Health Bill Provision On Long-Term Care Will Affect Baby Boomers

One of the lesser-known provisions in the new health law may have one of the biggest and longest-lived impacts.

As baby boomers edge into their 60s, many wonder how they will get care, if they’re unable to care for themselves.

Jim Firman says the answer lies in the Community Living Assistance Service and Supports (CLASS) Act – a section of the new health law that would establish a federal insurance program for long-term care. Firman has been president and CEO of the National Council on Aging since 1995. He says that the CLASS Act was “literally one of Ted Kennedy’s dying wishes,” and that now “is the right time” to establish the benefit championed by the late Massachusetts senator.

He spoke with KHN’s Peggy Girshman recently at the annual Aging in America meeting. Here are edited excerpts of that interview.

Q. How do you characterize what’s going to happen in the next 10 to 20 years with long-term care in this country?

A: Right now, millions of older adults who have worked hard all their lives are forced to spend down their life savings and go into an expensive nursing home, just because they can’t afford care at home. The health reform plan makes it easier for individuals on Medicaid to get care in their own homes. It also means that spouses of people receiving home care on Medicaid will no longer have to be forced down into poverty before they get help.

Equally important and even less known is the fact that this new health care plan creates a major national insurance program to help people pay for long-term care at home. People who are working will voluntarily opt to pay in, it will be a payroll deduction if they choose to do this, and after paying in for five years, they will be eligible to earn an average of $75 per day in cash on a monthly benefit basis to help them pay for home and community based care.

Q: Seventy-five dollars a day doesn’t pay for that much now, let alone 20 years from now. How do you answer critics that say this a drop in the bucket in providing long term care insurance for people?

A: I think they’re wrong. Think about it from the business point of view. In my neighborhood – I live in Arlington, Va. – within six blocks of me, I know two elderly people who are frail and need help, and I know two people who are in their late 50s and have had strokes and are both paralyzed. If they were able to pool their money, which would come to about $112,000 a year between them, I could put together an incredible package of services and care and support to keep those people in their homes.

It’s not enough to keep people in nursing homes, where you’re paying for room and board and a whole bunch of things other than care and depreciation and in for-profit homes you’re also paying for profit. But, don’t underestimate the power of $75 a day. That could help most people, particularly if it’s complementing efforts made by family members and other kinds of things.

Q: How would you describe what the need is going to be in the next 10, 20, 30 years for long term care — whether it’s community-based or nursing-home based?

A: It’s anybody’s guess what the need for long-term care is going to be. If nothing else changes, given the rates we have of people with disabilities and the number of diseases that occurred, we’re probably looking at tripling the number of people who will need long-term care, because a lot of them will [be living longer] and become more frail.

The big wild card in this is Alzheimer’s and dementia. If we are able to in the next five or 10 years to develop a vaccine or a cure, it could dramatically change the cost of long-term care in this country. You can look at rosy scenarios and say, the percentage of older people in long-term care will decrease because we’ll come up with cures or prevention for Alzheimer’s, or you can say we don’t, in which case more people will live longer and get Alzheimer’s.

Q: It seems like in some cities, counties, suburbs, that there are overlapping services for seniors. What is the best practice for trying to navigate that?

A. The best practice is always to take a person-centered approach. To look at people holistically, and say what are all their needs, not just health needs or not even just their needs for … long-term care services, but what are their economic financial needs, and then to do case work, however that’s done, where you bring together all the resources in a community to help a person. At the end of the day, it’s somebody looking at that person and saying, “I’m going to help you get everything that’s out there.”

Q. Who decides who that somebody is, and who pays that somebody, or coordinates that somebody?

A. Well, right now nobody pays for it unless you’re impoverished and on Medicaid, and then they have somebody call the case manager who tries to do that. But the answer [for most people} is that no one [entity] decides, and that’s okay. We have to empower people. Just because people are disabled doesn’t mean they’re not smart and they don’t know what to do. Even if they have dementia, they have family members.

I think this is an empowerment issue. It’s about giving people the information, helping them understand their rights, making it easy through the Internet and new technology for people to talk about this. [Once people start receiving benefits from the CLASS Act], a whole bunch of people will now have $27,500 a year to pay for what they want and need, there will be an instant uprising of innovation and creativity in the private sector. Both for-profit and non-profit will be all over it. They’ll be in there offering people comprehensive solutions to do exactly what they need. I think this problem will solve itself through American ingenuity and innovation.