States’ LTC Squeeze: Demand Swamping Services

“It’s increasingly evident that we need to rethink how we address long-term services and supports in this country,” Susan Reinhard, senior vice president for the AARP Public Policy Institute, said in a statement. “Long-term services and supports are critical not only to the population they serve, but also to the family caregivers who support them.”

The report found 24% of state agencies reported an increase in the non-Medicaid portion of their budgets between 2011 and 2012. Almost half reported no change and 30% reported a decrease. For 2013, most agencies expected the same level of expenditures.

Resource centers and home-delivered meals were common targets for increased expenditures, and were the most in-demand services reported by states that participated in the survey. Information and referrals, support for caregivers, and transportation services were also in high demand.  

The most frequently used strategy to reduce costs was to streamline operations or form new partnerships rather than cut services. Just two states reported they eliminated programs or programs in 2012, and none reported they would make such a move in 2013.

Resources for HCBS waiver recipients are expected to increase and the nursing home population is expected to decrease or stay the same, the report found. Eighty percent of states that responded said there are more waiver recipients or will be over 2012 and 2013. Consequently, expenditures have increased as well. Over half of the states that said they increased waiver expenditures did so by 5% or more, and 21 states expect to do the same in 2013. Five states said they would increase expenditures by 15% or more.

One initiative many states are undertaking is to improve coordination between people who are eligible for both Medicaid and Medicare. Over 10 million people are dually eligible, the report found, and two-thirds of responding states said they’re launching new initiatives over the next two years. The most common initiative is a risk-based managed care financial structure.

“The decision by so many states to transform their Medicaid LTSS systems from fee-for-service to managed care ranks as the most significant byproduct of The Great Recession,” Martha Roherty, executive director of NASUAD, said in the statement. “But our report documents that other vital programs for seniors, reliant entirely on state revenues, still languish six years after the recession began. As their economies improve, states now must turn their attention to other state programs like Adult Protective Services, still struggling with reduced or flat funding, hiring freezes and staff reductions.”

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Check out these related stories on ThinkAdvisor:

• Top 10 Cheapest States for Long-Term Care Costs: 2013
• Top 10 Most Expensive States for Long-Term Care: 2013