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Long-Term Care Needs Reform, Not More Money

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House Speaker Nancy Pelosi (D., Calif.) holds her weekly news conference on Capitol Hill in Washington, D.C., June 17, 2021. (Leah Millis/Reuters) Congressional Democrats want to throw more money at Medicaid, but that won’t improve long-term care.

The reconciliation bill being prepared by congressional Democrats is so substantial that specific provisions as large as $400 billion in proposed extra funds for Medicaid’s long-term-care benefit have attracted little attention.

America faces widespread unmet long-term-care needs, largely concentrated among individuals who are already eligible for Medicaid. Improving the quality of benefits provided under the program is therefore a good use of federal funds.

However, the shortcomings of Medicaid’s long-term-care benefit owe much to the program’s resources being improperly targeted. Instead of being a safety net of last resort, the program has loose and inconsistent eligibility requirements, disincentivizing the purchase of private long-term-care insurance — which ought to bear the bulk of long-term-care costs. Policymakers should use the provision of additional funds to facilitate reforms that fix these deeper structural problems.

Long-term care refers to assistance with basic daily living tasks (such as bathing, dressing, cooking, and personal mobility) that healthy adults are typically able to perform for themselves, as opposed to medical treatment. Long-term-care needs exist on a spectrum of intensity from informal assistance with, say, groceries to 24-hour nursing care.

As Americans live longer into old age and disability, the nation’s long-term care needs are expected to increase. Seventy percent of seniors will develop severe long-term-care needs at some point — most often after reaching the age of 80. Close relatives such as spouses or adult children are the primary caregivers, providing an average of 17 hours per week of assistance. Today’s seniors are more likely to be divorced than those of a generation ago, and have fewer kids to look after them, especially as adult children are more likely to be employed full time or to live far away. The need for formal paid long-term care is therefore expected to increase significantly.

Long-term care in the United States is currently dominated by a single payer,

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