Urban Wire A Closer Look at Single-Payer Proposals to Cover Long-Term Services and Supports
Melissa M. Favreault
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Women helps her mother who has Alzheimer's disease

To date, more than 100,000 people living or working in nursing homes have died because of COVID-19, illustrating how urgently the US needs to address deficiencies in how it finances and delivers long-term services and supports (LTSS). Recent single-payer health care reform proposals include broad LTSS coverage, marking a fundamental shift in the health policy discussion. Extending health insurance to encompass help with routine activities of daily living (ADLs) would be a first. Single-payer proposals do not just seek to fill some gaps—they propose to eliminate gaps entirely.

Some single-payer proposals would offer comprehensive LTSS benefits (PDF) to all enrollees regardless of age and history paying long-term care insurance premiums. Current systems—Medicaid (PDF) and private long-term care insurance (PDF)—often limit benefits to people with severe disabilities: those who cannot perform at least two ADLs or who are severely cognitively impaired. Some single-payer programs (PDF), emphasizing the importance of promoting each person’s capacity for social and economic participation, would offer supports to people with one ADL limitation or equivalent need for assistance to function.

Single-payer programs would greatly expand access to LTSS and provide progressive benefits, but they would add markedly to costs.

The Congressional Budget Office (CBO) just released a report describing how it estimates costs for single-payer plans, including new information about costs for LTSS. Estimating the potential costs and benefits of unprecedented LTSS programs poses many challenges. Like the CBO’s working paper (PDF), our Urban Institute report illustrates some of these challenges.

Single-payer LTSS programs are likely to significantly expand the availability and use of paid care

Under current financing policies, many people with severe disabilities have limited access to paid care. Medicare generally does not pay for LTSS. Only those with low incomes and few assets (PDF) qualify for Medicaid, the main public LTSS payer. And few older adults purchase long-term care insurance (PDF).

This leaves many families emotionally and financially strapped. Many pay for care out of pocket (PDF). But fundamentally, the current LTSS system relies overwhelmingly on unpaid family care. Nearly two-thirds of all older adults in the community who receive help with disabilities receive only unpaid help. Others combine paid and unpaid care. Other recent studies (PDF) show similarly high levels of unpaid care only for people not in nursing homes. Despite these enormous family contributions, some people with severe disabilities, especially those with lower incomes, go without go without needed care care (PDF).

Estimated share of people ages 65 and older receiving care in 2015

Because of these extensive family contributions, single-payer plans could greatly expand use of paid care. This could eliminate unmet need and enable families to more easily balance paid employment and care responsibilities. But it could also markedly increase federal costs by hundreds of billions of dollars annually, according to our estimates and the CBO’s.

The effects of single-payer LTSS would be progressive

Because people with disabilities tend to have lower incomes and fewer assets than people without disabilities, even decades before becoming disabled (PDF), significant shares of benefits from a single-payer LTSS program would flow to especially vulnerable families. However, among people who survive to older ages, the likelihood of needing at least some long-term care is substantial. Most people surviving to retirement age eventually become disabled (PDF), so families at all income levels would benefit from expanded LTSS. Because middle- and upper-income families pay more out of pocket for LTSS than other families (PDF), they could receive significant relief from these costs, which some government statistics do not capture well (PDF).

State budgets could benefit from a single-payer LTSS program, which would reduce substantial inequities across states

States currently pay about 47 percent of Medicaid’s total LTSS cost, estimated at $167 billion in 2016 (PDF). Some single-payer programs would require states to maintain current effort, for example for Medicaid care in institutions. Other programs would fully transfer state Medicaid LTSS obligations of about $100 billion annually to the federal government. As the effects of population aging hit all states (PDF), some more acutely than others, state lawmakers would welcome the relief.

Implementing a nationwide right to LTSS could eliminate both the large differences in eligibility and generosity across states and waiting lists for Medicaid home- and community-based services. This would reduce profound, long-standing inequities (PDF).

Policy choices defining eligibility levels, the benefit package, and payment rates will affect the number of beneficiaries a single-payer program serves and its costs

Many public and private LTSS programs impose daily, yearly, or lifetime limits (PDF). Some states and countries scale benefit levels to severity of LTSS needs. Because many LTSS providers are paid so little, many single-payer proposals would increase provider rates so beneficiaries could access care.

Because eliminating care gaps would come with a large price tag for the federal government, some policymakers propose incremental LTSS financing proposals that would reduce but not eliminate coverage gaps. For example, Washington State’s Long-term Care Trust program will provide more limited social insurance benefits targeted to those qualifying workers who develop severe disabilities. Representative Frank Pallone (D-NJ) and my colleagues Marc Cohen and Judy Feder (PDF) suggest covering disability after a waiting period. And loosening Medicaid asset criteria or increasing inadequate maintenance needs allowances could help some especially vulnerable families. Increasing the federal Medicaid match could incentivize state investments in LTSS. Other research has outlined challenges (PDF) and weighed some of the trade-offs of various policy alternatives (PDF).

Single-payer programs would provide high rewards at a high cost. The CBO’s report and our analyses of single-payer LTSS proposals encourage greater specificity in future single-payer plans and provide evidence on the trade-offs between these LTSS financing approaches.

Research Areas Health and health care
Tags Health insurance Federal health care reform
Policy Centers Income and Benefits Policy Center