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Policy Brief: Long-Term Care Funding and Insurance

Michelle Carrillo
Western Washington University

Long-Term Care Funding and Insurance

Summary
The elderly population has become increasingly reliant on Medicaid funding to support
the duration of their stay in long-term care facilities, which is typically until the end of their life.
Long-term services and supports (LTSS) is the care that provides basic services to individuals
such as dressing, bathing, and grooming (Favreault, Gleckman, & Johnson, 2016). About half of
all Americans will need LTSS in their lifetime. Roughly half of costly LTSS expenses are paid
out of pocket, which ends up depleting patients savings and placing them on Medicaid to cover
costs of their care (Favreault, et al., 2015). The U.S. currently does not require elderly patients to
purchase private long term care insurance. Expanding and mandating coverage for LTSS will
help to decrease Medicaid expenditures and it will allow the elderly to retain more of their
savings (Favreault, et al., 2016).
Issue
Medicare reimbursement rates in WA for LTSS are expected to decrease to $82.57 per
patient per day (Williams, 2015, October 3). LTC facilities are at risk for being shut down due to
lack of reimbursement from public and private payers for provided LTSS they offer (Williams,
2015, October 3). WAs aging population, 65 years old and older represents 15% of the state, or
1,027,700 persons; by 2040 this population is expected to represent 22% of the state population,
or roughly 1,996,100 persons (Office of Financial Management, 2015). Medicaid expenditure in
WA during 2014 for LTC facilities were $618,263,038 (The Henry J. Kaiser Family Foundation
(KFF), 2016). Elderly and disabled individuals account for the majority of Medicaid
expenditures in WA (KFF, 2014).

Current patients who are receiving LTSS are impacted by mandating LTC insurance
because they may already be on Medicaid and cannot afford private LTC insurance. It is
estimated that at least 15% of adults 65 years or older will incur $250,000 in LTSS costs
(Favreault, et al., 2016). Those who arent currently utilizing LTSS are impacted because
mandating LTC insurance may allow them to retain their savings. LTC facilities are impacted
because theyll be paid for the LTSS they provide and insurance impacts the amount they are
which may or not be equal to Medicaid. Mandating LTC insurance would enroll most adults,
offset Medicaid expenditures, and indirectly provide subsidies to low-income individuals
because middle to high income earners could pay the for the mandatory tax insurance (Favreault,
et al., 2016). Due to Medicare reimbursement rates being decreased it is necessary to mandate a
LTC insurance policy in WA.
Recommendations
Mandating LTC insurance options by regulating LTC insurance to lower the
premiums, and advocate for LTC insurance to be put into law in WA. LTC facilities in WA can
advocate for policy change at the community level, by creating petitions and gathering signatures
in the community. The facility administrators can contact their voting district representatives and
present these signatures to state and national legislators who can present this to higher appointed
individuals working at the state and federal level in the U.S. This is an urgent matter related to
financial security of LTC facilities and provision of LTSS to patients. The Medicare deficit in
WA has forced closure of 4 LTC facilities and is expected to continue (Williams, 2015, October
3). This proposal to mandate LTC insurance is in line with the ACAs purpose, which was for all
Americans to have access to affordable healthcare services levels in the U.S.

References
Favreault, M. M., Gleckman, H., & Johnson, R. W. (2015). Financing long-term services and
supports: options reflect trade-offs for older americans and federal spending. Health
Affairs, (34)12, 1-12. doi: 10.1377/hlthaff.2015.1226
Favreault, M. M., Gleckman, H., & Johnson, R. W. (2016). How much might new insurance
programs improve financing for long-term services and supports? UrbanInstitute.org.
Retrieved from http://www.urban.org/research/publication/how-much-could-financingreforms-long-term-services-and-supports-reduce-medicaid-costs
Office of Financial Management. (2015). State of Washington forecast of the state population.
ofm.wa.gov. Retrieved from http://www.ofm.wa.gov/pop/stfc/stfc2015/stfc_2015.pdf
The Henry J. Kaiser Family Foundation. (2016). Distribution of Medicaid spending on long term
care. Retrieved from http://www.kff.org
The Henry J. Kaiser Family Foundation. (2014, June). The Washington state health care
landscape. Retrieved from http://www.kff.org
Williams, B. (2015, October 3). Medicaids nursing home wage rates unfairly based on location.
The Herald of Everett, Washington. Retrieved from www.heraldnet.com