Long-term Care Financing Reform Must Be Included in Health Care by John Korzendorfer

Jul 28th, 2009 4:26pm

If someone older than 65 suffers a stroke, Medicare provides a battery of procedures to try to save that person’s life. Yet it ignores less-expensive, longer-duration, post-hospital services, such as home services or assisted living that can empower that person and keep him or her out of more expensive and restrictive institutional care. Unfortunately, most Minnesotans have no plan or safety net for the costs of care in the case of physical disability.

Nearly 70 percent of those who turned 65 in 2005 will need some long-term care or supportive services. The average time: three years. Contracting with a home aide just three days per week for two to three hours at a time to provide basics such as meal preparation and assistance with dressing can easily cost $1,000 monthly. Nursing home care can easily be $50,000 or more annually.

Most people aren’t prepared for such realities. And, unfortunately, we have a system where people impoverish themselves to access Medicaid — a government program that doesn’t meet care costs and has become a de facto long-term care provider, largely in expensive institu-tional settings.

What occurs is cost shifting and avoidance of the main issue: finance reform for longevity and chronic care. Health-care reform has to include long-term-care financing reform.

Government can embrace the status quo and continue to make cuts in Medicaid. But that’s a shortcut to a dead end. Cutting Medicaid without a backup plan for supportive services simply propels more expensive, arduous trips to and from the emergency room.

Another policy idea that was floated last legislative session in Minnesota would require seniors to undergo precertification before choosing assisted living. The premise: State certification will “save” you money for when you “need” a nursing home. Precertification is ageism and misses that supportive services empower people, while keeping them out of much more expensive government institutions.

Our overriding goals should be empowering people to live in the most independent setting possible; transforming nursing homes into right-sized, very specialized chronic care centers, much like we’ve done with Lakeshore in Duluth; taking a personal share in costs of

chronic care and supportive services; and ensuring a strong safety net for people who wouldn’t otherwise be able to pay for such care and services.

The CLASS Act (Community Assistance Living Services and Supports) introduced by the Senate Committee on Health, Education, Labor and Pensions is a historic opportunity to balance public and private responsibility. In the opt-out insurance plan, people would pay a premium of about $65 per month in return for a minimum daily benefit of $50 they can self-direct. While not covering everything, it would make private wraparound insurance policies appealing because consumers would easily understand what their money buys and they’d know such a product could guarantee quality of life and fiscal security.

The Congressional Budget Office’s evaluation of the CLASS Act shows no government cost over the next decade, a positive savings of

$2.5 billion in Medicaid in the first 10 years alone, and long-term sustainability. By pre-funding long-term services and supports, we would improve people’s financial options and life quality and we’d secure a safety net for those who will never leave poverty. Finally, without a national solution, the problem squarely falls on each state to solve.

JOHN KORZENDORFER of Hermantown is director of campus operations at Ecumen, which operates the Lakeshore, Bayshore and Chris Jensen senior communities in Duluth, Sunrise on Superior in Two Harbors and 17 other Ecumen senior communities in Minnesota.