Washington Elder Law Practice Report (#14) / What to do about paying for long-term care?

March 19, 2014

Washington Elder LawThis is #14 in a continuing series of Washington Elder Law Practice Reports.

A recent bill introduced in the U.S. Senate raises the issue – again – of what to do about paying for long-term care. (Senate Bill 2089 introduced on March 6, 2014, by Sen. Sherrod Brown and Sen. Elizabeth Warren).

The bill would increase the countable resources that could be kept by an individual receiving Supplemental Security Income (SSI) from $2,000 to $10,000. The present value has been in effect for decades.

Payment for long-term care (LTC) often involves qualifying individuals as “SSI-related” under Medicaid, which would likely be affected by any change in the allowed SSI resources.

One of the major financial issues facing seniors is how to pay for LTC if it is needed. This type of care can range from support at home to assisted living to nursing home care.

Medicare provides only short-term support for LTC.

Private LTC insurance is so expensive (and subject to pre-existing health conditions) that it is not feasible for most people.

The Affordable Care Act (ACA) initially included a public LTC insurance option, but this was rescinded as not being financially viable.

As a result, Medicaid is often the only path available to assistance in paying for LTC. About 40 percent of the Medicaid budget goes for this purpose.

Given the financial stress on governmental health care programs today, it seems difficult to expand public LTC funding by allowing individuals to keep more resources. At the same time, the number of seniors likely to need LTC is increasing rapidly, placing pressure on present budgets.

There are several (conflicting) approaches emerging today to dealing with this situation.

  • One trend, represented by the recent Senate bill, is to improve LTC coverage under present public programs, and assume that funding will be found.
  • Another strategy is to come up with alternative approaches to providing LTC that are more flexible and less expensive. It might be possible to encourage a wider range of innovative approaches to meeting care needs, perhaps combined with some decentralization of services and Medicaid vouchers to allow seniors needing care to “shop around” among alternatives. Localized groups might compete for “clients”
  • A third approach might be to convert Medicaid to state block grants and let the states work it out. Changes in services would then have to be decided on at the state level.
  • A fourth approach is to cut funding for existing programs and force individuals to seek the best options that they can find, without attempting to change the available options.

The recent Senate bill is an “outlier” because it would provide more money for the existing system, which would be difficult.

The issue is not going away, but political solutions will likely be even more hotly contested that has been implementation of the ACA.

Elder law practice in Washington is discussed by Cheryl and Ferd Mitchell in volumes 26 and 26A of Washington Practice (Washington Elder Law and Practice and the associated Elder Law Handbook). Probate practice is covered in volume 26B, and also introduced in volume 26.