Congressional Hearing Tackles Long-Term Care Funding Woes

“Americans should consider their future long-term care needs just as they plan for their retirement or purchase life insurance to protect their families,” Senator Collins said.

The committee also heard from Bruce Chernoff, president and CEO at The SCAN Foundation, and Mark J. Waeshawsky, visiting adjunct scholar at the American Enterprise Institute. The two discussed the results of a special report on long-term care prepared for the event by the Long-Term Care Commission. Chernoff said the report was the result of four public hearings, involving 34 witnesses, over 100 submissions of public testimony, and nine working sessions.

The report includes 28 recommendations on the long-term care dilemma, but Chernoff conceded that there wasn’t time to discuss them all at length at the hearing. He did highlight the general options that were presented within those recommendations.

Chernoff also urged the committee to name a follow-on body, “to pass along the baton for critical economic modeling work that is still needed but not complete. We also called for a 2015 White House Conference on Aging in partnership with the National Council on Disability to focus on long-term services and support issues.”

Another non-Congressional speaker at the hearing was Anne Tumlinson, senior vice president at Avalere Health. Tumlinson said she has 20 years of experience on the topic.

Commenting on the state of long-term care overall, Tumlinson said that “we spend well over $200 billion, but we pay for very little care. We depend on over 60 million Americans to provide most of the care, and they provide it unpaid. And they do this because Americans are not insured against the financial risks of long-term care and they really want to avoid a Medicaid nursing home bed.”

Solutions to long-term care costs will not quickly come from the Medicaid budget, Tumlinson stressed. Indeed, she said long-term care is a shrinking percentage of the Medicaid budget. That under-funding is one of the greatest problems facing long-term care.

“We know from industry data that over a million people are paying privately right now for assisted living or some other type of senior housing, and it costs $42,000 per year, on average,” Tumlinson said. “This is not just for rich people. These services are being financed through the sale of homes, through contributions from adult children. And providers tell me that their residents exhaust their resources while in assisted living and have to move into a nursing home to continue their care under Medicaid, because Medicaid does not cover assisted living.”

Concluding her remarks, Tumlinson said “my final point, and this is probably the least popular point that you will hear here today, is that even when people are educated about the risks of long-term care, and even when they are presented with the long-term care insurance policies, and even if we manage to do that for many Americans, we will not truly address under-financing without requiring everyone to participate in the risk pool.”

In essence, Tumlinson said Congress needs to begin debate on a mandatory participation long-term care program, much like Americans not contribute to Social Security.

“We have this vigorous debate over private versus public insurance options, but it does not really mean anything because neither works very well in actually covering enough people when the participation is optional,” Tumlinson concluded.