Imagining the immediate future of long-term care generally leaves those in the field with a sense of foreboding. The aging baby boom generation has been described as a coming earthquake that will shake the foundation of the long-term care system. In the face of such a challenge, it may be helpful to recall some recent successes, to pinpoint areas in which standards might be slipping, and to recognize the need for serious long-term care reform.
Improved Quality of Care
Although probably no one is satisfied with the long-term care status quo, there has been major progress over the past 15 years. Since the federal Nursing Home Reform Law went into effect in October 1990, the quality of care in nursing homes across the country has improved significantly. Among other things, this important statute has brought about greater focus on patient assessments and care planning, diminished the use of patient restraints, and established standards that have improved the quality of nurse aide care.
In addition, assisted living is now maturing from an in-development concept to a genuine long-term care option. So today's older Americans generally have more long-term options than their peers from just a decade ago. Many can choose to receive necessary services at home or in a less-institutional, assisted-living setting.
Threats to Progress
In response to the approaching wave of Baby Boomers and budgetary pressures, however, both federal and state governments are beginning to scale back their commitments to quality long-term care by promoting cheaper, "flexible" options.
One generally favorable option offering flexibility is the Medicaid Home and Community-Based Services (HCBS) waiver. This waiver maintains Medicaid beneficiaries' right to receive necessary nursing home services, but gives them the option to choose to receive an equivalent level of care while living in the community in an assisted-living facility or at home.
One major concern about HCBS waivers, however, is the lack of meaningful quality-of-care standards. As the Government Accountability Office noted in a 2003 report, the federal Medicaid program has little information about—or control over—the quality of care provided with HCBS waiver funding. Given that HCBS waiver services are designed to substitute for nursing home care—and that federal HCBS spending is significant and growing—the absence of federal standards is a troubling weakness. In fact, the recent Commonwealth Fund Health Care Opinion Leaders Survey on long-term care found that few respondents were in favor of giving frail elderly and disabled Medicaid beneficiaries vouchers to purchase their own long-term care services.
Even more worrying, tightened state budgets, coupled with a newly receptive federal administration, have prompted some states–including Florida, Vermont, Kentucky, Idaho, South Carolina, and New Hampshire–to propose broad "demonstration" waivers of federal Medicaid law. These waivers are also promoted for their "flexibility," which stands in alleged contrast to the supposed "rigidity" or "complexity" of Medicaid.
These waiver requests are not submitted under HCBS waiver authority, which does not permit the elimination of services, but under Medicaid's demonstration waiver authority. This broad statutory provision allows states to seek permission from the federal Centers for Medicare and Medicaid Services to establish experimental programs, which do not need to comply with specific terms of the Medicaid statute. Demonstration waivers can be used broadly to eliminate beneficiaries' entitlements to particular forms of care, including nursing home care; increase cost sharing; or cap state or federal expenditures for beneficiaries or for particular kinds of services. Consequently, previous administrations have been extremely wary of state requests for such waivers.
To grasp the real-world impact of these demonstration waivers, one needs to recognize that the average nursing home resident is a woman in her 80s whose nursing home care is covered by Medicaid. Under these waivers, such a resident might be denied Medicaid coverage, even though she has no other means to pay for the care she needs.
Maintaining Rights to Quality Care
Analysis of long-term care Medicaid waivers should therefore consider two important questions. First, does the waiver eliminate or restrict a Medicaid beneficiary's entitlement to long-term care? For example, the demonstration waiver recently approved for Vermont will give all Medicaid long-term care beneficiaries a choice between HCBS waivers and nursing facility care. However, the right of all such beneficiaries to nursing facility services will be eliminated, and beneficiaries will receive such services only if the state has sufficient funding.
Second, does the waiver set meaningful quality-of-care standards for long-term care services? Under both HCBS and demonstration waivers, there is danger that savings will be extracted by cutting back on care standards. The most obvious scenario is a large-scale transfer of Medicaid beneficiaries from nursing homes to assisted-living facilities, without first establishing adequate standards for assisted living. As the National Senior Citizens Law Center's recent report, Critical Issues in Assisted Living, shows, most states' assisted living standards require little or no nurse participation, and only a modicum of training for direct-care staff members.
A New Approach
As the Baby Boom population approaches young-old status, we should be rethinking our long-term care system in a comprehensive way, rather than devising waivers that may deny older Americans their right to high-quality long-term care. In refusing to provide for such care, we simply shift the costs to the most vulnerable adults in our society, or to their families.
Relatively few individuals can afford to pay for nursing home care for any significant period of time, given monthly private-pay rates ranging from $4,000 to more than $10,000, depending on region and facility. Long-term care insurance currently covers relatively few individuals, paying less than 10 percent of long-term care costs. Private market coverage tends to bring with it an adverse selection problem, driving up costs and making insurance unavailable to many of those most in need. And Medicare coverage for long-term care is limited.
Thus, our current health care system drives many older Americans toward poverty, just as their need is greatest. Although Medicaid is designed primarily to meet the health care needs of poor people, the distressing reality is that many older people who consider themselves financially sound when they reach their 60s eventually find themselves reliant on Medicaid. This is so because many older people, especially those 85 and older, experience greatly increased acute, chronic, and/or debilitating conditions and consequently increased health care needs, especially for home health care and nursing facility care. All too frequently, these needs rapidly outstrip the care available under Medicare and the resources of the individuals involved.
How to best address this problem? Many nations have established compulsory and universal public social insurance programs that pool the risk among all members of the public. Our nation, with its complex public/private system, has not. Yet health care in this country remains far more costly than in industrialized nations that rely more heavily on publicly administered care—and there is no evidence that our greater expenditures produce uniformly better health care results. Meantime, while the rising costs of care put increased strain on patients across all income levels, particularly affected are those vulnerable populations who rely on publicly funded programs that are under growing budgetary pressures.
Space limitations prevent an attempt here to spell out the path to a solution. A first step, though, is obvious. Leaders concerned about long-term care in this nation must step forward, providing information to the general public and creating awareness of the need for positive changes that will prepare this country to address the long-term care needs of the Baby Boom generation during the next 40 years. We must create a state of readiness. If we fail to do this, many will suffer and we will have disserved our nation and those we seek to serve.
Edward C. King is the executive director of the National Senior Citizens Law Center, a non-profit organization founded in 1972.
The views presented in this commentary are those of the author and should not be attributed to The Commonwealth Fund or its directors, officers, or staff.