The State of 21st Century LTSS: Financing and Systems Reform for Americans with Disabilities

Remarks by Martin Gould to the Social Security Advisory Board
January 31, 2006

Introduction

In 2005, the National Council on Disability (NCD) engaged in research regarding the nation’s LTSS “system” because it grew increasingly concerned about the (a) lack of a coherent national long-term services and supports (LTSS) public policy for all people with disabilities; (b) fragmented nature of service and support delivery systems, with uneven access and services provisions; and (c) LTSS costs of 22 percent or more of state budgets, which are fast becoming unsustainable. On December 15, 2005, NCD released The State of 21st Century Long-Term Services and Supports: Financing and Systems Reform for Americans with Disabilities (http://www.ncd.gov/newsroom/publications/2005/longterm_services.doc). The following facts and conclusions are drawn from that report.

What Do We Know About the Status of LTSS in America?

LTSS is not just for seniors. Most LTSS data and definitions are based on people 65 and older. It’s impossible for policy makers and researchers to accurately calculate current and future costs without a clear consensus as to who is to be covered by a LTSS system and how eligibility will be calculated.

A growing senior population will need access to affordable LTSS. Today, twenty percent of people 65 and over will require assistance with at least one ADL and 50% will require assistance by age 85. By 2045, people over age 65 who are in need of assistance with 2 ADLs will grow from 1.8 million to 3.8 million.

The incidence of disability is rising for the younger population and the impact on future
LTSS costs is unclear. Little data has forecast what this will mean for future LTSS costs and services. There is no aggregated data on the overall costs of LTSS using definitions (e.g., National Council on Disability) that includes transportation, nutrition, and housing.

It is unclear what LTSS truly looks like for people under age 65 across disabilities that are working and living in the community. There is little research on the disparities in LTSS needs and costs among diverse populations. The issues of poverty, lack of insurance and continued segregation from an affordable and consistent health care system will increase the future needs and costs for LTSS for diverse populations in the U.S. who are projected to make up 50 percent of the American population by 2050.

The growth in Medicaid spending is unsustainable. The ability of states to respond to current and future LTSS needs is beyond their capacity and resources if health care costs continue to rise at double-digit rates. Private long term care insurance is not designed for people under 65 years of age. Private long term care insurance targets individuals age 65 and older within specific disease categories. Over six million Americans own private long term care insurance and 50 percent of the claims paid are for Alzheimer’s and other forms of dementia.

In understanding future LTSS costs, the role of care giving and workforce issues is unclear.
Nearly 44 million American caregivers age 18 and over provide unpaid care to an adult age 18 or older. Six out of ten of these caregivers are employed while providing care, most are women age 50 or older. Paid direct care workers are in short supply. The turnover rate in nursing facilities is nearly 100%, while home care agencies have annual turnover rates between 40% and 60%.
This nation faces major challenges to its LTSS workforce. LTSS workers who provide paid care are often without health insurance and other employee benefits and frequent turnover of staff occurs due to low wages and lack of benefits.

There is no coordinated, comprehensive response to LTSS needs despite the diversity of challenges associated with varying types of disabilities. The current system of response to individual LTSS needs is dependent on state specific differences in coverage, resource allocation and targeted populations. In addition, Medicaid LTSS provided to a person in one state does not transfer to another state if that person moves. Additionally, current costs are not a customized response to individual needs.

There is little political or public understanding of LTSS needs. Fifty-nine percent of Americans have given little or no thought at all to the issue of LTSS. Most Americans think of LTSS as long-term care for seniors with severe chronic disabilities who reside in nursing homes. This perception is a holdover from the 1960s when Medicaid and Medicare were first established and reflects a system of care that is outdated and no longer cost effective. Few Americans ever think of LTSS for individuals under the age of 65 with significant disabilities who are living and working in the community. Many people do not realize that there is no LTSS public policy for individuals of moderate to middle income whether over or under the age of 65. Despite the movement today to provide services and supports in the home and community, almost 70 percent of Medicaid resources for LTSS still supports individuals in nursing facilities or state institutions.

There is fragmentation of the Federal system of LTSS. Depending on where you live, your age, your economic status, and the nature of your disability, you will face different options and levels of response to LTSS needs. Furthermore, there is no single federal program, federal agency, or congressional committee is charged with the responsibility for the management, funding, and oversight of LTSS; however, 23 federal agencies are actively involved in LTSS using a broad based definition.

Policy makers are not asking the hard questions. Most exercises in forecasting future visions for long-term service and support policy do not address the hard questions: What services should be guaranteed to individuals who are unable to provide for themselves? What protections from catastrophic loss should be afforded? And, most importantly, who will pay?

Consumers are not providing real solutions. Perhaps most alarmingly of all the findings, Americans with disabilities are not leading the LTSS policy discussion(s).

Finally, no proposals have provided a total picture of what LTSS costs for people with lifelong disabilities would look like, and no studies exist that provide viable funding alternatives for a new system.

Conclusion

It is imperative that our nation transform its LTSS programs, financing, and policies to promote and protect individual dignity and independence within the context of supportive families and communities and to circumvent the impending storm created by our growing demographic and economic challenges. If we are to achieve real change in our current system of LTSS, we will need to base the transformation on a: (a) broad definition; (b) fundamental set of operating assumptions that serve as the basis for real change to occur; and (c) series of action steps.

A broad definition of long-term service and supports will reflect people’s essential needs for maintaining a quality of life with maximum dignity and independence. Housing, transportation, nutrition, technology, personal assistance, and other social supports should be included in a definition of long-term services and supports.

Furthermore, there are five operating assumptions that need to be addressed by policymakers who undertake any major effort intending to achieve meaningful change in LTSS. First, people who are elderly and people with disabilities both desire and deserve choices when seeking assistance with daily living in order to maintain their self-determination, dignity and independence. Second, without significant reform, the current financing mechanisms, both public and private, will become unsustainable in the near future. LTSS must be affordable to all Americans regardless of income level and we must consider opportunities to leverage public and private support in new ways without impoverishing beneficiaries. Third, there is an opportunity with the changing demographic picture of the United States to explore the possibilities of a universal approach to the design and financing of supports that is responsive to individuals with disabilities both under and over the age of 65 without sacrificing individual choice and flexibility. Fourth, formal and informal care giving must be sustained; and family needs and workforce recruitment and retention challenges must be addressed. Fifth, the approach to quality must examine consumer direction and control of resources in addition to traditional external quality assurance mechanisms.

Finally, we need to engage in a series of action steps and activities to make the transformation happen. These action steps include: Increase policymaker knowledge and understanding of public and private costs and benefits of LTSS for people with disabilities under age 65 and their families; design and implement an action plan to monitor and oversee states’ activities to meet their ADA obligations as a result of the Olmstead Supreme Court decision; decouple eligibility for home and community-based waiver services from determination of nursing home eligibility; increase support for family members and others in their role as informal and unpaid caregivers for individuals with disabilities of all ages; improve the supply, retention, and performance of direct support workers to meet increasing demand; hold states accountable for rebalancing their system to increase home and community-based LTSS; explore possible relationships between private LTSS insurance products and publicly financed LTSS; and, improve consumer understanding, knowledge, and skills to develop a person-centered plan and self-direct an individual LTSS budget.

As the number of Americans requiring LTSS increases, the existing fragmented “system” will become increasingly incapable of being sustained. Without a dramatic change of direction, disaster is inevitable.