the future of long-term care: what is its place in the health reform debate? howard gleckman tax...
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The Future of Long-Term Care: What Is Its Place in the Health
Reform Debate?Howard Gleckman
Tax Policy Center
June 16, 2009
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
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
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
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
Everyone Into the (Risk) Pool
• Private Long-Term Care Insurance
• Valuable estate planning tool for some
• Not a policy solution
The Real Crisis of the Uninsured
• Health Insurance: 250 million covered
• LTC insurance: 7 million covered
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
FINANCE
• DO WE REALLY NEED MEDICAID?
• THREE ALTERNATIVES:
• ENHANCE PRIVATE LTCi
• CREATE NEW SOCIAL INSURANCE
• PUBLIC/PRIVATE MIX
ENHANCED LTCi
• Sell like Medigap
• Expand tax incentives
• Expand Partnership Program
• More Government Marketing
• EACH MAY HELP, NOT THE ANSWER
Social insurance
• International Model:
• France, Germany, Japan, Korea
• Nearly everyone but the UK & US
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?
Public/Private
• Government as First Payer (CLASS Act)
• Government as Secondary/Catastrophic: Galston; Tumlinson & Lambrew; Bishop
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
Catastrophic
• Personal responsibility w/ low-income subsidy
• True catastrophic coverage
• Mandatory insurance or savings?