Per the Bipartisan Policy Center, about half of all adults aged 65 today will require long-term assistance with daily activities such as eating, dressing, and bathing during their senior years – a type of care that is extremely expensive.
For many Americans, they’re downright unaffordable.
Many people believe that Medicare covers long-term care, while actually it pays only for the first 100 days of skilled nursing care after a hospitalization. Medicaid covers skilled nursing care for lower-income seniors, but it does not pay for assisted living. Private insurance can help cover some costs, but long-term care coverage doesn’t come cheap. The average premium today is $2,050 a year for a 55-year-old man and $2,700 for a woman of the same age. Premiums are rising 25% to 100% annually.
So how can seniors and their families afford to pay for long-term care when they need it? The government designed a new program in 1965, when Medicare was enacted to provide accessible health care coverage for older Americans, and it could design a new program again. So far, there aren’t any clear policy solutions. Still, as far as long term care is concerned, private insurance isn’t going to be the answer for most people, and some government intervention will be required.
In Washington state, workers could pay less than 1% of their wages into a trust fund in exchange for $36,500 worth of long-term care benefits. Minnesota now enables issuers of Medicare supplemental insurance – Medigap – policies to offer long-term care coverage at an additional cost. Naturally, a federal long-term care insurance program would be preferable to piecemeal efforts in the states.
In 2018, Congressman Frank Pallone (D-NJ) rolled out a discussion draft of a bill, the Medicare Long-Term Care Services and Supports Act. The proposal did not include a funding mechanism. Rep. Richard Neal (D-MA), chairman of the House Ways and Means Committee, is also exploring the issue. The fact that two powerful committee chairmen are brainstorming proposals is a sign that Congress is once again getting serious about this issue. But there clearly is no consensus yet on how to provide and fund a new benefit.
Would it be front-end (first-dollar) coverage or back-end (kicking in after a certain amount of time or expense)? Direct federal benefit or subsidized private benefit? Will the funding be via premiums, new taxes, or both? With millions of seniors and their families struggling to acquire or provide much-needed long-term care, the time to act is right now.
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Opinion: America’s long-term care crisis is worsening | MarketWatch