Long-Term Care Entitlements

Democrats have circulated multiple proposals that would create new federal entitlement programs for long-term care to cover the costs of nursing homes, home health care, home health aide services, and personal care services. Ideas range in scope from the Medicare Long-Term Care Services and Supports Act of 2018, which would use federal funds to pay a standardized, monthly cash benefit for long-term care to anyone who is eligible for Medicare, to universal coverage for anyone over the age of 21.

New Long-Term Care Entitlements Would Bust the Federal Budget

The Medicare Long-Term Care Services and Supports Act of 2018 would radically increase federal spending by creating a new Medicare Part E. Under this new program, beneficiaries enrolled under Medicare Part A would receive a monthly cash payment to cover the cost of long-term care services and incentivize home health care options.[1] The minimum cash payment would equal the cost of five daily hours of home care services, or approximately $100 per day based on the national average of home health care workers.[2] This total would be adjusted upwards to account for a beneficiary’s functional ability. The price tag of such a proposal would be enormous as beneficiaries would receive a minimum of $100 a day on top of current Medicare and Social Security benefits.

An even more drastic proposal – universal long-term care coverage – would cover all costs of long-term services for individuals 21-years-of-age and older. This program, included in Senator Bernie Sanders’ proposal for a government-run, single-payer health care system, would increase the federal government contribution to long-term care programs by $2.937 trillion over 10 years.[3] Without an offset, this would also increase net interest costs by $468 billion over the same period, bringing the total price tag to $3.4 trillion over a decade.

New Long-Term Care Entitlements Are Unworkable

Federal spending on mandatory programs is already projected to increase from 69 percent of all federal spending today to 77 percent in the next 10 years[4] as Medicare continues down its path towards insolvency. The Part A Hospital Insurance Trust Fund is expected to be insolvent by 2026.[3] [4] At that point, the Centers for Medicare and Medicaid Services will only be able to reimburse 86 percent of claims. Further, Medicare Part B is expected to require drastic premium increases of 51 percent, from $134.00 to over $200 per month, over the next 10 years to maintain current levels of coverage.[5] Both the Medicare Long-Term Care Services and Supports Act of 2018 and universal long-term care proposals fail to address the major issues plaguing our health care system – rising costs for both Americans and the Federal Government. Creating a mandate for long term care coverage is not a solution, it will only worsen and further complicate an already highly complex and broken Medicare system. Any legislation to improve long-term care should address these challenges.

Republican Solutions for Long-Term Care

Rather than promising more benefits from a soon-to-be insolvent program, Congress should focus on reforming the current system to ensure existing programs are delivering the best possible outcomes and will be able to do so in the future. House Republicans have advocated for responsible Medicare reforms which will save this essential health care program for beneficiaries today and beneficiaries in the future. Additionally, Congress should simplify the Medicare system by enacting measures to increase competition, improve health, reduce costs to consumer and the Federal Government, and treat taxpayer dollars like the precious resource they are.

 

[1] “Medicare Long-Term Care Services and Supports Act of 2018: Section-by-Section,” Committee on Energy & Commerce Democrats, May 2018, https://democrats-energycommerce.house.gov/sites/democrats.energycommerce.house.gov/files/documents/LTSS%20Act%20Section%20by%20Section%20May%202018.pdf.

[2] Genworth 2018 Cost of Care Survey, Genworth, October 2018, https://www.genworth.com/aging-and-you/finances/cost-of-care.html.

[3] The Sanders Single-Payer Healthcare Plan: The Effect on National Health Expenditures and Federal and Private Spending, John Holahan et al., Urban Institute, May 6, 2016, https://www.urban.org/research/publication/sanders-single-payer-health-care-plan-effect-national-health-expenditures-and-federal-and-private-spending.

[4] The Budget and Economic Outlook: 2018 to 2028, Congressional Budget Office, April 9, 2018, https://www.cbo.gov/publication/53651.

[5] 2018 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, June 5, 2018, https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/Downloads/TR2018.pdf.

 

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