1. What are long-term services and supports and where are they provided?
Millions of Americans of all ages need long-term services and supports that result from disabling conditions and chronic illnesses. LTSS include the wide array of medical and non-medical services that are provided over a prolonged period to people of all ages with impaired mobility, impaired cognitive function, physical or mental disabilities, complex medical needs or chronic disease. Caregivers provide services and supports to help individuals with activities of daily living—such as eating, bathing, and dressing—or other activities such as housekeeping or managing medications that help people live independently, while licensed health professionals provide more complex medical care.
Individuals may need these services on a regular or occasional basis, for a few months or a lifetime. Examples of long-term services include nursing facility care, adult daycare, transportation, home health aide or family caregiving assistance and personal care services. Paid or unpaid caregivers can provide these services in many different settings, including in their homes, in community-based settings and in institutional settings, such as nursing homes and assisted-living facilities (see Figure 2).
2. Why is long-term care an important issue for state legislators?
The number of older Americans is expected to more than double by 2050, and many elderly people are living into their 80s and 90s. With advancing age comes the likelihood of increased disability, frailty and illness. In addition, medical and scientific advances mean that people born with developmental or other disabilities or who suffer injuries, such as traumatic brain injury, have greatly improved survival rates, but they may need assistance throughout their lives.
Source: “Medicaid and Long-Term Services and Supports: A Primer” The Henry J. Kaiser Family Foundation, May 26, 2017, http://kff.org/medicaid/report/medicaid-and-long-term-services-and-supports-a-primer/
State legislators face two major issues stemming from these demographic pressures: how to ensure that affordable and high-quality long-term services and supports are accessible to the growing population in need of such services (particularly for low-income people), and how to control their effect on state budgets.
Although it is difficult to contain costs and demand for the growing population of elderly and people with disabilities, state legislators can play a key role in reforming their LTSS systems. Many states have been reforming their Medicaid-funded long-term care systems by moving away from costly institutional care towards home- and community-based services (HCBS), which are often less costly and more popular. In fact, nearly 90 percent of adults age 65 and older wanted to stay in their current home and community as they age, according to an AARP survey. The federal government has been encouraging this trend toward HCBS through waiver and other options described in Question 4.
Legislators can foster this process by understanding the available options and learning what has worked in other states. They can ask agency directors to provide information about their state’s long-term care programs and their costs, populations served, benefits provided, eligibility standards, numbers on waiting lists and available options.
3. Who needs and receives long-term services and supports?
Approximately 12 million Americans of all ages rely on personal assistance and other long-term services and supports in their home, community or in an institutional setting. According to a 2013 U.S. Senate Commission on Long-Term Care report, that number is expected to increase to 27 million by 2050. Many people with developmental or severe physical disabilities, mental illness and cognitive impairment, as well as the frail elderly, need long-term services and supports.
Source: “Infographic: Medicaid Spending & Enrollment” The Henry J. Kaiser Family Foundation, May 26, 2017, http://kff.org/interactive/infographic-medicaid-spending-enrollment/
Individuals who require LTSS represent a diverse group, including children who are medically fragile, working adults and individuals over age 65 with different types of physical, cognitive and mental disabilities. LTSS use varies among populations. Medicaid is the largest single payer of long-term care services. Medicaid-eligible people who use long-term care services are among the most disabled and chronically ill of the total Medicaid population. Although they accounted for only 6 percent of the Medicaid population, Medicaid LTSS accounted for 35 percent of Medicaid spending in 2013, according to a 2015 Congressional Research Service report. Per-enrollee expenditures for individuals who are over 65 or disabled are up to four times the annual cost for children and adults, as shown in Figure 4.
Moreover, the number of people who need LTC services is expected to increase rapidly during the next several decades. People age 85 and older constitute the fastest growing population in the United States. Their numbers are expected to more than triple from about 6 million in 2015 to almost 20 million by 2060, foreshadowing an ever-expanding need for long-term services and supports. Millions of Americans receive publicly funded LTC services today or are paying for those services themselves while being cared for by family members. However, many other Americans go without needed services because they live alone without family support, lack the financial resources to pay for care, and/or lack information about the community resources that they might use.
4. What are the key LTSS issues and trends?
Long-term shifts in how and where individuals receive care are affecting the delivery and payment systems. Experts attribute the decline in nursing home use to the healthier lives of many older Americans today, their continued strong preference to remain in their homes and communities, and the increasing number of alternative services that enable them to live where they choose. The population over age 85—the segment most likely to require long-term care—will grow to over three times its current size by 2060. Even though reductions in the age-specific prevalence of functional disability will offset some of the demand for long-term services and supports, overall demand will still rise substantially along with population growth for older Americans.
Workforce Capacity As the population ages, the demand for long-term services and supports is projected to increase by almost 50 percent over the coming decade, translating to a needed 1.6 million new direct care workers, according to the 2013 Commission on Long-Term Care Report to Congress. At the same time, the workforce is projected to shrink as workers themselves are aging out of their working years. States have taken a variety of steps to improve workforce capacity to meet the expected demands, including policies to recruit and retain direct care workers, compensate family caregivers, and improve available data to inform workforce planning and investments.
HCBS Waivers. With consumers overwhelmingly indicating their preference for home- and community-based care and with evidence that such care is less costly in most cases, state policymakers have been redefining their LTSS systems. “Over more than three decades, Medicaid …LTSS have transformed from assistance provided primarily in institutional settings to the current reality in which home and community-based services (HCBS) are the norm,” noted a 2016 Truven Health Analytics report.
State Medicaid programs are required to pay for nursing home care and home health care for those who qualify under federal and state criteria. However, states may choose the populations and the services they will provide for home- and community-based services funded by Medicaid and/or state general revenues. States can apply for home and community-based services (HCBS) 1915 waivers to support certain Medicaid populations in home or other community-based settings instead of in institutional or long-term care facilities, as long as all federal requirements are met. The waiver allows states to meet the needs of a particular target groups by age or population, such as individuals with autism, cerebral palsy or HIV/AIDs. To qualify, individuals must demonstrate need for a level of care that would meet the state’s requirements for receiving services in an institutional setting. Several 1915 waiver options are summarized below (Table 1).
Table 1. Select 1915 Waivers
Section 1915(b) Managed Care Waivers
States use 1915b waivers to provide services through managed care delivery systems or to otherwise reduce enrollee choice of providers.
Section 1915(c) Home and Community-Based Services Waivers
1915c waivers allow states to provide long term care in home and community-based settings instead of within facilities.
Combined 1915 b/c Waivers
States may apply for different 1915 waiver authority to provide a continuum of services to seniors and people with disabilities, as long as all federal requirements are met.
States can offer a wide range of standard medical and non-medical services under an HCBS Waiver program. Standard services include case management, homemaker, home health aide, personal care, adult day health services, day and residential habilitation and respite care. States may propose “other services that may assist in diverting and/or transitioning individuals from institutional settings into their homes and community. According to CMS, state HCBS waiver programs are required to show that providing waiver services will not exceed the costs of providing services in an institution, that there are adequate provider standards to meet the population’s needs, and that services follow a person-centered care plan. In 2016, all 50 states and the District of Columbia had at least one program that provided assistance to individuals living outside of nursing homes, and most states offer more than one program. Currently, there are more than 300 active HCBS Waiver programs nationwide. CMS provides additional information and specific examples of the 1915 waivers by state.
Consumer-Directed Care. Another major trend has been toward consumer-directed care. In the 1970s, many younger people with disabilities began to challenge the traditional case-managed and agency-operated model of service delivery. The disability rights and independent living movements successfully advocated for a model under which a consumer could hire his or her own aide and direct how and when services were provided. Today, many publicly funded home care programs allow participants to help draft their care plans, select their personal care assistants (who may be family members), and direct their own services. Most consumers in these programs report greater satisfaction with this model of care and higher quality of life because they have greater control.
LTSS Spending Trends. Medicaid spending on home- and community-based long term services and supports outpaced spending on institutional long-term care for the first time in 2013 and continues to increase. In fact, 53 percent of Medicaid LTSS spending went towards home- and community-based care in 2014. As the share of total national LTSS spending on home- and community-based services has increased, the percentage of total spending on institutional care has declined (see Figure 5).
While Medicaid dollars are increasingly supporting home- and community-based care, the portion of spending varies by state. Several states are testing creative home- and community-based services programs that aim to empower consumers to direct their own care, e.g., draft their own care plans, select their personal care assistants (who may be family members), and direct how and when services are provided. States have implemented these innovations through various Medicaid waivers or state plan amendments.
5. Who provides long-term care?
The LTSS workforce is comprised of paid and unpaid caregivers. In 2014, 3.27 million direct care workers provided LTSS, comprising almost 21 percent of the nation’s overall health workforce according to a 2016 GAO report. Workers in the LTC system tend to be paraprofessionals, who carry titles such as personal care assistant, home care aide, resident care aide or certified nursing assistant. Low wages and limited benefits contribute to high employee turnover in nursing homes, home care agencies and other settings. The result can be inadequate care and poor quality of life for consumers, and high costs and low productivity for providers.
Most long-term services and supports are provided by unpaid caregivers—including relatives or friends—in home- and community-based settings. Approximately 34 million Americans provided unpaid care to an adult age 50 or older in the prior 12 months, according to a 2015 AARP report, translating to $470 billion in long-term services.
Workforce shortages that already exist in the long-term care system are likely to worsen in coming decades as demand grows, particularly in home and community care. Although the expansion of publicly funded consumer-directed care may ease the situation somewhat, finding answers to LTSS workforce issues remains a major concern for state policymakers. States also are improving consumer access to long-term care services by creating Aging and Disability Resource Centers that coordinate information and assistance. The centers are intended to serve as the entry point to a state’s LTC services and to help people make informed decisions about LTC options. In some states, the centers counsel and refer inquiring residents, regardless of income, to available community services and determine eligibility for publicly funded LTC services.
6. How much does LTSS cost and who pays for it?
LTSS spending includes payments for services provided in nursing facilities and residential care facilities, as well as in an individual’s own home. In addition, a significant amount of care is provided by informal, unpaid caregivers who fill the care gaps without compensation. Total national spending on LTSS from all sources totaled $310 billion in 2013, with Medicaid paying for 51 percent of total costs, followed by other public health insurance programs (21 percent), out-of-pocket (19 percent), and private insurance (8 percent) (see Figure 1 above).
Federal and state spending on long-term services and supports totaled $152 billion in 2014, a four percent increase from the prior year, according to a 2016 Truven Health Analytics report. Medicaid spending on home- and community-based long term services and supports outpaced spending on institutional long-term care for the first time in 2013 and continues to increase. In fact, 53 percent of Medicaid LTSS spending went towards home- and community-based care in 2014. The portion of spending on HCBS varies by state.
Various studies suggest that home and community-based services are cost-effective. According to the Kaiser Family Foundation, in 2015, the median annual cost for nursing facility care was $91,250. Generally, home- and community-based services are less expensive than institution-based care, but may still represent a major financial burden for individuals, their families and states. In 2015, the median cost for one year of home health aide services (at $20/hour, 44 hours/week) was almost $45,800 and adult day care (at $69/day, 5 days/week) totaled almost $18,000. Data reflect that it is cost effective to provide support to people who want long-term services and supports in their homes and communities.
The high costs associated with long-term services and supports exceed what most individuals can afford. The costs of long-term services and supports vary based on where one lives, the level and type of care needed and other factors. According to a 2016 report by Genworth Financial, the median costs for long-term care varied depending on the type of care needed, from $17,680 for adult day health care to $82,000 for nursing home care. The costs for the same level of care vary considerably between states. For example, the costs for a semi-private nursing home room range from $52,925 in Oklahoma to $131,853 in New York. The national and state-by-state median annual long-term care costs for each category of care are summarized here.
7. Can states reimburse family caregivers?
Approximately 34 million Americans provided unpaid care to an adult age 50 or older in the prior 12 months, according to a 2015 AARP report, translating to $470 billion in long-term services. Without their help, the costs to LTSS systems would “skyrocket,” noted the 2015 “Valuing the Invaluable” AARP report. States have several options for reimbursing family caregivers within their Medicaid programs.
Medicaid’s self-directed service option is consumer-directed care, meaning that the individual plays the key role in creating and managing his or her care plan. Under this option, eligible individuals can employ family or friends as their caregiver as long as the care recipient meets their state’s eligibility and income requirements, which vary across states. States can implement this option for their Medicaid beneficiaries though a Medicaid state plan amendment or a 1915(c) Home and Community Based Service waiver. The Medicaid state plan amendment options are the Home and Community-Based Services State Plan Option- 1915(i), the Community First Choice-1915(k) State Plan Option and the Self-Directed Personal Assistance Services State Plan Option-1915(j). Several states have used these options to compensate caregivers, including:
- Colorado’s Consumer-Directed Attendant Support Services Program (CDASS) allows participating individuals to choose their personal care attendant who receives reimbursement for providing approved services. This program operates under the authority of four 1915(c) Home and Community Based Service waivers for specific populations.
- Indiana’s Medicaid Aged and Disabled Waiver Consumer-Directed Attendant Care (CDAC) program allows consumers to manage their own services and supports, when and how they receive them and who delivers them. More information on the program eligibility, services provided, etc. can be found here.
- Texas’ Community First Choice Option, created through a 1915(k) Medicaid state plan amendment, provides home- and community-based services, which includes a consumer-directed care option for eligible individuals. The individual or their authorized representative hires and manages their care attendant, who could be a family caregiver.
8. Where can I learn more about LTSS?
LTSS and Medicaid
- Improving the Balance: The Evolution of Medicaid Expenditures for Long-Term Services and Supports, 1981-2014, Truven Health Analytics, 2016
- Long-Term Care in the United States: A Timeline, Kaiser Family Foundation, 2015
- Long-Term Care: The Basics, U.S. Administration on Aging, 2017
- Long Term Services and Supports, Centers for Medicare & Medicaid Services, Accessed April 2017
- Long Term Services and Supports for Older Americans: Risks and Financing Research Brief, Assistant Secretary for Planning and Evaluation, U.S. Health and Human Services, 2016
- Medicaid and Long-Term Services and Supports: A Primer, Kaiser Family Foundation, 2015
- Medicaid Expenditures for Long-Term Services and Supports (LTSS) in FY 2014, Truven Health Analytics, 2016
- “Medicaid’s Role in Providing Assistance with Long-Term Services and Supports,” a chapter in MACPAC Report to Congress on Medicaid and CHIP, 2015
- Medicare and Medicaid in Long-Term Care, Health Affairs, 2010
- No Wrong Door: Person and Family Centered Practices in Long-Term Services and Supports, AARP Public Policy Institute, 2017
- Raising Expectations: State Long Term Services and Supports Scorecard, AARP Public Policy Institute, 2014
- Report to the Congress, U.S. Senate Commission on Long-Term Care, 2013
- Self-Directed Services, CMS, Accessed 2017
- Can I Get Paid as a Caregiver? AARP, 2016
- Caregiver Statistics, Family Caregiver Alliance, 2016
- The Direct Care Workforce: A Report on Practices to Promote Quality Long-Term Care, Leadership Council of Aging Organizations, 2012
- Long Term Care Workforce, U.S. GAO, 2016
- Understanding Consumer Direction in Long-Term Care, Paying for Senior Care, 2016
- Valuing the Invaluable, AARP, 2015
LTSS State Plan Amendments and Waivers
- Home and Community Based Services Waiver Authorities (including 1915c, 1915i, 1915j, 1915k)
- Home and Community Based Services: Meeting the Long-term Care Needs of Rural Seniors, NCSL, 2011
- Medicaid and Long-Term Services and Supports, NCSL, 2013
- Medicaid Definitions: Waivers and Home and Community-Based Services, American Council on Aging, 2017
- Self-Directed Personal Assistant Services 1915(j), CMS, Accessed 2017
- State Medicaid Plans and Waivers, CMS, April 2017