We can't have reform without a financing solution for long-term care.
Nearly 3.5 million Minnesota adults are uninsured for long-term care and supportive services, meaning that many of us cannot afford the cost of a longer life or long-term disabilities. Long-term care services and supports must be part of meaningful health care reform.
In public policy, payment and perception, we've mistakenly segregated acute care and chronic care. For example, if someone over 65 suffers a stroke, Medicare jumps in with procedures and payments attempting to save the person. But upon release from the hospital, Medicare ignores that person's less expensive, longer-duration supportive services, such as a home aide or assisted living. Nor does it pay for such things as Alzheimer's care or other intensive long-term care that a young adult with a disability may need.
Nearly 70 percent of those who turned 65 in 2005 will need some long-term services. The average time: three years. Contracting with a home aide just three days per week for two to three hours at a time to provide basics such as meal preparation and help with dressing can easily cost $1,000 per month. Nursing home care is much more expensive, $50,000 or more a year in Minnesota.
The status quo means many will continue impoverishing themselves and turning to Medicaid -- a government program and de facto long-term care provider. Primarily paying for institutional care, its "payments" already fall far short in meeting true costs. Without financing reform, we're simply cost-shifting and avoiding the main issue -- finance reform for longevity and chronic care.
One approach is cutting Medicaid (called elderly waiver in Minnesota) for people in assisted living. In many cases this means another family member misses work juggling care for a loved one, or a person lives without supportive services, beginning the more arduous, expensive volley between home and hospital.
Another policy idea would require seniors to undergo precertification before choosing assisted living. Just because you're older and want to privately pay for housing with supportive services, you'd need state approval. The premise: State certification will "save" you money for when you "need" a nursing home. Precertification is ageism missing the fact that supportive services empower people while keeping them out of much more expensive government institutions.
Our overriding goals should be empowering people to live in the most independent setting possible; transforming nursing homes into right-sized, very specialized chronic-care centers; taking a personal share in costs of chronic care and supportive services, and ensuring a strong safety net for people who never will be able to pay for such care and services.
If America were creating a chronic care system today, we'd never duplicate Medicaid as primary payer. We'd never require people to impoverish themselves to get coverage. And we'd never rely simply on the hope that people would purchase private care policies. We'd create a solution balancing personal responsibility and a secure safety net.
The CLASS Act (Community Assistance Living Services & Supports) introduced by the Senate Committee on Health, Education, Labor and Pensions is that opportunity. In the opt-out insurance plan, people would pay a premium of approximately $65 per month in return for a minimum daily benefit of $50 that they can self-direct. It would make private wrap-around insurance policies appealing because consumers would easily understand what their dollars buy and they'd know such a product could guarantee quality of life and fiscal security. It also could gain a state good housekeeping seal.
The Congressional Budget Office's evaluation of the CLASS Act shows no cost to the government over the next 10 years, a positive savings of $2.5 billion in Medicaid in the first 10 years alone, and long-term sustainability. This would transform financing of long-term services and supports, assist America's workers and future retirees, enhance intergenerational financial security, and promote choice and independence.
Without a long-term care financing solution, America doesn't have health care reform, and Minnesota has an extremely large and immediate problem to solve.
Kathryn Roberts is president and CEO of Ecumen, a nonprofit senior services company based in Shoreview, and is a board member of the American Association of Homes and Services for the Aging.
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