Access to long-term services and supports (LTSS) in the U.S. remains limited, which currently puts seniors in need in a bind.
Their options are often such: spend down on savings and assets in order to qualify for Medicaid, or rely on unpaid family care or other informal services. A new study from the Washington, D.C.-based research and consulting services firm ATI advisory highlights how that issue could be addressed with increased federal investments.
Among its takeaways, the report suggests subsidizing LTSS with a “buy-in” to either the Medicare program or to Medicaid benefits. If such options existed, that would provide access to LTSS and other acute care services for Medicare beneficiaries who are not eligible to receive full Medicaid benefits.
“The current study estimates the potential cost to the federal government of adding an LTSS benefit to the Medicare program or alternatively, as a buy-in option in Medicaid, for individuals without full Medicaid coverage and living in the community,” the report states. “It also estimates the likely number of Medicare beneficiaries aged 65 and older who reside in the community and who need LTSS.”
In the report, ATI notes that similar proposals have been made in the past, including with the Community-Based Independence for Seniors Act of 2019 (CBI-SNP), bipartisan legislation that sought to take a select number of low-income Medicare beneficiaries with two or more activities of daily living (ADLs) limitations and give them access to an HCBS benefit. The CBI-SNP estimated that the program would be budget neutral by the third year.
According to ATI’s study, the “buy-in” would cost anywhere from $1.1 billion to $12.8 billion in federal spending per year, with the scope being limited to Medicare beneficiaries aged 65 and older.
“LTSS need was determined based on level of assistance needed with activities of daily living, level of assistance needed with instrumental activities of daily living, and presence of cognitive impairment,” the report reads. “Different combinations of LTSS coverage, program eligibility, subsidy levels, and longer-term savings expectations were modeled, resulting in annual federal costs for providing subsidized coverage between $1.1 billion and $12.8 billion.”
In order to estimate those costs, four aspects of the plan to increase access were considered: the monthly monetary value of LTSS to be provided to enrolled individuals, per person; the acute care savings that the integration of broader LTSS access would create; the subsidy and eligibility amounts; and the estimated enrollment size for fully subsidized, partially subsidized and unsubsidized individuals.
If enacted, the report suggests that the buy-in could help LTSS access issues for over 675,000 Medicare beneficiaries, and that it could be put into place with an annual cost of around $1.1 billion to $3.1 billion at that number.
There are more than 800,000 seniors and people with disabilities on waiting lists for HCBS in the U.S., according to the American Association of Retired Persons (AARP).
With a limited benefit package, ATI believes that the HCBS could ultimately result in less Medicaid and Medicare expenditures elsewhere.
Plus, the need for LTSS will only continue to grow as the population becomes older.
Medicaid spending currently accounts for 19% of total spending on LTSS. Unpaid care, on the other hand, currently accounts for the vast majority of LTSS spending, at about 67%.
“As the magnitude of individuals with LTSS need rises, so does the long-term cost to both the Medicaid and Medicare programs through increased and fragmented utilization of acute care and institutional settings,” the report states.
While the buy-in would be for Medicare beneficiaries, ATI notes that a pilot program could also be deployed through Medicaid.
“It could also be deployed as a buy-in to Medicaid through an integrated plan,” the report reads. “Medicaid implementation of this benefit could potentially result in lower federal costs than those estimated in this study, depending on the percentage of federal matching amounts.”
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