The federal government should make it easier for states to fund home- and community-based services (HCBS) through their Medicaid programs, as part of a series of reforms to how senior care is financed.
That’s the recommendation in a new report from the Bipartisan Policy Center’s (BPC) Long-Term Care Initiative.
The Initiative was formed in 2013, under the leadership of former Republican Wisconsin Governor and U.S. Health and Human Services Secretary Tommy Thompson, former Senate Majority Leaders Tom Daschle (D) and Bill Frist (R), and Dr. Alice Rivlin, who was Congressional Budget Office Director in the Clinton administration. The Initial Recommendations to Improve the Financing of Long-Term Care report, released Monday, includes a section on expanding HCBS by streamlining the waiver process.
Currently, states receive waivers of federal Medicaid requirements in order to include home health and other services, and approximately 3 million individuals receive HCBS each year thanks to these waivers. Still, the amount of HCBS varies dramatically among states, in part because the process of getting waivers through state plan amendments (SPAs) is too complicated, the report states.
“Streamlining and consolidating existing waiver authority into a single SPA would assist states seeking to expand the availabilityof HCBS,” the authors write. “Combining features of existing SPAs would permit states to offer HCBS in a way that moves toward eliminating Medicaid’s bias for institutional or facility-based care, give states the flexibility and predictability they need to expand services to best address the needs of varying populations, and maintain essential provisions of federal law that allow individuals to direct their own care.”
Specifically, a streamlined waiver would encompass a number of features. These include:
In addition to the streamlined waiver process, HCBS services could be better supported by more affordable private insurance, the report proposes.
Three potential “retirement long-term care insurance” plans are outlined in the report, ranging from $100 daily maximum benefits for a two-year period to a $200 daily maximum for three years. The plans would have various deductibles and elimination periods, and all would include 20% coinsurance. The beneficiary would have discretion over how to apply his or her benefits—they could go toward assisted living, home health or other services deemed eligible.
“Many features, such as the premium design and inflation protection, would be standard among all retirement LTCI,” the report states. “Product features would include cash deductibles, coinsurance, inflation protection, a non-forfeiture benefit, and an innovative non-level premium design that would bemore sustainable for carriers and offer consumers the opportunity to benefit from lower-than-expected claims experience.”
Certain regulatory and legal barriers would have to be lifted in order for these plans to be offered. In particular, current law should be altered so that younger employees can tap into 401(k) and other retirement accounts to purchase long-term care insurance, the report proposes. Employers who offer these plans should be extended safe harbor protections to limit fiduciary liability, and the plans also should be available on state and federal exchanges. This report and the additional work forthcoming this year reflect an emerging consensus among senior care advocates about the best approaches for financing reforms, according to Long-Term Quality Alliance Executive Director Larry Atkins, Ph.D. He moderated a panel discussion about the BPC report on Monday.
“I think there’s been a concerted effort in [Washington, D.C.] to try to bring these different pieces in place together … because the only way we’re going to advance this is start to build a large base of support on the business side, the consumer side and the practitioner side,” Atkins told SHN. “I think it’ll help getting sponsors on the Hill, for them to feel like we’re not having a big argument about how to do this, we’re all thinking about this in a similar way. Some of us may decide to tweak it one way or a different way, but hopefully we’ll have enough common ground to have a well-informed and rational policy discussion and make progress [on this issue], even though the political situation on the Hill may get in the way in other areas.”
The bipartisan nature of the new report is notable given that the Congressional Long-Term Care Commission split largely along partisan lines in 2014. Tasked with providing recommendations on long-term care financing reform, the Commission provided two separate reports on the topic, with one emphasizing private sector involvement and the other focused on the government’s role.
But the LTC Commission lacked important data on the services and supports people are receiving and the associated lifetime costs, said Atkins, who was executive director of the group. That data subsequently was compiled and released and by The Urban Institute and actuarial/consulting firm Milliman, and enabled greater consensus in this BPC report. This report is “taking it to the level,” Atkins said, but he was quick to emphasize that more data and research still is needed to support additional recommendations and refine these.
“I still think there’s a way to go,” he said.
Written by Tim Mullaney