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Fixing America’s Care Infrastructure: The Case for Expanding Long-Term Care

Photo: Elderly person's hands in lap

In the course of their internal negotiations over their planned reconciliation bill, congressional Democrats have debated several potential policy changes, including an extension of the expanded child tax credit, negotiating drug prices for Medicare, and universal pre-K. However, one aspect of the original planned reconciliation bill has all but faded from the national conversation: funding increases for home-based long-term care. As part of the White House’s original American Jobs Plan, President Biden proposed increasing Medicaid funding for long-term care services by $400 billion over the next eight years. This increased funding is critical to improving long-term care infrastructure in the United States. However, fixing the problems with the American system of long-term care will require more action. By expanding funding for long-term care through Medicaid and covering it through Medicare, Congress can ensure that the nation’s seniors have access to high-quality, affordable care while using the increased funding to ensure that long-term care workers are paid a living wage.

As the US population continues to age, the issue of how to provide quality long-term care to the elderly has become increasingly pressing. One estimate finds that the number of American adults requiring long-term care services, such as home-based care or assisted living, could reach 27 million by 2050. Long-term care is likely to play some role in many Americans’ lives, whether they or a family member require long-term care. Despite this increased demand, there is little financial support available for families and individuals when searching for these services. A patient who requires full-time long-term care services year-round would be expected to spend more than $40,000 a year for a home health aide and a whopping $225 a day for a room in a nursing home. This cost is even higher for patients who require round-the-clock care. As the median income of an individual over the age of 65 in the United States stands around $27,000, long-term care services are prohibitively expensive for many elderly patients. While many expensive medical procedures are accessible to elderly patients through Medicare, non-medical long-term care services are not covered under the program. These services make up the vast majority of the long-term care needed by seniors, meaning that Medicare offers very little assistance to recipients who require assistance with everyday activities. 

The major government program for low-income seniors who receive long-term care is Medicaid, which offers long-term support to eligible individuals. While Medicaid allows these people to access necessary services that would otherwise be out of reach, it suffers from several problems. The program is severely underfunded, resulting in poor quality of care for recipients. In addition, eligibility for long-term care support through Medicaid requires recipients to be near destitute, with less than $4,000 in assets, including cash and savings. Medicaid also attempts to reclaim the money spent on care by taking it from estates, which can cause significant financial hardship for low-income families. Low funding for Medicaid long-term support also results in low wages for long-term care workers. Most home care workers are paid an hourly wage of only $13.81, despite the critical importance of their work. 

Solving these problems will require a significant increase in investment in long-term care. The most obvious step is expanding Medicare coverage to non-medical long-term care. While many middle class and low-income seniors are not eligible for long-term support under Medicaid, if long-term care costs were covered under Medicare, this would significantly reduce their financial burden. While covering long-term care might increase the administrative costs of Medicare, it would also reduce stress on Medicaid by creating another path for low-income seniors to access long-term care, relieving the caseload dealt with by Medicaid. Medicare coverage would also allow the federal government to negotiate price reductions for long-term care with assisted living facilities and home care companies. This would also allow the government to set rules about pay levels for care workers, providing them with a decent standard of living. In absence of Medicare coverage, Congress can and should expand funding for Medicaid long-term support services. Biden’s plan to add $400 billion in funding is a good start, but Congress should go even further by increasing the asset limit to receive long-term care and eliminating estate recovery of Medicaid expenses. If Medicaid is to remain the only government program which helps seniors access long-term care, it should be accessible to those with assets exceeding $4,000 and should not pursue punitive confiscations of property after death. Finally, Congress should implement minimum pay standards for long-term care workers and eliminate barriers to their unionization. Taking long-term care seriously requires a recognition of the fact that workers in the industry are essential and should be treated with dignity and paid a fair wage.

Long-term care provides seniors with critical support and is poised to become a critical part of the American economy as the population ages. Despite this fact, policymakers have shown little interest in addressing the threadbare federal support for these critical services. Congress owes it to the nation’s seniors to ensure that long-term care is high quality, accessible, and affordable.

Photo: Image via Unsplash