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The Future of Long-Term Care: What Is Its Place in the Health Reform Debate?

The Future of Long-Term Care: What Is Its Place in the Health Reform Debate?. Howard Gleckman Tax Policy Center June 16, 2009. Remember: This is About People. The Challenge. Deliver the most appropriate care to a highly vulnerable population

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The Future of Long-Term Care: What Is Its Place in the Health Reform Debate?

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  1. The Future of Long-Term Care: What Is Its Place in the Health Reform Debate? Howard Gleckman Tax Policy Center June 16, 2009

  2. Remember: This is About People

  3. The Challenge • Deliver the most appropriate care to a highly vulnerable population • Design a financing system to support this care without busting the budget • Make it work for today’s frail elderly and disabled—and for 77 million Boomers

  4. What Is Long-Term Care? • Personal Care for disabled and frail elderly • 10 million need it • 85% is delivered in the community • We spend $230 billion for paid care • And $375 Billion for informal “free” care • Free= financial, emotional, physical burdens

  5. WHO PAYS?

  6. Medicaid • A Vast improvement over pre-1965 • Provides benefits for the low-income elderly and disabled • Targets assistance to those in society who most need it

  7. BUT… • You Pay ‘til you’re broke, then Medicaid • Wide variation in benefits by state • In the bulls eye in economic downturns • Obligated for SNF care only • Home care is optional Underfunded, limited benefits, long waiting lists

  8. Stein’s law

  9. Everyone Into the (Risk) Pool • Private Long-Term Care Insurance • Valuable estate planning tool for some • Not a policy solution

  10. Why? • Too Expensive • Too complicated • Why buy if you’ve got Medicaid?

  11. Health Insurance: 250 million covered LTC insurance: 7 million covered The Real Crisis of the Uninsured

  12. SOLUTIONS • DELIVERY ….BUT HOW? • FINANCING:TIME FOR A MANDATE?

  13. DELIVERY • COORDINATE CARE • MAKE IT AVAILABLE AT HOME • Infrastructure: Not just personal aides, also housing, transportation, food, good medical care • But don’t break the bank

  14. FINANCE • DO WE REALLY NEED MEDICAID? • THREE ALTERNATIVES: • ENHANCE PRIVATE LTCi • CREATE NEW SOCIAL INSURANCE • PUBLIC/PRIVATE MIX

  15. ENHANCED LTCi • Sell like Medigap • Expand tax incentives • Expand Partnership Program • More Government Marketing • EACH MAY HELP, NOT THE ANSWER

  16. Social insurance • International Model: • France, Germany, Japan, Korea • Nearly everyone but the UK & US

  17. Medicare Part E • HOW DO YOU TAX? • Income tax surcharge (Burman/Johnson) • Payroll tax surcharge (ala Germany) • VAT—probably with health reform • BUT…WILL AMERICANS PAY A NEW TAX?

  18. Public/Private • Government as First Payer (CLASS Act) • Government as Secondary/Catastrophic: Galston; Tumlinson & Lambrew; Bishop

  19. CLASS Act • In the HELP bill • Benefit: Cash, $50+ daily for life • Auto enroll w/ an opt-out • A premium, not a tax • $65, or is it? • Plus Private Insurance

  20. Catastrophic • Personal responsibility w/ low-income subsidy • True catastrophic coverage • Mandatory insurance or savings?

  21. MODELS FOR FINANCING REFORM

  22. If not now, when? • HELP bill Will include CLASS Act, home care, workforce • Workforce will pass, limited support for others • Waiting for Obama

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