An Inclusive Plan for Financing Long-Term Care
We need to meet in the middle.
Today, most Americans fall somewhere between qualifying for Medicaid and having enough resources to afford their long-term care (LTC) needs out of pocket.
Americans currently look to five financing options for long-term care.
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Many Americans don’t realize that Medicare does not cover long-term care. It provides medical and post-acute care for older adults and people with disabilities.
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In our current system, Medicaid is the largest LTC payer. Since most people must meet income and asset limits to qualify, lower- and middle-income consumers often have to spend down their life savings to get the coverage they need.
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Only 3% to 4% of Americans 50 and older pay for a private long-term care insurance policy.
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Paying out of pocket allows people to purchase whichever services they need. However, they have no protection against spending down their life savings.
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Without other options, many people are forced to rely on family caregivers. There are about 38 million family caregivers in the US providing 36 billion hours of care. Due to a lack of support, their caregiving responsibilities often negatively impact their own health, finances, and jobs – leading to long-term repercussions for their own retirements.
Let’s work to close the gap.
To create an equitable LTC system, we must build a framework that meets the needs of those who don’t qualify for Medicaid but can’t afford to pay for care out-of-pocket.
Policymakers are increasingly looking toward social insurance to provide near-universal access to coverage at affordable premiums, without income or asset tests.
Framework for Creating a New Financing Program
Why social insurance?
A social insurance program is typically paid for through payroll premiums deducted automatically from your paycheck (like Social Security).
This dedicated funding source can support increased LTC costs for more people in need. It also lessens the financial pressure on Medicaid.
Further, since most people would be enrolled, the program would have a broad base of support, so it’d be less likely to be eroded in the future.