With national spending on long-term care services soaring – impacting retirement funds and Medicaid – the American Medical Association (AMA) House of Delegates recently adopted policy during its Annual Meeting to make long-term care insurance simpler, more affordable, more innovative, and part of automatic enrollment for current employees and retirees. The new AMA policy also called for Medicare, Medicare Advantage, and Medigap plans to bolster their offerings with regard to benefits related to long-term care.
Long-term services and supports (LTSS) refers to the range of clinical health and social services that assist individuals in their daily activities, including eating, bathing, dressing, and instrumental tasks like medication management and meal preparation. In 2013, national spending for LTSS was $310 billion; by 2015, that figure grew to $331 billion. Medicaid spending accounts for over half of national spending for LTSS. Twelve million Americans needed LTSS in 2010, and, by 2050, that number is expected to be 27 million – an increase driven by aging Baby Boomers and advances in technology that allow people with chronic illness and disabling conditions to live longer. But, even as the need increases, a possible funding source for LTSS, long-term care insurance (LTCI), is too expensive and complex for most consumers.
Already, about 40 percent of state Medicaid budgets go toward LTSS. Medicaid pays for most of LTSS, while Medicare post-acute care pays for 23 percent of LTSS. The remaining sources of funding include out-of-pocket spending, long-term care insurance, other private sources, and other public sources. Because many middle-class people fail to anticipate and plan for their long-term care needs, Medicaid has effectively become the default payer instead of a safety net for the poorest individuals, creating an enormous strain in funding and threatening services for the poorest and most vulnerable.
“Rising costs of everything from home ownership to higher education are making it harder than ever for Americans to save for retirement and the long-services and supports that more and more people require,” said AMA Board Member Stephen R. Permut, M.D., J.D. “Our hope is that the policies and recommendations we are making today will provide feasible steps forward to alleviating the financial strain on families and Medicaid of providing LTSS. With demand for LTSS likely doubling over the next 30 years, the time for action and forward-facing reforms is now.”
In tackling the challenges of LTSS, the AMA announced several new policies supporting:
- Standardizing and simplifying private LTCI to achieve increased coverage and improved affordability;
- Adding transferrable and portable LTCI coverage as part of workplace automatic enrollment with an opt-out provision;
- Innovations in LTCI product design, including the insurance of home and community-based services, and the marketing of long-term care products with health insurance, life insurance, and annuities;
- Permitting Medigap plans to offer a limited LTSS benefit as an optional supplemental benefit or as a separate insurance policy;
- Medicare Advantage plans offering LTSS in their benefits packages;
- Permitting Medigap and Medicare Advantage plans to offer a respite care benefit as an optional benefit;
- A back-end public catastrophic long-term care insurance program;
- Incentivizing states to expand the availability of and access to home and community-based services; and
- Better integration of health and social services and supports, including the Program of All-Inclusive Care for the Elderly
The AMA House of Delegates is the policy-making body at the center of American medicine, convening an inclusive group of physicians, residents and medical students representing every state and medical field. During the five-day meeting, 617 delegates work in a democratic process to create results-focused policies on topics in public health, science, ethics, business and government that enable physicians to answer a national imperative to measurably improve the health of the nation.
