Seniors and disabled individuals would no longer need to pay out-of-pocket for long-term residential care or for help at home with daily living tasks — situations that often deplete their savings entirely — under a New Jersey congressman’s proposal to expand the scope of services covered under Medicare.
U.S. Rep. Frank Pallone (D-NJ), visited a daytime program for adults with aging issues or developmental disabilities in Edison yesterday to highlight a bill he is drafting to broaden the scope of Medicare the federal insurance program for the elderly. The bill would force Medicare to provide a cash benefit to help meet long-term care costs, including paying family members for their assistance, or offsetting the cost of an outpatient program or residential facility. Currently, Medicare covers medical care, including short-term stays in nursing facilities, but only limited support services.
The cash benefit would be available to all seniors who meet certain disability or long-term care standards, regardless of age or income; it would cover the equivalent of five hours of daily home care, at a rate adjusted for regional costs, inflation, and the level of need. This benefit would kick in after two years, during which the family would need to cover the cost as if under the current system, as a form of deductible.
In New Jersey, long-term care can cost more than $65,000 annually, based on information Pallone shared from the state Department of Banking and Insurance. Even with the help of Medicare, he said families spend an average of $140,000 out-of-pocket before they have become poor enough to qualify for Medicaid, which covers low-income residents and disabled individuals.
A growing need
Seven out of ten Americans over age 65 will need long-term care services at some point, Pallone said. There are now nearly 48 million seniors nationwide, according to the U.S. Census Bureau, including 1.3 million in New Jersey. This demographic is expected to swell to more than 98 million by 2060, as the massive Baby Boomer population ages, with close to 20 million people over age 85.
“The growing need for long-term care is one of the greatest threats to retirement security for American seniors, and the adult children who care for them,” Pallone said after yesterday’s meeting with advocates for the elderly and disabled individuals at the JFK Adult Medical Day Program.
“It’s time to expand Medicare to include a long-term care benefit so that millions of seniors and individuals with disabilities no longer have to face financial ruin before they get assistance,” the congressman continued. “I’m hoping that this proposal will begin an important discussion, and look forward to getting feedback from interested stakeholders.”
Evelyn Liebman, associate director AARP of New Jersey, could not comment on Pallone’s proposal, which she hadn’t seen, but agreed “this is a critical issue for New Jersey and the country.” She said that as the senior population grows, so will the number of people who want to remain at home while they age — underscoring the need for more options to support the increasing number of caregivers it will take to help these residents bathe, dress, prepare meals, shop, and monitor their healthcare needs.
$13B of uncompensated care annually in NJ
Healthcare advocates have also raised concerns about the impact this dynamic can have on those providing the care, noting that as many as 1.8 million Garden State residents — friends, family, and community members — are now providing as much as $13 billion annually in uncompensated care, a role that can take a significant emotional and economic toll on the caregiver. New Jersey lawmakers adopted a bill late last year to create a task force to advise and advocate for these caregivers, but it was not signed into law.
Pallone’s bill, the Medicare Long-Term Care Services and Supports Act of 2018, also seeks to reduce that burden by creating a flexible source of funding that seniors can use to pay for residential care, adult day programs, home health aides, transportation and other support services, and assistance from family members. He said the goal is to provide incentives for people to remain in their homes, where most want to grow old, with family support.
In addition, the proposal — which would be funded by the federal government — aims to reduce the number of families that must spend down all their money to qualify for Medicaid coverage for long-term care, a problem that Pallone said has been identified in a number of bipartisan reports on the issue. His bill, which has not yet been introduced, could face an uphill battle in a Republican-controlled Congress that has been focused on cutting federal spending for healthcare, not expanding investment in it.
Great threat to retirement security
There is no viable long-term care financing system in this country, leaving millions of individuals each year with nothing. Long-term care financing is in a crisis state and is one of the greatest threats to retirement security for seniors and the adult children who care for them,” reads a fact sheet on the bill shared by Pallone’s staff. While the total cost of the bill — and funding source — have yet to be determined, the plan calls for committing $1 billion in total through 2025, some of which would fund outreach, education, and efforts to generate enrollment in the long-term benefit program under Medicare.
The benefit would also be available to so-called dual-eligible patients, or individuals who qualify for both Medicare and Medicaid, frequently the most sick and vulnerable residents. Altogether, the change would shift more of these long-term costs to Medicare, which is funded entirely by the federal government, and reduce the burden on Medicaid, in which the cost is born by state and federal sources.
Pallone is asking stakeholders who wish to comment on the draft to email ECDem.Comments@mail.house.gov by June 15.