Lengthy-term companies and helps (LTSS) embody the broad vary of paid and unpaid medical and private care companies that help with actions of every day residing (equivalent to consuming, bathing, and dressing) and instrumental actions of every day residing (equivalent to making ready meals, managing treatment, and housekeeping). They’re supplied to individuals who want such companies due to getting old, persistent sickness, or incapacity, and embrace companies equivalent to nursing facility care, grownup daycare applications, dwelling well being aide companies, private care companies, transportation, and supported employment. These companies could also be supplied over a interval of a number of weeks, months, or years, relying on a person’s well being care protection and stage of want.
Greater than 6 million individuals use paid long-term companies and helps (LTSS) delivered in dwelling and group settings and greater than 2 million individuals use LTSS delivered in institutional settings, based on CBO estimates. An unknown, however probably bigger variety of individuals, use unpaid LTSS supplied by household, buddies, or neighbors. Just about all individuals ages 65 and older and about 8 million individuals below age 65 with disabilities have Medicare, however Medicare typically doesn’t cowl LTSS. (See Field 1 for extra info.) Most individuals who use paid LTSS both pay for it immediately or have companies coated below Medicaid. State Medicaid applications should cowl LTSS supplied in nursing houses, whereas protection for many dwelling and community-based companies (HCBS) is non-compulsory. Eligibility for Medicaid LTSS is advanced and varies extensively by state. To qualify for protection of LTSS below Medicaid, individuals should meet state-specific eligibility necessities relating to their ranges of revenue, wealth, and useful limitations.
Along with long-standing questions in regards to the prices, affordability, and protection of LTSS, there are additionally longstanding challenges discovering sufficient employees to supply LTSS for individuals who want such companies, and the COVID-19 pandemic exacerbated these points significantly. As of January 2024, employment ranges in most LTSS settings remained 4% under pre-pandemic ranges. The Biden Administration finalized two guidelines supposed to handle the LTSS workforce and entry to companies. To deal with workforce shortages in nursing services, the Administration finalized a rule that might create new staffing necessities in nursing services, require state Medicaid businesses to report on the p.c of Medicaid funds for institutional long-term companies and helps which are spent on compensation for direct care employees and help workers, and supply funding for people to enter careers in nursing services. The Administration additionally finalized a rule aimed toward guaranteeing entry to Medicaid companies, which included a number of provisions aimed particularly at LTSS supplied in individuals’s houses and the group, together with requiring states to spend least 80% of complete funds for sure HCBS on compensation for direct care employees. Along with federal motion, many states have adopted fee price will increase for nursing services and HCBS suppliers with the objective of boosting staffing ranges, as reported to KFF in a 2023 survey.
1. Lengthy-term companies and helps are extraordinarily costly and never typically coated by Medicare or medical health insurance.
The costs of well being care companies are fairly excessive, however a larger share of people that use LTSS pay full value for that care when in comparison with different well being care companies. The distinction between LTSS and different well being care spending stems from the truth that personal medical health insurance typically doesn’t cowl ongoing LTSS and Medicare’s protection is restricted to particular circumstances (see Field 1). The Division of Well being and Human Companies estimates that a mean American turning 65 at this time will incur $120,900 in future LTSS prices, with households paying for over one-third of that themselves. That is increased than the 17% of general LTSS bills paid for out-of-pocket proven in Determine 2 as a result of general LTSS bills embrace bills for many who are below 65.
In 2023, the median annual prices of care within the U.S. had been $62,400 for full-time homemaker companies (individuals who assist with instrumental actions of every day residing equivalent to making ready meals and doing laundry), $68,640 for full-time dwelling well being aide care, $116,800 for a non-public room in a nursing dwelling, and $288,288 for round the clock dwelling well being aide companies, all of which far exceed the median revenue for Medicare beneficiaries (about $36,000 in 2023, Determine 1). Such prices would additionally shortly exhaust the median financial savings for Medicare beneficiaries in 2023 ($103,800). Though nursing facility prices could also be increased than the prices of some home-based companies, nursing facility prices embrace round the clock monitoring and the prices of room and board. For individuals residing in residential settings, the prices of sustaining a house equivalent to lease, a mortgage, and different family bills are paid individually from the prices of LTSS. The common prices of an assisted residing facility ($64,200) solely embrace the prices of room and board, so any LTSS bills could be added to that complete. Many individuals might use a number of companies concurrently, so their complete annual prices could also be like these of nursing facility or round the clock care.
Field 1: Does Medicare Cowl LTSS?
Medicare is the federal medical health insurance program established in 1965 for individuals ages 65 or older, no matter revenue or medical historical past, and later expanded to cowl individuals below age 65 with long-term disabilities. Right now, Medicare gives medical health insurance protection to 66 million individuals, together with 58 million individuals age 65 or older and eight million individuals below age 65. Medicare covers a complete set of well being care companies, together with hospitalizations, doctor visits, and prescribed drugs.
Medicare doesn’t typically cowl long-term care companies however does cowl as much as 100 days of expert nursing facility care following a qualifying hospital keep and covers dwelling well being companies for individuals who want part-time or intermittent expert companies. As a part of the house well being profit, Medicare covers nursing, bodily, speech and occupational remedy, and likewise covers dwelling well being aide companies, however just for individuals getting expert nursing care on the similar time, and never on a full-time foundation. KFF polling exhibits that 4 in ten adults general incorrectly imagine that Medicare is the first supply of insurance coverage protection for low-income individuals who want nursing facility care or dwelling care over an extended time period.
Medicare covers expert nursing look after as much as 100 days every profit interval in an authorized SNF after a qualifying hospitalization.
For individuals who are ”homebound,” Medicare pays for nurses and therapists to supply companies within the dwelling if the beneficiary wants expert companies. Being homebound doesn’t imply that Medicare beneficiaries are unable to depart their houses, however quite that leaving the house is tough or not beneficial due to sickness or damage; or that one is generally unable to depart the house as a result of doing so is a significant effort. Underneath these circumstances, Medicare will cowl dwelling well being care companies supplied by way of an authorized dwelling well being company for as much as 28 hours per week, with extra intense care permissible for a short while interval when decided mandatory by a health care provider.
Traditionally, dwelling well being and expert nursing companies had been denied in Medicare for beneficiaries when the aim was for upkeep quite than for rehabilitation, however the Jimmo settlement in 2013 clarified that protection of expert nursing and residential well being care in Medicare was contingent upon beneficiaries demonstrating a necessity for expert care quite than a requirement that beneficiaries present potential for his or her situation to enhance.
2. Medicaid paid for greater than half of the $415 billion that the US spent on LTSS in 2022, most of which went to dwelling and community-based companies.
In 2022, the U.S. spent over $400 billion on LTSS, most of which went to dwelling and community-based companies (HCBS), primarily based on KFF estimates of annual Nationwide Well being Expenditure (NHE) knowledge. Spending on dwelling and community-based companies was $284 billion and the remaining $131 billion was spent on institutional LTSS equivalent to nursing facility care (Determine 2). Medicaid paid greater than half (61%) of complete US spending on all LTSS, adopted by out-of-pocket spending (17%), and different private and non-private payers paid the remaining 21%. (See Field 2 for an outline of what companies and payers are included and excluded from LTSS spending within the KFF evaluation.)
Field 2: How does KFF outline LTSS within the NHE knowledge?
Not like different sources of data on well being care spending, the NHE use an accounting construction that captures all expenditures of well being care items and companies and funding within the well being care sector. Expenditures are categorized into high-level service classes and by supply of fee. Information sources embrace federal administrative knowledge, family and particular person surveys, surveys of companies, and financial knowledge from the Bureau of Labor Statistics and the Bureau of Financial Evaluation.
KFF defines LTSS to incorporate spending for residential care services, nursing houses, dwelling well being companies and HCBS waivers. HCBS waivers might embrace a variety of companies equivalent to grownup daycare, dwelling well being, private care, transportation, and supported employment. Underneath the NHE methodology, assisted residing companies are in each HCBS and institutional classes. Funds made to the assisted residing services themselves are counted as institutional care except they’re paid for by Medicaid, by which case they’re thought of HCBS. For companies equivalent to dwelling well being and private care which are supplied to individuals in assisted residing services, they’d be thought of institutional care if supplied by way of the ability, however HCBS if supplied by way of one other supplier equivalent to an affiliated dwelling well being company.
KFF’s definition of LTSS consists of spending from any of the next sources: Medicaid, people, the Kids’s Well being Insurance coverage Program, the Indian Well being Companies, the Substance Abuse and Psychological Well being Companies Administration, the Veterans Well being Administration, normal help, different federal applications, different state and native applications, college well being, and different personal revenues. Medicaid expenditures might embrace some dwelling well being spending that’s rehabilitative and never LTSS.
KFF excludes spending from sure payers. Inside the excluded spending is $94 billion in Medicare spending, most of which is post-acute care, however a few of which is dwelling well being spending that is likely to be thought of LTSS (see Field 1). KFF additionally excludes spending from personal insurance coverage as a result of a lot of these expenditures are for rehabilitation and never LTSS. Usually, personal long-term care insurance coverage reimburses individuals for the bills they pay out-of-pocket and could be categorized as out-of-pocket spending within the NHE knowledge. KFF’s method would exclude personal long-term care spending in instances the place personal plans make funds on to a corporation, which is almost definitely for people utilizing nursing facility care. Such conditions are anticipated to be unusual given few people obtain advantages from long-term care insurance coverage in any given yr (see Determine 6).
3. Among the many 6 million individuals who use Medicaid LTSS within the U.S., most are utilizing HCBS and over half are below 65.
In 2021, three-quarters of the 5.7 million individuals who used Medicaid LTSS had been receiving HCBS, however this ranged from 49% in Florida to 98% in Oregon (Determine 3.1). The bigger share of individuals receiving care in the neighborhood versus in an establishment displays initiatives to make dwelling and community-based care extra extensively accessible lately and to take away what has been known as the “institutional bias” in Medicaid. Analyses of Medicaid spending on LTSS present that the proportion of LTSS spending that pays for HCBS has elevated from solely 10% in 1988 to 62% in 2020. Whereas the variety of individuals utilizing Medicaid HCBS exceeds the quantity who use institutional care nationally, Florida nonetheless gives companies to extra individuals completely in nursing services and different institutional settings than in dwelling and community-based settings.
Over half (57%) of Medicaid enrollees who use LTSS are below 65: Amongst Medicaid enrollees who use HCBS, 63% are below age 65 in contrast with 30% of those that use institutional LTSS (Determine 3.2). LTSS are generally related to individuals ages 65 and older, however many youthful enrollees use LTSS due to persistent sickness or incapacity. The remaining 44% of enrollees who use LTSS are 65 and older. As compared, solely 6% of Medicaid enrollees who don’t use LTSS are ages 65 and older. Amongst individuals who use HCBS, 14% are below age 19, and 49% are ages 19-64, whereas over two-thirds of people that use institutional LTSS are ages 65 and older.
4. On common, Medicaid enrollees who use LTSS have Medicaid spending eight occasions increased than those that don’t use LTSS.
In 2021, Medicaid per particular person spending was considerably increased for enrollees who used institutional care ($53,666), than for enrollees who used HCBS ($38,275), which was about 8-times larger than common Medicaid spending for enrollees who didn’t use any LTSS ($5,372) (Determine 4). Per-enrollee spending for many who don’t use any LTSS consists of kids who comprise 40% of Medicaid enrollees and have a tendency to have a lot decrease per-person spending. Kids who use LTSS have spending ten occasions increased than kids who don’t use LTSS ($30,933 versus $3,300). Individuals who used Medicaid LTSS comprised 6% of Medicaid enrollment however 34% of federal and state Medicaid spending which incorporates the prices of LTSS, managed care premiums, and different companies equivalent to hospital care and prescribed drugs. (It isn’t potential to say what share of Medicaid spending pays for LTSS as a result of complete spending consists of funds to managed care plans, and the break up of managed care funds by sort of care is unknown). In 2021, Medicaid spending for the 5.7 million enrollees who used Medicaid LTSS, totaled practically $234 billion. Excessive per-person Medicaid spending amongst enrollees who use LTSS probably displays the widely excessive value of LTSS and extra intensive well being wants amongst such teams that result in increased use of different well being care companies and medicines as nicely.
5. About 700,000 individuals are on ready lists or curiosity lists for Medicaid HCBS, most of whom have mental or developmental disabilities.
House- and community-based companies (HCBS) waivers permit states to supply a variety of advantages and to decide on—and restrict—the quantity of people that obtain companies. The one HCBS that states are required to cowl is dwelling well being, however states might select to cowl private care and different companies equivalent to personal responsibility nursing by way of the Medicaid state plan. Advantages supplied by way of a state plan are typically accessible to all Medicaid enrollees who want them. States can also use HCBS waivers to supply expanded private care advantages or to supply extra companies equivalent to grownup day care, supported employment, and non-medical transportation, although they’ll restrict the quantity of people that obtain these companies. States’ potential to cap the variety of individuals enrolled in HCBS waivers may end up in ready lists when the variety of individuals searching for companies exceeds the variety of waiver slots accessible. Ready lists replicate the populations a state chooses to serve, the companies it decides to supply, the sources it commits, and the supply of employees to supply companies. A brand new rule on Medicaid entry would require states to begin reporting the variety of individuals on sure sorts of Medicaid waivers generally known as “1915(c)” in 2027.
In 2023, a 50-state survey of Medicaid HCBS applications discovered that there have been over 692,000 individuals on ready lists or curiosity lists, and most of the people on ready lists have mental or developmental disabilities (I/DD), notably in states that don’t display for waiver eligibility earlier than putting somebody on a ready listing (Determine 5). Individuals with I/DD comprise 88% of ready lists in states that don’t display for waiver eligibility, in contrast with 51% in states that do decide waiver eligibility earlier than putting somebody on a ready listing. Individuals with I/DD comprise nearly three-quarters (72%) of the full waiver ready listing inhabitants. Seniors and adults with bodily disabilities account for one-quarter (25%), whereas the remaining share (3%) consists of kids who’re medically fragile or know-how dependent, individuals with traumatic mind or spinal wire accidents, individuals with psychological sickness, and other people with HIV/AIDS. People who find themselves on HCBS ready lists are typically not consultant of the Medicaid inhabitants or the inhabitants that makes use of HCBS. Most individuals on ready lists have I/DD, however KFF evaluation exhibits that individuals with I/DD comprise fewer than half of the individuals served by way of 1915(c) waivers (the most important supply of Medicaid HCBS spending).
6. In 2021, personal long-term care insurance coverage paid out simply 80,000 claims.
In 2021, about 7.1 million individuals nationwide had personal long-term care insurance coverage (LTCI), together with standalone LTCI and likewise an array of merchandise that pair life insurance coverage or an annuity with some long-term care protection (Determine 6). The age and different demographics of those that truly maintain LTCI insurance policies is unknown. In 2021, premiums for LTCI averaged $1,860 for the yr. Whereas these premiums might sound low relative to non-public medical health insurance premiums or to the prices of LTSS, LTCI is bought earlier than an individual develops a necessity for LTSS and most of the people pay premiums for a few years with out utilizing any advantages. That is among the causes that solely round 80,000 claims had been paid by way of LTCI advantages in 2021. It isn’t unusual for individuals to die with out utilizing advantages or to let their protection lapse in response to rising premiums (or different elements) earlier than they qualify for the advantages. These are a number of the motivating elements for merchandise that mingle life insurance coverage with LTCI, though in 2021, the general public with LTCI nonetheless had standalone insurance policies (6.3 million).
Not like personal medical health insurance, it’s pretty unusual for employers to supply and/or subsidize LTCI for his or her workers. A KFF survey confirmed that amongst companies providing well being advantages in 2023, 25% supplied LTCI and amongst these, solely 39% contributed to the prices of protection. There are a variety of limitations of LTCI. Many insurance policies don’t have inflation safety, restrict eligibility for companies, don’t cowl all bills, and have lifetime limits. Some LTCI insurance policies additionally don’t provide non-forfeiture advantages, which means individuals who pay premiums for years might not get the premiums they’ve paid again in the event that they let their coverage lapse within the occasion of nonpayment (which can occur resulting from elevated premiums after a price enhance). These unused premium funds will be particularly appreciable for individuals who join when comparatively younger. Insurers may additionally exit of enterprise earlier than protection is required.
7. Longstanding workforce shortages amongst LTSS suppliers had been exacerbated by the COVID-19 pandemic.
The pandemic enormously exacerbated longstanding shortages of LTSS employees. Employment ranges in all well being care jobs dropped sharply at the beginning of the pandemic, however for many well being care sectors, together with hospitals, employment began to rebound as early as spring 2020. Nonetheless, employment within the LTSS sectors continued to fall nicely into 2021 and for nursing services, into the start of 2022. Latest evaluation on the Peterson-KFF Well being System Tracker exhibits that the variety of employees within the LTSS sector (all nursing and residential care in Determine 7) was 4% decrease in January 2024 than in February 2020. The discount in employees is largest within the expert nursing care settings, the place the workforce stays 9% decrease than in February 2020. Moreover, a 50-state survey of Medicaid HCBS applications discovered that every one states reported shortages of HCBS employees, most regularly amongst direct help professionals, private care attendants, nursing workers, and residential well being aides. Most states (43) additionally reported everlasting closures of HCBS suppliers inside the final yr, with some closures reflecting supplier shortages. These jobs are mentally and bodily demanding, and direct care employees typically agree that the wages are low and don’t replicate the calls for of the work.
Past the formally paid workforce, there are additionally hundreds of thousands of household caregivers (most of whom are unpaid) who play an vital position in filling care wants for older adults and other people with disabilities. In 2021, about 38 million household caregivers supplied, on common, 18 hours of care per week. Household caregivers take care of excessive ranges of stress, typically juggling work and faculty on high of their caregiving, in addition to wrestle with penalties of misplaced revenue together with housing and meals insecurity. Households might present care out of affection or a way of duty, however many present care as a result of they’ll’t entry paid care or are offering extra care than they really feel in a position to give primarily based on their coaching and different life duties.
8. Between 2015 and 2023, the typical hours of care that nursing facility residents obtained decreased.
The adequacy of staffing in nursing houses has been a longstanding concern, and the excessive mortality price in nursing services through the COVID-19 pandemic highlighted and intensified the results of insufficient staffing ranges. Between July 2015 and July 2023, the typical hours of care that nursing facility residents obtained declined by 9%, from 4.13 hours to three.77 hours (Determine 8). The decline occurred over your complete interval however the variety of hours of care per resident elevated briefly within the yr 2021. The comparatively increased staffing hours in 2021 mirrored the truth that the variety of residents declined extra shortly than the variety of workers hours did between 2020 and 2021. Each the typical variety of deficiencies and the share of services with severe deficiencies elevated over the identical time interval, which can partially replicate decrease staffing ranges.
On April 22, 2024, the Facilities for Medicare and Medicaid Companies (CMS) launched a highly-anticipated ultimate rule that created new necessities for nurse staffing ranges in nursing services. The ultimate rule requires services to have not less than 3.48 hours of nursing care per resident per day beginning in 2026 for city services and in 2027 for rural services. In later years (2027 for city services and 2029 for rural services), 0.55 of these hours have to be supplied by a registered nurse and a pair of.45 hours from a nurse aide. The remaining 0.48 hours could also be supplied by any nurse workers sort, together with LPNs. The rule additionally requires services to have a registered nurse on workers 24 hours per day, 7 days per week; strengthens staffing evaluation and enforcement methods; creates new reporting necessities relating to Medicaid funds for institutional long-term companies and helps (LTSS); and gives $75 million for coaching for nurse aides. KFF estimates that solely 19% of nursing services would presently meet the three staffing hour minimums required within the ultimate rule if it took impact instantly (3.48 hours general, 0.55 RN hours, and a pair of.45 nurse aide hours).
9. States have taken steps to extend fee charges for home-based care, however workforce shortages persist.
In KFF’s survey of states’ HCBS applications, all responding states reported taking actions to handle workforce shortages (Determine 9). The commonest technique reported was growing fee charges to HCBS suppliers (48 states). Nonetheless, even with the upper fee charges, among the many states that had been in a position to report time-based fee charges for private care suppliers, most pay below $20 per hour. Some states applied a everlasting fee price enhance, however different states reported that fee price will increase for not less than a number of the employees had been momentary. Different methods reported embrace creating or increasing employee training and coaching applications (42 states) and providing incentive funds to recruit or retain employees (41 states). Much less widespread methods included establishing or elevating the state minimal wage (20 states) and providing paid sick go away for employees (19 states). States additionally reported a number of different sorts of initiatives to strengthen the workforce, together with creating platforms or help techniques to attach job seekers with employers and positions, launching a social media marketing campaign, and offering outreach to potential workers. In one other survey of states, most states reported growing fee charges for nursing services and HCBS in 2023 and 2024.
Past state efforts, the Biden Administration has additionally taken steps to extend fee charges for the direct care workforce. A ultimate rule on entry to Medicaid companies would require states to reveal that HCBS fee charges are sufficient to make sure a adequate direct care workforce and that not less than 80% of complete funds for specified HCBS are compensation to direct care employees. In a parallel vein, the ultimate nursing facility staffing rule would require state Medicaid businesses to report the p.c of Medicaid funds for institutional long-term companies and helps (LTSS) which are spent on compensation for direct care employees and help workers.
10. An getting old inhabitants will want extra long-term companies and helps.
A KFF interactive on the getting old inhabitants exhibits that the p.c of the US inhabitants that’s ages 65 and older is projected to develop from 17% in 2020 (56 million individuals) to just about 25% in 2060 (95 million individuals) (Determine 10). Throughout this era, the share of older adults who’re of their 80s, 90s, and older may even develop. One in twenty of all individuals within the U.S. is projected to be 85 or older by 2060, a gaggle that’s more likely to have the very best charges of LTSS wants and utilization as 1 / 4 of them are frail. Advances in assistive and medical know-how that permit individuals with disabilities to be extra unbiased and to stay longer, along with the getting old of the child boomers, will probably end in elevated want for LTSS over the approaching many years. An HHS report discovered that after age 65, over half of individuals would sooner or later need assistance with not less than two actions of every day residing, over half would use any sort of paid LTSS, and over one-third would use some nursing dwelling care. Anticipated charges of LTSS want and use are highest amongst individuals with lifetime earnings within the backside revenue quintile, who’ve the fewest sources to pay for such care. Different analysis exhibits that amongst individuals ages 65 and older, those that are Black or Hispanic are more likely to develop a average or extreme LTSS than those that are White and have considerably decrease monetary sources to pay for LTSS. Racial and financial disparities amongst people experiencing LTSS wants can also have long-term intergenerational results that may disproportionately have an effect on individuals of shade. The getting old of the inhabitants raises tough questions on easy methods to handle the challenges of protection, affordability, financing, and workforce shortages to satisfy the wants of a rising inhabitants in want of LTSS.
