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Thursday, May 31, 2012

Medicaid and long-term care: A safety net for everyone.

Cate Hulme

Staff Writer

On April 13, 2012, the Congressional Research Service (CRS) published a report on the private market for long-term care insurance. The purpose of the report was to explore the reasons why people don't purchase long-term care insurance, but it also served as a reminder of how important Medicaid is for people who need long-term care.

The CRS report found that few people buy long-term care insurance. The main reasons people cited for not buying policies were that they cost too much, and it was too confusing to pick between the different options. Most people have to buy these policies on their own, so there isn't an employer negotiating for lower prices or vetting policy choices. Because few people are buying policies, many companies are pulling out of the market. Lack of competition is keeping prices high, making it even harder for people to afford policies.

In other words, the private long-term care insurance market is not working. That's a problem. Medicare doesn't cover most long-term care costs. So, for people who end up needing long-term care—70 percent of people over 65 will likely need long-term care at some point—most will have no insurance coverage to help with the costs of care. With a semi-private room in a nursing home costing, on average, $80,000 a year, many people needing long-term care will find that they have quickly run through their savings and have little money left.

That's where Medicaid comes in. Medicaid does pay for long-term care. In fact, Medicaid pays more than half of all long-term care costs in the United States. Medicaid can make it possible for people who need long-term care to continue living at home while they get the care they need or to get good nursing home care. For children, seniors, and younger adults with disabilities, Medicaid's safety net may be the only way they can get the long-term services they need.

Medicaid doesn't just help the people who need long-term services. It helps their families, too. For example, Medicaid gives the parents of a child with disabilities the help they need so that their child can live at home rather than in an institution. Medicaid means that grown children don't have to quit their jobs to take care of their mother's long-term care. Instead, they can keep working and save money for their own children's education.

Millions of people who need long-term care rely on Medicaid and it's hard to imagine what they, and their family members, would do if Medicaid wasn't there to help them. Yet if Republicans in Congress had their way, we might find out. In March, the Republicans in the House of Representatives passed a budget that would decimate the Medicaid program starting in 2014. On May 10, House Republicans passed a bill that takes a swipe at Medicaid in order to avoid defense cuts and to preserve tax breaks for the rich.

As Republicans continue to call for cutting Medicaid as a solution to reducing the deficit, stop for a second to think about the personal costs of cutting Medicaid—the costs to parents who have a child with disabilities who needs home care, to adults and seniors with disabilities who can't afford the long-term services they need, and to families struggling to get by who can't afford to pay for their parents' long-term care. It is hard to imagine what they would do without Medicaid's safety net. Hopefully we won't have to find out.