Covering long-term care: Programs, data and questions to ask

By Judith Graham

Long-term care has been in the news with the October 2011 demise of the CLASS Act – the first attempt by the government to establish a national long-term care insurance program.

Under that program, people would have signed up voluntarily for long-term care insurance and paid a monthly fee during their working years and beyond. Later, when participants became older and more frail, the government would have covered some of the cost of long-term care services.

The kind of services in question, known as “custodial care,” include assistance with toileting, bathing, dressing, shopping, taking medications and other so-called “activities of daily living.” Typically, the care is provided free by family caregivers or for a fee by companions, homemakers, certified nurse aides or home health aides.

With this sort of assistance, many older people are able to continue living at home or in assisted living, even when they have one or more chronic medical conditions. Without it, a person’s independence can be compromised and a nursing home may become the only alternative.

That’s an expensive and unwelcome outcome: The AARP has found that 86 percent of people age 50 and older would prefer to age in place at home, if at all possible.

Despite the potential to help millions of older Americans, there were serious questions about the CLASS Act’s affordability. If younger, healthy people didn’t decide to join the program – and there were signs this wasn’t in the cards – there wouldn’t be enough money to pay for the care needed by older beneficiaries and the government would be left holding the bag financially, critics maintained.

The Act was “doomed by its voluntary, opt-in structure,” wrote Naomi Freundlich, a senior research associate at The Century Foundation, on the foundation’s Health Beat Blog.

(For a sense of the give and take in Washington, D.C., over the CLASS Act, take a look at Congressional hearings held after the Obama administration pulled the plug on the program.)

Now, the question is how the long-term care needs of people with chronic conditions such as arthritis, diabetes or heart disease will be addressed going forward as the Baby Boomers enter later years.

This has actually been a pressing, unresolved question for a long time. Although few people realize it, Medicare doesn’t cover long-term care, for the most part. To be more precise, Medicare doesn’t pay for custodial care; it only pays for medically necessary care at home or in a skilled nursing facility, under limited circumstances.

That leaves middle class seniors having to pick up the tab for long-term care services out of their own pockets. Few people appear to have prepared adequately for this eventuality or to appreciate just how expensive it can be.

(Another option is to purchase private long-term care insurance in advance, many years before services are needed. See more information on this below.)

According to a 2011 survey from the MetLife Mature Market Institute, the national average rate for home health aides and homemakers/companions were $21 and $19 per hour, respectively. Adult day care costs $70 a day, while assistant living costs $3,477 a month, or $41,724 a year.

Nursing homes are considered part of the spectrum of long-term care services. Their average rates were $239 daily, or $87,235 annually across the United States. (Nursing home services include both custodial care and more intensive care for people with pain, dementia, skin breakdown, and other serious problems.)

With these kinds of prices out of reach for most families, it’s no wonder that people turn to Medicaid for help. Medicaid finances nursing home care for impoverished seniors and has become, de facto, the nation’s largest underwriter of nursing homes and other long-term care services at a cost of $110 billion annually. (This includes care for seniors as well as people with serious disabilities.)

See an in-depth look at Medicaid and long-term care.

Yet, with financially-stressed states cutting Medicaid budgets left and right, “everyone agrees that the enormous burden that long-term care places on Medicaid is unsustainable,” Freundlich wrote on the Health Beat blog.

Some believe an expansion of private long-term care insurance holds some potential for dealing with this dilemma. But few people realize the need to have this coverage, and cost is a significant deterrent. For an individual age 60, the average cost of a private policy is over $2,300 a year; for a couple at that age, it’s just over $3,000, according to a 2009 report from the Kaiser Family Foundation.

Also, private long-term care insurers have sold policies with insufficient coverage that have left seniors in the lurch when they try to cash in on benefits, prompting a slew of angry lawsuits by consumers.

As reporters, be alert to problems with various types of long-term care facilities. The Miami Herald has done a brilliant series on abuses in assisted-living centers. Numerous papers have looked at abuses in nursing homes, including a Chicago Tribune series in 2009 called “Compromised Care.” (Read about how Compromised Care was reported.)

Home health care hasn’t gotten the same level of scrutiny, in part because it doesn’t have the same level of regulatory oversight.

Questions to ask

Check with your state’s insurance department. Have consumers filed large numbers of complaints companies providing long-term care insurance to seniors? Do lawsuits allege these companies engaged in unsavory business practices?

What’s happening with your state’s Medicaid program and rates paid to long-term care facilities? The more rates are cut, the greater the risk that staffing levels will be inadequate and residents will suffer. Is the state cutting payments to aides that help Medicaid members in their homes? (These programs vary by state.)

Assisted-living centers, including those targeting seniors with dementia, are being built across the country. What’s the situation where you’re located? Where are facilities springing up and who are they marketing to? What amenities are being offered and what rates are being charged? If a facility is promoting itself as serving dementia patients, does it have the necessary staff and expertise to provide top-notch care?

It’s hard for families to monitor the quality of long-term care services, especially when they live at a distance. What are the risks they face and what are their options? How can families help loved-ones find appropriate long-term care services? What community resources are available?

AHCJ materials

Long-Term Care Workforce: As baby boomers age, Dr. Valerie Gruss says the nursing shortage will only become more acute – particularly in the arena of long-term care.

You Can Run, but You Can’t Hide: Policy and Problems in Long-Term Care: Presentation from Joshua M. Wiener, Ph.D., senior fellow and program director, Aging, Disability and Long-Term Care, RTI International, on the “How will retiring boomers affect the national health agenda?” panel at Health Journalism 2008.

Using Nursing Home Compare: Charles Ornstein of ProPublica offers some tips on using the government’s site to evaluate nursing homes. He identifies the strengths and weaknesses of the data and gives information about some other sources of information about nursing homes.

Inspection reports reveal deficiencies in assisted-living care: Ziva Branstetter of The Tulsa World reported that the public is remarkably uninformed about major issues such as what services to expect in assisted living, when to choose a higher level of care and what a center’s inspection records reveal. In addition, “assisted living” can mean different things to different people and in different states, and there are no specific federal regulations governing assisted-living centers; each state has its own standards.

Seniors for Sale: This project, by Michael J. Berens of The Seattle Times, won first place in the metro newspaper category in the 2010 Awards for Excellence in Health Care Journalism. The contest judges said “Berens connects the dots between state workers assigned quotas for moving the most fragile among us into shark-infested waters, and the tragic consequences that followed.”

Long-Term Care Insurance: Hearing and GAO report: The House Subcommittee on Oversight and Investigations held a July 24, 2008, hearing into whether consumers are adequately protected from premium increases and denials of claims. In conjunction with the investigation, the GAO released a report on the topic.

Judith Graham (@judith_graham), AHCJ’s topic leader on aging, is writing blog posts, tip sheets, articles and gathering resource to help our members cover the many issues around our aging society.