Selected SLC Research


Policy Analysis | September 19, 2011

Prospective Changes in Long-Term Care Policies

Jeremy Williams

According to the federal Centers for Medicare and Medicaid Services (CMS), there are approximately 9 million people in the United States who require long-term care, including those in nursing homes and people with disabilities. That number is expected to reach 12 million by 2020.In addition, approximately 40 percent of all people living in the United States who reach the age of 65 will enter a nursing home at some point in their lives, and 10 percent of all those who do so will stay there five years or more, according to CMS.

Funding for these services is of grave concern to states and the federal government, particularly in light of the national financial crisis and the reality that healthcare costs are expected to double by 2020.Generally, Medicare does not pay for long-term care but only for medically necessary services like home healthcare or skilled nursing facilities, which means Medicaid is primarily responsible for covering most long-term care expenditures, including nursing home care for elderly people. Since Medicaid eligibility requirements vary so widely by state, to what extent these services are funded varies as well.

A new report by the National Governors Association, Redesigning State Government 2011, indicates that many states are revamping the way healthcare policy is administered. For instance, the North Carolina Department of Health and Human Services instituted a new policy this year that will limit Medicaid patient prescriptions to mostly generic drugs, a measure that is expected to save the state as much as $30 million annually. Wyoming and New York implemented similar measures this year as well. Maryland recently created a public-private council, the Maryland Health Quality and Cost Council, to coordinate healthcare initiatives among insurers, medical groups, health insurance exchanges, advocacy groups, and other state and local stakeholders and entities. Among other endeavors, the Council will attempt to find new ways to improve chronic illness care, including coordination of medical, rehabilitative and long-term care services, in hopes of improving the lives of people who receive those services and reducing costs.

A new report by AARP's Public Policy Institute, the Commonwealth Fund and the SCAN Foundation, Raising Expectations: A State Scorecard on Long-Term Services and Supports for Older Adults, People with Physical Disabilities, and Family Caregivers, assesses the current status of long-term care, services that help meet the medical and nonmedical needs of people living with chronic illnesses or disabilities that keep them from caring for themselves for long periods of time, in every state in the nation. The report examines four primary dimensions of state long-term care services: affordability and access; choice of setting and provider; quality of life and care; and support for family caregivers.

Two SLC states ranked in the top 15 nationally: Missouri and Virginia. Missouri scored very high in affordability and access and support for family caregivers. Virginia showed the second highest nationally in affordability and access. North Carolina, while not in the top 25 overall, showed particular strengths in affordability and access and choice of setting and provider.

States with the highest levels of performance generally have enacted public policies designed to improve access to services and choices in how those services are delivered. This predominantly is done by ensuring that state Medicaid programs serve the most in need of long-term care, while offering alternatives to nursing homes and extended hospitalization. For instance, Minnesota, which was ranked first in the nation for promoting affordable long-term care services, affectively focuses nursing home and other high-cost care primarily on the frailest elderly people. Second, successful state policies establish a single point of entry into the system, in order to help people find the needed information regarding services, so that they can make the most informed decisions about long-term care. Finally, the most efficacious state policies have high levels of support for family caregivers, programs that often fall by the wayside during tough economic times.

The report indicated a wide variation in performance by category. For instance, the top five ranked states reported Medicaid coverage for low- and moderate-income people with disabilities at 63 percent, while the bottom five covered only 20 percent. Similarly, for the top five states, hospitalization rates of nursing home residents was only about 10 percent; whereas the bottom five experience about 28 percent hospitalization rates. Generally, states like Minnesota offer higher quality of care, better access, more choices of settings and more support for family caregivers than most other states. According to the report, one of the main factors that separates these states from others is the level of interaction between government policies and the performance of care providers.

Poverty and disability rates, as well as average incomes, can have a dramatic effect on these outcomes as well, but even poorer states can implement practices that can lead to greater flexibility and access to appropriate long-term care. The report estimates that if states implement policies similar to those in Minnesota and other higher ranking states, nationally, states could save approximately $1.3 billion a year and avoid unnecessary hospital stays for more than 120,000 people. In addition, approximately 667,000 more individuals with disabilities would be covered by Medicaid, and there would be more than 200,000 fewer unnecessary nursing home admissions, redirecting those individuals to less costly, yet suitable, in-home care or other programs. For SLC states, this would mean as many as 331,079 more individuals would be covered by Medicaid; 66,283 more new Medicaid recipients would be directed to in-home and community-based services, rather than nursing homes; 58,830 more existing nursing home residents would be transferred to in-home and community-based services; and there would be 53,996 avoidable hospitalizations of people living in nursing homes.

Estimated Impact of Improvements*

 

More adults with disabilities covered by Medicaid

More new Medicaid recipients using in-home and community-based services, instead of nursing homes

More existing nursing home residents shifting to in-home and community-based services

Avoided hospitalizations of people in nursing homes

Alabama

19,564

3,920

3,241

2,481

Arkansas

11,479

1,808

2,840

2,505

Florida

63,625

11,943

5,068

8,047

Georgia

24,160

6,214

4,052

3,112

Kentucky

14,682

data unavailable

1,436

2,722

Louisiana

10,508

4,782

5,599

4,193

Missouri

15,453

5,065

7,118

3,647

Mississippi

7,816

4,043

2,639

2,830

North Carolina

26,835

4,064

2,633

2,903

Oklahoma

14,485

2,466

4,366

2,329

South Carolina

14,267

2,429

874

1,424

Tennessee

23,105

6,385

2,895

3,779

Texas

62,396

11,519

12,908

10,411

Virginia

14,833

data unavailable

2,098

2,658

West Virginia

7,871

1,645

1,063

955

SLC

331,079

66,283

58,830

53,996

*State improves to the level of best-performing state.
Source: AARP, Raising Expectations: A State Scorecard on Long-Term Services and Supports for Older Adults, People with Physical Disabilities, and Family Caregivers, 2011.