing home costs at about 115 percent of current Medicaid rates, since Medicaid often pays less than cost. She also assumed the plan would limit home care benefits, pay for supports and services but not room and board for those receiving residential care, and reimburse costs rather than providing a cash benefit. Family caregivers would still play a key role, while private long-term care insurance would likely shrink.

Even with those limitations, government costs would be enormous, raising important questions about how they’d be funded. For context, $3 trillion is more than one-third of the entire projected Medicare budget over the next decade.

Does long-term care for all make sense in the current budget environment, where we face big and growing deficits for the foreseeable future? Does it make sense for government to provide first-dollar supports and services even for those with high lifetime incomes? Should Bill Gates really get “free” long-term care?

Other solutions

There are other, more modest, solutions. Earlier this year, the Long-Term Care Financing Collaborative (I was a participant) recommended a universal government benefit—but only for true catastrophic costs. We felt that middle- and high-income people should take responsibility for at least some of their long-term care costs. We wanted to focus government assistance on those who faced very long spells of high-cost long-term care needs that are beyond the ability of most to finance out of personal assets or insurance.

Overall, the Urban Institute team, including the Tax Policy Center, the Health Policy Center (HPC) and the Income and Benefits Policy Center (IBP),  estimated the net effect of Sanders’s tax and spending plan. This collaborative analysis found that for 95 percent of households, his plan would increase average government benefits by more than it would raise their average tax bill. Low- and moderate-income households would see a positive net benefit, on average, while the highest-income 5 percent would pay substantially more in taxes than they’d receive in new government transfers.

But Sanders’s proposed $15 trillion tax increase would pay for less than half the cost of his new spending. Thus, he’d still add $18 trillion to the national debt over 10 years—plus at least another $3 trillion interest costs. Nearly all of that increase would be due to his Medicare-for-all health plan.

Only about 10 percent of his proposed $32 trillion in new spending would come from his long-term care plan. Still, it is a lot of money. And a better design could target a long-term care benefits to those who need it the most.