For decades, policymakers have sought to improve access to long-term services and supports (LTSS) and to strengthen these services’ financing. Today, about half of 65-year-olds will need LTSS at some point in their life.1 This need will grow as baby boomers age and require more care.
LTSS refer to a broad range of paid and unpaid medical and nonm-edical services for individuals with functional limitations due to age, chronic illness, or disability.2 LTSS include assistance with activities of daily living (ADLs), such as eating, bathing, or dressing, and instrumental activities of daily living (IADLs), such as medication management or meal preparation.3 Those who need LTSS may include children, adults, or seniors with physical, cognitive, developmental, mental, or other chronic health conditions.4 In 2018, 14 million adults in the United States reported a need for long-term services and supports.5
The challenges associated with providing care to those who require LTSS include both the cost of care and the shortage of caregivers relative to need. The cost for facility and in-home care services has on average increased faster than the rate of inflation since 2004.6 Long-term care providers saw significant cost increases from 2019 to 2020 as demand rose and caregiver shortages in facilities and in the community worsened. The median for the national annual cost of LTSS in 2020 ranged from $19,240 for adult day health care to $105,850 for a private room in a nursing home.7
The U.S. Bureau of Labor Statistics projected a 34% increase, or 1.16 million new home health and personal care aide jobs, over the 10-year period beginning in 2019 – a faster growth rate than the average for all other occupations. 8 According to the most recent data from the bureau, these caregivers earn a median of $13.02 per hour. Experts predict the low pay will result in significant workforce shortages and worsen access to care for individuals needing LTSS.9 For comparison, social and human service assistants– a similar occupation with similar education requirements – earn a median pay of $17.29 per hour.10 In addition to low wages, other factors contributing to direct care workforce shortages include challenges in workforce recruitment and retention, high turnover rates, lack of access to benefits, and lack of economic security.11 The COVID-19 pandemic exacerbated these trends after nursing homes experienced high infection and mortality rates, and the demand for home and community-based care increased.
No single solution will address the needs of those who require LTSS. Improving access to these services will require a combination of public- and private-sector options, and an investment of federal resources. Since 2014, BPC has worked to develop bipartisan solutions to expanding access to LTSS. Our work began with a group of four leaders: Former Senate Majority Leaders Tom Daschle and Bill Frist; former Secretary of Health and Human Services and Gov. Tommy Thompson; and Alice Rivlin, former vice chair of the Federal Reserve, director of the Office of Management and Budget, and director of the Congressional Budget Office.
BPC’s work has focused on solutions designed to improve the availability of home and community-based services, to improve a struggling private long-term care insurance market, and to provide assistance to caregivers. This report outlines policy recommendations, including new proposals to expand the availability of home and community-based services for low- and middle-income individuals. It also includes previous recommendations that BPC has developed to improve private-sector options for those with more financial resources.
Expand Access to Home and Community-Based Services
- Congress should make home and community-based services (HCBS) available for individuals with long-term care (LTC) needs who are ineligible for Medicaid. Services would be available through fully integrated care models, including improved fully integrated dual eligible special needs plans (FIDE-SNPs), Programs of All-Inclusive Care for the Elderly (PACE), or other models approved by the secretary of HHS, and would include sliding-scale subsidies.
- Congress should develop a transitional program to support the expansion and development of integrated delivery models where they are unavailable, and should build caregiver capacity until the new HCBS program is fully implemented.
Address Disparities in the Delivery of HCBS
- Congress should direct the secretary of HHS to collect data and issue an annual report on disparities in access to HCBS and make recommendations to Congress to address inequities.
Create a Caregiver Tax Credit
- Congress should establish a refundable tax credit for caregivers to help with out-of-pocket costs for paid LTSS-related care.
Improve the Viability of Private Long-Term Care Insurance
- Congress should standardize and simplify private long-term care insurance to achieve an appropriate balance between coverage and affordability, through “retirement long-term care insurance (LTCI).”
- Incentivize employers to offer retirement LTCI and to auto-enroll certain employees (age 45 and older with minimum retirement savings), with an opt-out like many employer-sponsored retirement savings accounts.
- Congress should permit early penalty-free withdrawal from retirement savings accounts to pay retirement LTCI premiums.
- Congress should ask NAIC to modify model laws and regulations to accommodate products that convert from life insurance to longterm care.
Establish a Public Education Campaign for Long-Term Care
- The Financial Literacy and Education Commission and partnering federal agencies should coordinate to strengthen educational resources on LTC and incorporate LTC planning into retirement education topics.