Most of us fear getting stuck in the river Styx: not on shore among the living, but not dead yet. And most of us will need “help” during that journey, perhaps long before the journey starts.
“Help,” a gentle euphemism, ranges from 24-hour monitoring to occasional meals, from outdoor ramps to indoor elevators, from housekeepers to nurses.
”Help” costs money. Wealthy people can buy help. Most Americans cannot.
For them, the question looms: Who will rescue us if we are stranded on the journey, needing more care than our savings, or our overwhelmed familes can provide?
Forget Uncle Sam: He is not about to rescue us. “Government” will pay for “long term care” care only for Americans sufficiently poor, without assets. In 1988, Congress added a “catastrophic” long-term care benefit to Medicare; in October 1989 it repealed the Act. In March 2010 Congress added CLASS (Community Living Assistance Services and Support Program) to the Affordable Act; in October 2011, Congress dropped CLASS.
Forget too the much-vaunted “private sector.” Although conservatives trust capitalism, not government, to solve most problems, long-term care insurance is not a business school success story, but one of misplaced optimism. When insurers launched their policies, they saw mega-profits. With premiums set low for young enrollees, insurers expected to amass enough money to pay for care when those young enrollees aged. They expected enrollees to drop out. They expected low costs. They expected ever-high interest rates. Their expectations failed.
Enrollees, who expected genuine protection, got steep premium hikes, with restricted benefits (e.g., only skilled services, exclusions for dementia, waiting periods before coverage takes place). Complaints found their way to state attorneys general.
The number of insurers selling policies shrunk from 125 in 2002 to 15 in 2014. Crucially, states are now approving requests for even steeper premium hikes.
The new insurers-on-the-block are the combined life-insurance-plus-long-term-care hybrids. When you need long-term care, the policy pays for care. If you die before exhausting that benefit, the policy switches to life insurance.
If the Americans who need help are left adrift, so are states.
States, which pay roughly half the Medicaid tab, confront rising costs. Patients who enter long-term care as “private payers” eventually navigate to the Medicaid rolls (sometimes with the aid of estate attorneys, though “clawback” provisions enable states to recoup money that the older person has given to children). Not surprisingly, states want to pare their costs.
So does Uncle Sam, which pays the rest of the Medicaid tab. The federal Deficit Reduction Act of 2005 blessed “partnerships.” Today 47 states (holdouts: AK, HI, MS) allow residents to buy a set amount of coverage. When that coverage runs out, the state will pay for the remaining years. The residents will spare their estates for heirs. Connecticut, one of the original “partnership” states (with CA, IN, NY), reports savings, yet the faltering long-term-care industry does not point to partnerships as a []deus ex machina[].
Washington State is proposing a solution: public long-term care insurance. The state would levy a small tax (called a premium, 0.58% of wages) on workers, not solely retirees anticipating the help they might need.That distinction is important: CLASS relied on enrollees to choose to pay $50. Since middle-income Americans may find other uses for that money — in fact, middle-income Americans are hard-pressed to pay for health insurance, let alone long-term-care insurance, the most optimistic Pollyanna wouldn’t predict a surge of middle-age enrollees in a policy that might, perhaps, cover their needs in the future.
The state of Washington proposes to cap benefits at $100 a day for a year — not enough for more than a few months in a nursing home; but it would pay for enough home care to ease many journeys.
A lot of Americans, approaching the River Styx, cheer Washington’s plan on.
Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email retsinas@verizon.net.
From The Progressive Populist, June 15, 2019
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