On May 17, the House Energy and Commerce Health Subcommittee held a hearing on planning for long-term care.
Chair Nathan Deal (R-GA) said, Long-term care is one of the most significant demographic and fiscal challenges of this century and of particular importance because of our rapidly aging population…The senior population—12.4 percent in 2000—is predicted to rise to 20.6 percent by 2050; the fastest growing share, 80+ (“oldest old”) is projected to rise from 3.3 percent in 2000 to 8 percent in 2050. This population, which is most likely to need long-term care services, is projected to more than triple from about 9.3 million to 33.7 million nationally…Today, we will examine how the private marketplace is addressing long-term care planning often in partnership with government…we are also examining the critical role of caregiving and its challenges for both caregivers as well as those who train caregivers.”
Ranking Member Sherrod Brown (D-OH) took issue with cuts made to the Medicaid program last year, referring to waiting lists for home and community-based care, the lack of minimum staffing requirements for nursing homes, and a nursing shortage. He said, “Long-term care isn’t discretionary. The federal government should fully fund Medicaid long-term care, which will stabilize our long-term care safety net. Until we responsibly address current and near-term needs, planning for future long-term care coverage is an exercise void of legitimacy.”
Barbara Stucki, project manager for the Use Your Home to Stay at Home Initiative for the National Council on Aging (NCOA), focused her remarks on the use of home equity for long-term care planning. Expressing the NCOA’s support for reverse mortgages, she stated: “By taking out a reverse mortgage, older homeowners can convert a portion of their home equity into cash while they continue to live at home for as long as they want. To qualify, all owners of the property must [be] age 62 or older. Borrowers do not need to make any loan payments for as long as they (or in the case of spouses, the last remaining borrower) continue to live in the home as their main residence. When the last borrower moves out of the home or dies, the loan becomes due. If used wisely, reverse mortgages can pay for preventive measures and day-to-day support so that impaired elders can continue to live at home safely and comfortably for many years. As an immediate long-term care financing tool, these loans also have the potential to reduce the risk that impaired elders and their families will turn to Medicaid in times of crisis.”
Senior Fellow and Program Director for Aging, Disability and Long-Term Care at RTI International Joshua Wiener expressed his frustration with the lack of attention to the issue of long-term care by policymakers. He explained that while the financial burden of long-term care will be greater as the aging population grows, it will be “manageable,” but that there is a serious shortage of high quality long-term care workers. Mr. Wiener acknowledged that private long-term care insurance can play a greater role as the population ages and the burden of long-term care increases; however, the cost of such policies is a major barrier. Stating that the quality of plans has improved substantially over the past twenty years, Mr. Wiener urged that long-term care policies include automatic inflation adjustments, saying that most policies today provide a fixed maximum benefit. He agreed that reverse mortgages can help, but pointed out that most people with significant disabilities do not have much home equity. Mr. Wiener concluded his testimony by stating that those who can afford long-term care policies are not the people who are likely to spend down to Medicaid eligibility, so expansion of private insurance is not likely to have a major impact on public long-term care costs. He said, “Federal policymakers bear a special responsibility to improve Medicare and Medicaid for the majority of the people who need and use long-term care services.”
Karen Ignagni, president and CEO of America’s Health Insurance Plans, and Gregory Jenner, executive vice president for taxes and retirement security for the American Council of Life Insurers, applauded the expansion of public-private long-term care partnerships in last year’s deficit reduction legislation and discussed the role of private long-term care insurance. Mr. Jenner stated that “if three-quarters of individuals between the ages of 40 and 65 who can afford long-term care insurance were to purchase and maintain a policy throughout their senior years, then by 2030, annual savings in Medicaid nursing home expenses would total $19 billion, and annual savings in out-of-pocket expenses would total $41 billion.” Among other recommendations, both witnesses expressed their support for an above-the-line tax deduction for long-term care insurance premiums, and provisions included in the House version (H.R. 2830) of pension legislation now in conference that would allow employers to offer long-term care insurance as an option under “cafeteria plans,” which allow employees to design their own benefits package, and flexible spending arrangements, which allow employees to pay for medical expenses with pre-tax dollars.
Dr. Thomas Byron Thames, speaking on behalf of AARP, focused on the need for expanded education efforts to convince Americans that long-term care should be considered part of overall retirement planning. He contended that many of the reasons people fail to plan for their long-term care needs are the same reasons they do not buy long-term care insurance “denial, believing Medicare pays for long-term care, and cost.” Dr. Thames urged stronger consumer protections for long-term care insurance policies; a careful expansion of the Long-Term Care Partnership Program, including strong consumer education, clear disclosure of income requirements, guaranteed state-provided services under Medicaid, and careful state oversight and evaluation; and a reduction in the costs of reverse mortgages through the establishment of a demonstration program for individuals with long-term care needs.
The second panel focused their remarks on issues faced by caregivers. Representing the American Red Cross, Vice President for Products and Health and Safety Services Scott Conner described the American Red Cross Family Caregiving program, which prepares families who are unexpectedly thrust into the role of caregiver for an elderly relative. Citing the high level of mental health problems among family caregivers, along with lost wages and missed work, Mr. Conner explained that in 2005 the American Red Cross delivered 18,000 “Family Caregiving modules,” a training program consisting of one-hour sessions on nine topics. Participants can choose whatever presentations meet their needs, and each module is designed to improve caregiving skills, raise confidence, and reduce stress.
Explaining that most older Americans want to remain in their homes, Dr. Larry Wright, director of the Schmieding Center of Senior Health and Education in Springdale, Arkansas, said that “there is an urgent need for creating the standards and structure for support of a professionally-trained community of paid in-home caregivers who provide personal care and other non-medical services to older adults in the home and who understand the behavioral problems that may be present when caring for an older adult with a dementing or other chronic disease.”
Representing the Service Employees International Union (SEIU), Candace Inagi stated that at least 35 states have reported substantial shortages of caregivers, echoing several other witnesses’ concern with the low wages for long-term care workers. She explained, “We can expect the current shortage to get worse. The traditional long-term care worker women between the ages of 25 and 45 have more economic alternatives. BLS [the Bureau of Labor Statistics] estimates that we will need an estimated 5 million additional direct care workers to fill current vacancies and meet the demand for additional services.” Ms. Inagi referred to a program in Washington, California, and Oregon that has given Medicaid beneficiaries greater choice in selecting long-term care workers by creating a public agency that “can serve as a co-employer for the purposes of determining wages and benefits. Consumers retain the right to hire, train, and terminate a personal care provider…but workers have a co-employer the state with resources to provide an adequate wage and health insurance.” She said that the program has resulted in an expanded labor market for workers.
