Everyone gets one step closer to old age with every passing year. With a new year ahead of us, perhaps that fact deserves some renewed consideration. Aging in the United States is an extremely fraught undertaking. It is past time for Congress to act so Americans can age in a much more humane and less costly fashion than is currently possible.
The issue is long term care: the average elderly American will experience two years of needing assistance with the tasks of everyday living. Whether it’s assisted living or home care, these individuals do not need a nursing home, but simply some consistent daily support.
But that is not what our Medicare and Medicaid systems are currently set up to deliver. These programs were set up in 1965, when society was vastly different. Assisted living and home care back then were typically provided by offspring — overwhelmingly adult daughters or daughters-in-law whose work was unpaid. Even more recently, unpaid caregiving for the elderly was valued at almost half a trillion dollars in 2017, and yes, daughters were the second most likely to offer that care, after spouses.
Society has changed since 1965. For one, more Americans do not have children. A new Pew Research report notes that a record 25% of Americans currently aged 40 have never been married. At the same time the birth rate in the U.S. has cratered to a subreplacement rate of 1.6 children per woman on average. Furthermore, in the 1960s, only 38% of American women worked full-time. That figure is now 56%, with most households dependent on two incomes to get by. The very thing that the policymakers who created Medicare and Medicaid assumed would be present forever — a willing and invisible army of adult daughters who did not need paid work to keep their household afloat — is gone for good.
And so Americans are caught in a vicious trap caused by this anachronism. Medicare will not pay for assisted living and will only pay for home care for 21 days, and this care must be provided by professionals — and that only if specialized home health care is also required. That means that at some point for most Americans, the financial resources needed to obtain home care will quickly become beyond their means.
And when that day arrives, the trap closes: many Americans are forced onto Medicaid to pay for the care they need that Medicare will not provide. Medicaid will pay for nursing home care, but will not pay for assisted living, despite the fact that assisted living is on average only slightly more than half the cost of a nursing home. Medicaid does offer optional limited waivers for the provision of some home care, but the waiting list for these limited spots is so long that an individual may have to wait 5 years or more to obtain the help they need now.
And agreeing to go on Medicaid is a real Faustian bargain. Unless you had thousands of dollars to pay a lawyer to set up special trusts to shield your assets — and did so more than five years before you needed Medicaid — you will have to spend down your income and assets to qualify. In short, you must impoverish yourself, as well as your spouse if you are married, to qualify for Medicaid. And once you die, if there is anything left in your estate, such as your house, your heirs may not be able to inherit it because Medicaid will demand to be paid back first.
There are other minefields. Some assisted living facilities may agree to take you in as a paying customer, and then promise to keep you on once they have taken all your money and you have to go on Medicaid. It turns out those are pie-crust promises, easily broken; many of these facilities will turn you out on the street to free up your bed for a new paying customer once you have no money. And long-term care insurance? Policies are increasingly rare and premiums are astronomical, well out of reach for the average American.
Wealthy Americans can avoid this heartbreaking trap, of course. But the middle class is firmly caught in it. This system of forcing non-wealthy Americans to go into often sub-standard nursing home care as their only feasible option is actually highly inefficient. It costs the government far more to keep you in a nursing home under Medicaid than it would to help you pay for assistance with daily tasks in your home for a few hours a day. According to the National Council on Aging, “On average, home care costs about $26,000 a year, while nursing home care costs roughly $90,000 or more.”
We also must touch on the fact that reimbursement to providers by Medicaid is so paltry that the industry is always cutting corners and always paying workers a pittance as a wage. This translates into a growing shortage of facilities and workers, just at the time when the population of elderly Americans is exploding.
Our current system is truly is a perfect and perfectly destructive storm. And if the goal of Medicare and Medicaid is to provide humane care to elderly Americans, the system is failing grotesquely. The New York Times collected heartbreaking stories; here’s one:
“After Stan Markowitz, a former history professor in Baltimore with Parkinson’s disease, and his wife, Dottye Burt, 78, exhausted their savings on his two-year stay in an assisted-living facility, he qualified for Medicaid and moved into a nursing home.
“He was required to contribute $2,700 a month, which ate up 45% of the couple’s retirement income. Ms. Burt, who was a racial justice consultant for nonprofits, rented a modest apartment near the home, all she could afford on what was left of their income.”
Too many hard-working Americans spend their final days without the help they need, or forced into penury and unwanted, unneeded nursing home care. The families who love them struggle as well because there are no good options within the means of the average American family.
Congress must act. There are some good ideas out there for how to fix this broken system. Clearly no one should be in a nursing home when what they actually need is less expensive home care or assisted living, and the government could cut its costs significantly by making those less expensive options the mandatory defaults. Clearly family members should be deemed qualified to provide home care and receive reimbursement for their labor, which would help clear those waiting lists for home assistance. Clearly the government should ban evictions of Medicaid nursing home patients.
But more importantly, it’s time to move away from the model where seniors must agree to penury to get modest help with their daily needs. The government must intervene in the insurance market to make long term care insurance viable, thus taking the provision of that care out of Medicaid and into an insurance model.
The most promising proposed legislation I’ve seen to that end was the WISH Act, whose sponsor was not re-elected, and so the bill is now dead. It would have created a small payroll tax (0.6%, split between worker and employer) to establish a fund for such insurance, which would pay out the median cost of six hours per day of home health care, currently about $120, if an individual was found to have difficulty with at least two daily care categories. The bill would also enable that money to be paid directly to the insured so they could choose their provider freely, including family members.
The second session of the 118th Congress will convene this month. Pester your senators and representatives about this issue, because before you know it, every one of us, and every one of our loved ones, will face this vicious trap. Our country can and must do better.
Valerie M. Hudson is a university distinguished professor at the Bush School of Government and Public Service at Texas A&M University and a Deseret News contributor. Her views are her own.