View Research by Author - David G. Stevenson

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This Congressional Research Service report analyzes state strategies for containing long-term care costs for older people. To improve finance and delivery systems, states are expanding home and community-based services and are integrating acute and long-term care services through the use of managed care. Secondly, states are seeking to substitute private, Medicaid, and Medicare financing for state funding through tax incentives, private long-term care insurance, and establishing public/private partnership. None of these strategies has contributed much to containing long-term care costs. If faced with an economic downturn, count on states to rely on traditional strategies--such as cutting reimbursement rates and controlling nursing home supply--which run counter to the demographic imperative of the aging baby boom generation.

This Congressional Research Service report analyzes state strategies for containing long-term care costs for older people. To improve finance and delivery systems, states are expanding home and community-based services and are integrating acute and long-term care services through the use of managed care. States are also seeking to substitute private, Medicaid, and Medicare financing for state funding through tax incentives, private long-term care insurance, and establishing public/private partnership. None of these strategies has contributed much to containing long-term care costs. If faced with an economic downturn, count on states to rely on traditional strategies - such as cutting reimbursement rates and controlling nursing home supply - which run counter to the demographic imperative of the aging baby boom generation. Congressional Research Service Report for Congress; May 2000. Available at http://www.urban.org/UploadedPDF/1000056.pdf.

As in many areas of the country, low-income people in Washington, D.C., face a number of challenges in obtaining health services delivered in a timely manner, in an appropriate setting, and with attention to continuity and quality of care. One barrier is financial; nearly 30 percent of nonelderly DC residents below 200 percent of the federal poverty level (FPL) are uninsured. Another barrier is availability; many economically depressed sections of the city are underserved by health care providers. Hospitals and clinics that serve the poor are experiencing some financial strain as competition among hospitals for paying patients continues to increase and Medicaid payments are held in check. The District's Medicaid program has for many years paid facilities relatively generous rates.

The first section of this paper presents background information on the elderly population, the supply of nursing homes and other providers, and Medicaid expenditures. The next section briefly describes the principal agencies involved with long-term care in the District. The next five sections of the paper analyze issues related to policy development and implementation, home- and community-based services, nursing homes, and other topics, including the D.C. Office on Aging and Adult Protective Services in the Department of Human Services. The paper concludes by examining the District of Columbia's challenges for the future in organizing, financing, and assuring quality of care in long-term care for the elderly.

There are two Highlights for each state. The Highlights that focus on health cover Medicaid, other public insurance programs, the health care marketplace, and the role of public providers. The Highlights capture policies in place and planned in 1996 and early 1997.

From 1980 to 1997, federal law directly linked Medicaid nursing home rates with minimum federal and state quality of care standards. As part of the Omnibus Reconciliation Act of 1980, the "Boren amendment" required that Medicaid nursing home rates be "reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities in order to provide care and services in conformity with applicable state and federal laws, regulations, and quality and safety standards" (Section 1902(a)(13) of the Social Security Act). State Medicaid officials overwhelmingly came to oppose the amendment as impossible to operationalize, believing that they were forced by the courts to spend too much on nursing homes at the expense of other services.

Many states have responded to growing Medicaid long-term care expenditures by limiting the number of nursing home, home health, and nonmedical residential facilities through certificate-of-need (CON) programs and moratoria on new construction. This report focuses on the use of CON programs and moratoria as a long-term care cost-control strategy in the 13 states which are the focus of the ANF study. These programs typically focus on nursing home beds. While this strategy may be effective in the short-to-medium term, states must also consider the needs of an aging population.

The state reports describe the safety net and health care programs in place for low-income people on the eve of welfare reform. The reports also analyze the particular circumstances that are shaping the state's response to the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). The state reports are based on case studies in the respective state.

Despite state complaints about the heavy cost burden that long-term care for the elderly places on Medicaid the current method of long-term care financing is quite economical. This report reviews the three major strategies that states are following to control this spending and finds that despite these state efforts, it will be difficult to obtain large savings.

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