Every year, millions of older adults and people with disabilities have their health care needs met in their homes and communities in a cost-effective and inclusive manner. Yet hundreds of thousands of people are on waiting lists for home and community-based services (HCBS) right now, and many more are without access to comprehensive home care options due to restrictive state Medicaid programs and increasing provider shortages
The sad reality is that nearly 140,000 nursing home patients and staff lost their lives during the pandemic and over 1.3 million nursing home patients and staff contracted COVID-19. For decades, our nation has failed to make a meaningful investment in creating affordable and accessible home and community-based care. Many older adults and individuals with disabilities are placed in high-risk settings such as nursing homes—not because they need skilled medical care, but because it is difficult to find and afford home health aides, adult day programs, and other paid care that allows them to age in place. To keep this vulnerable population safe, policy makers must get serious about caring for more older adults and those with disabilities in their homes and communities.
Between the COVID-19 pandemic, a rapidly growing older population (one in five U.S. adults will be 65 years-old or older by 2030), and critical provider shortages, reforming how we deliver and finance long-term care has never been more urgent. To address these issues, the Bipartisan Policy Center recently released a report outlining policies to make long-term care more affordable for middle- and low-income individuals. The recommendations include enabling Medicare beneficiaries to purchase HCBS, creating a tax credit to assist family caregivers, and investing in the direct care workforce and infrastructure.
Long-term services and supports (LTSS)—think of them as the vehicle for long-term care—include a range of health, health-related, and social services for people who have functional limitations due to old age, chronic illness, cognitive impairment, disability, or other limitations that restrict their ability to care for themselves. LTSS can be provided where an individual already lives, like HCBS, or in institutions (like nursing homes). Services range from helping individuals eat and get dressed to managing medications and money.
The need for LTSS in the U.S. is significant and growing: about 10,000 Americans turn 65 years-old each day, and over half of them (56%) will have LTSS needs at some point in their life.
There has been a sizeable shift over the past 30 years toward delivering more LTSS in home and community-based settings rather than institutional settings. Aging in place is extremely desirable, allows older individuals and those with disabilities to lead independent lives, and has demonstrated savings compared to institutional care—for older individuals, people with disabilities, and states. Today, the national median annual price of a home health aide ($54,912) is half that of nursing home care ($105,850), and adult day care is one-fifth the cost ($19,240).
One of the primary challenges people face is accessing paid HCBS. Despite being created for Americans age 65 and older, Medicare does not cover extensive LTSS. And while Medicaid is the largest payer of LTSS and HCBS, it is a means tested program. Even individuals without significant savings or long-term care insurance often don’t qualify, and must pay out of pocket for care until they eventually spend down their savings and do qualify for Medicaid. Medicaid has strict financial and eligibility criteria (such as having less than $2,000 in assets) that people must meet in order to receive HCBS.
Individuals who do spend down to qualify for Medicaid are not even guaranteed access to comprehensive HCBS. States must pay for long-term care in institutions such as nursing homes, but most HCBS remain optional (referred to as institutional bias). Aside from a limited number of required services, states can offer as many—or as few—HCBS as they see fit, and limit coverage to certain populations and even geographic regions. For example, someone receiving personal care services in one state could move to another state, or even another part of the same state, and lose access to critical services they have relied on for years. Consistently facing severe budget shortfalls, most states (41) also use waiting lists to contain costs by capping how many residents use HCBS. Over 800,000 individuals were on waiting lists nationwide in 2018, delaying them more than three years on average before receiving home based care.
Difficulty navigating and accessing Medicaid HCBS is a large reason why older adults and people with disabilities overwhelmingly rely on unpaid care from family and friends. Last year, more than one in five Americans (about 53 million people) provided HCBS to a loved one, with 53% of caregivers surveyed stating they felt that they had no other choice due to the lack of affordable and available LTSS options. On average, family caregivers spend more than $7,000 per year looking after their loved ones, and about half have to limit expenditures, dip into personal savings, or cut back on retirement contributions. COVID-19 has no doubt intensified the strain on caregivers, considering that millions still report being unemployed, food insecure, or behind on rent payments amidst the pandemic.
COVID-19 has also worsened the shortage of paid HCBS providers. Twenty-five states so far have reported the permanent closure of at least one HCBS provider. Even before the pandemic, high turnover rates plagued the direct care workforce. In 2018, the median caregiver turnover rate at private home-care agencies nationwide reached 82%. HCBS providers are paid some of the lowest wages in the health care industry. Mean pay for home health and personal care aides last year was just $13.02 per hour nationwide. Yet given our aging population, over 1 million new home health and personal care aides will be needed by 2030.
2021 is the year policymakers must address these escalating barriers to affordable long-term care and expand access to HCBS. While the budget reconciliation package being debated on Capitol Hill includes funding to expand HCBS, it is not guaranteed to pass in the House or Senate. Here’s how Congress and the White House can work together on these issues:
To help more individuals access HCBS, BPC recommends Congress allow Medicare beneficiaries who are not eligible for Medicaid to buy into a fully integrated model for some HCBS. Individuals with low- to moderate-incomes could receive an income-based subsidy to purchase services through an improved fully integrated dual eligible special needs plans (FIDE-SNP), PACE, or other approved integrated models.
Individuals enrolled in fully-integrated models with monthly incomes at or below $2,382 (300% of SSI, which is 221% of the federal poverty level) would receive long-term care at no cost to them. Partial subsidies would exist for Medicare beneficiaries with incomes of up to $4,293 per month (400% of the federal poverty level), while those above the new income floor would be able to purchase HCBS by paying a fee covering the cost of the services. Expanding eligibility for Medicaid HCBS could provide care to almost 700,000 adults annually.
To support unpaid caregivers, BPC recommends Congress establish a refundable tax credit to help them with up to $3,000 of out-of-pocket LTSS costs annually. While a few states have enacted benefits or tax credits to help family caregivers, they are the exception to the rule. A federal tax credit—though no replacement for more comprehensive measures to support caregivers—would help provide some much-needed financial relief to family caregivers, and help more older adults and individuals with disabilities age in place.
Finally, to strengthen the direct care workforce, Congress should award funds to states dedicated to developing the workforce through raising wages and developing recruitment and retention programs. BPC also recommends establishing milestones for HCBS capacity building that states must meet to earn incentive payments, such as removing individuals from waiting lists, decreasing caregiver turnover, or increasing the number of HCBS providers.
The Biden administration and Congress have taken important steps to improve access to HCBS during the pandemic through the American Rescue Plan relief package, but the past year and a half has proven that it is long past time to seriously invest in expanding HCBS. COVID-19 has exposed enduring problems with institutional care, and has simultaneously strained state budgets, unpaid caregivers, and direct care workers that already struggled to deliver HCBS.
Implementing BPC’s recommendations at the federal level would help support millions of family caregivers; grow the direct care workforce; incentivize states to commit to substantial HCBS capacity building; and provide home and community-based care to over half a million individuals annually. There is no easy solution to expand HCBS, but this year we can—and must—do better.