BIDEN TAKES ON PLAN TO BOLSTER LONG-TERM CARE
$400 billion is aimed at fixing a sagging safety net
Joe Biden’s $400 billion proposal to improve long-term care for older adults and those with disabilities was received as either a long overdue expansion of the social safety net or an example of misguided government overreach.
Republicans ridiculed including elder care in a program dedicated to infrastructure. Others derided it as a gift to the Service Employees International Union, which wants to organize care workers. It was also faulted for omitting child care.
For Ai-jen Poo, co-director of Caring Across Generations, a coalition of advocacy groups working to strengthen the long-term care system, it was an answer to years of hard work.
“Even though I have been fighting for this for years,” she said, “if you would have told me 10 years ago that the president of the United
States would make a speech committing $400 billion to increase access to these services and strengthen this workforce, I wouldn’t have believed it would happen.”
What the debate over the president’s proposal has missed is that despite the big number, its ambitions remain singularly narrow when compared with the vast and growing demands imposed by an aging population.
Biden’s proposal, part of his $2 trillion American Jobs Plan, is aimed only at bolstering Medicaid, which pays for somewhat over half the bill for long-term care in the country. And it is targeted only at home care and at community-based care in places like adult day care centers — not at nursing homes, which take just over 40 percent of Medicaid’s care budget.
Still, the money would be consumed very fast.
Consider a key goal: increasing the wages of care workers. In 2019, the typical wage of the 3.5 million home health aides and personal care aides was $12.15 an hour. They make less than janitors and telemarketers, less than workers in food processing plants or on farms. Many — typically women of color, often immigrants — live in poverty.
The aides are employed by care agencies, which bill Medicaid for their hours at work in beneficiaries’ homes. The agencies consistently report labor shortages, which is perhaps unsurprising given the low pay.
Raising wages may be essential to meet the booming demand. The Labor Department estimates that these occupations will require 1.6 million additional workers over 10 years.
It won’t be cheap, though. Bringing aides’ hourly pay to $20 — still short of the country’s median wage — would more than consume the eight-year outlay of $400 billion. That would leave little money for other priorities, like addressing the demand for care — 820,000 people were on states’ waiting lists in 2018, with an average wait of more than three years — or providing more comprehensive services.
Elder care has long been at the center of political battles over social insurance. President Lyndon B. Johnson considered providing the benefit as part of the creation of Medicare in the 1960s, said Howard Gleckman, an expert on long-term care at the Urban Institute. But the chairman of the House Ways and Means Committee, Wilbur Mills, warned how expensive that approach would become when baby boomers started retiring. Better, he argued, to make it part of Medicaid and let the states bear a large chunk of the burden.
This compromise proPresident
duced a patchwork of services that has left millions of seniors and their families in the lurch while still consuming roughly a third of Medicaid spending — about $197 billion in 2018, according to the Kaiser Family Foundation. By Kaiser’s calculations, Medicaid pays for roughly half of long-term care services; out-of-pocket payments and private insurance together pay a little over a quarter of the tab. (Other sources, like programs for veterans, cover the rest.)
Unlike institutional care, which state Medicaid programs are required to cover, home and community-based care services are optional. That explains the waiting lists. It also means there is a wide divergence in the quality
of services and the rules governing who gets them.
This arrangement has also left the middle class in the lurch.
The private insurance market is shrinking, unable to cope with the high cost of care toward the end of life: It is too expensive for most Americans, and it is too risky for most insurers.
As a result, middle-class Americans who need longterm care either fall back on relatives — typically daughters, knocking millions of women out of the labor force — or deplete their resources until they qualify for Medicaid.
Given the magnitude of the need, some wonder whether there might be a better approach to shoring up long-term care than giving
more money to Medicaid. The program is perennially challenged for funds, forced to compete with education and other priorities in state budgets. And Republicans have repeatedly tried to curtail its scope.
“It’s hard to imagine Medicaid is the right funding vehicle,” said Robert Espinoza, vice president for policy at PHI, a nonprofit research group tracking the home care sector.
Some experts have suggested, instead, the creation of a new line of social insurance, perhaps funded through payroll taxes as Social Security is, to provide a minimum level of service available to everyone.