Sustainable Solutions for America’s Chronic Care Crisis

As the U.S. population rapidly ages and demand for long-term services and supports (LTSS) steadily rises, policymakers should take steps to ensure the health care system is equipped to deliver the high value care older adults and individuals with disabilities deserve. While these actions require policymakers to make certain up-front investments, doing so has the potential to reduce federal and state spending while improving Americans’ lives.

This is especially true for the estimated 12.8 million Americans who are jointly enrolled in Medicare and Medicaid. These individuals, known as dually eligible beneficiaries, often have complex, long-term needs that tend to require more care. To adequately serve these beneficiaries, our chronic care system requires effective coordination between Medicare and Medicaid, and a robust direct care workforce that can deliver integrated services. However, our system is failing on both of these fronts, leaving beneficiaries with fragmented care and poor health outcomes, while also increasing federal and state health care spending.

Make Medicare and Medicaid Work Better for Dually Eligible Beneficiaries

Navigating health care can be a challenge, especially for dually eligible beneficiaries. Because of their complex medical and nonmedical needs, dually eligible beneficiaries often require more services than beneficiaries do in only Medicare or Medicaid, and they face multiple social risk factors, such as food insecurity. When Medicare and Medicaid plans fail to coordinate services for dually eligible beneficiaries, there’s a risk that these individuals won’t receive appropriate care in the most suitable setting. This often leads to care influenced by conflicting state and federal regulations and separate funding sources.

Integrated care models that align the delivery, payment, and administration of services under both Medicare and Medicaid offer a promising avenue for improving health outcomes and equity while simultaneously increasing long-term cost savings. However, as of 2022, only about 21% of full-benefit dually eligible beneficiaries were enrolled in integrated care models.

One integrated care model that stands out is Programs of All-Inclusive Care for the Elderly (PACE). The model offers medical, social, and rehabilitative services to frail older adults who need nursing home-level care, but who wish to remain in their communities. Despite PACE’s proven track record of improving care for dually eligible beneficiaries and producing modest Medicaid cost-savings compared to care provided under a Medicaid waiver or in a nursing home, the uptake of PACE has been slow.

PACE can reduce costly, preventable hospitalizations, emergency department visits, and institutional stays while lessening racial and ethnic disparities. The program also helps meet the growing demand for home and community-based services, particularly crucial in rural areas due to the higher percentage of adults ages 65 and older and a greater prevalence of adults with multiple chronic conditions, as compared to urban areas. Yet, PACE is out of reach for many. BPC released a report that unpacks the various challenges to growing PACE and offers federal policy solutions.

The Direct Care Workforce Shortage Limits Care Access

To increase access to integrated care models like PACE, policymakers must also address urgent health care workforce shortages, including a shortage of direct care workers assisting older adults and people with disabilities. Federal agencies have warned of the urgent need to address the problem, as the aging of the baby boomers will only exacerbate it. Although the number of direct care workers more than doubled from 2.2 million in 2000 to 5.1 million in 2022, the supply of direct care workers will still fall short of the demand over the next decade.

There is increasing bipartisan interest in addressing the direct care workforce shortage. Members of Congress across the aisle have recently held hearings, solicited stakeholder feedback, and introduced bipartisan legislation to resolve this crisis. The Biden administration and Congress have also taken important, but limited, steps to help expand the direct care workforce. However, further comprehensive federal policy reforms are necessary to address the long-standing, deeply-rooted challenges associated with recruiting and retaining direct care workers.

Opportunities for Congressional Action: Advance Integrated Care and Bolster the Direct Care Workforce

Addressing the nation’s chronic care crisis and moving toward a more integrated and value-based model for dually eligible individuals is a bipartisan goal. This commitment is reflected in the introduction of the Delivering Unified Access to Lifesaving Services (DUALS) Act of 2024, aimed at improving integrated care for dually eligible individuals.

Among the bill’s provisions is a requirement that closely aligns with BPC’s recommendations to ensure that all full benefit dully eligible beneficiaries have access to fully integrated care options, such as PACE, and to make PACE more affordable for Medicare-only participants. The bill would increase the affordability of and access to PACE while requiring the Federal Coordinated Health Care Office (MMCO) to publish a range of fully integrated care models for all states to choose from and then make available to dually eligible beneficiaries. The bill has the potential to significantly improve dually eligible beneficiaries’ access to fully integrated care options while contributing to long-term cost-savings, and Congress should capitalize on this opportunity as a starting point for further advancing and refining legislation that will improve access to high-value, integrated care.

But federal policymakers’ work cannot stop here.

Congress should advance additional reforms that further strengthen access to these models by addressing the shortage of health care workers—particularly direct care workers—available to care for these beneficiaries. The nation will need a robust direct care workforce to better manage beneficiaries’ chronic conditions, improve health outcomes, and reap the full benefits and cost-savings from fully integrated care models. BPC published a report in December 2023 with bipartisan policy solutions to bolster the direct care workforce. Policymakers should improve worker retention through reforms that (1) encourage more supportive work environments, such as reforms to promote training, professional development, and appropriate compensation; (2) increase the number of new workers by strengthening domestic workforce development programs and advancing immigration reforms to address unmet demand; and (3) enhance workforce data collection to support evidence-based policymaking.

As policymakers refine strategies to enhance access to integrated care for dually eligible individuals, they should continue engaging with stakeholders and policy experts who can inform this effort. Federal policymakers should also monitor and, if necessary, enact reforms to uphold and strengthen consumer protections and education as this effort advances. For example, BPC recommends policymakers require PACE organizations to make their quality improvement plans and organizational status (i.e. nonprofit or for-profit status) available on the organization’s website. This requirement would empower beneficiaries to make more informed decisions. Similarly, while the Centers for Medicare & Medicaid Services has made important strides in strengthening consumer education and protections related to Medicare Advantage Special Needs Plans, policymakers should continue to assess the need for additional reforms to promote beneficiary choice and education on the value of integrated care.

With a divided Congress, policymakers must pursue bipartisan opportunities to tackle America’s chronic care crisis by supporting integrated care models and bolstering the health care workforce. Failure to address this crisis will not only hamper patients’ access to critical care but will also exacerbate health disparities, increase long-term spending, worsen health outcomes, and hinder our capacity to prepare for future public health emergencies.