Clinton proposal draws mixed response from industry
Clinton proposal draws mixed response from industry
Small step toward better coverage, industry says
On Jan. 4 and again during his Jan. 19 State of the Union Address, President Clinton called for a four-part long-term-care initiative to bring financial relief to Americans who care for elderly relatives in their homes. The main provision of the plan is a $1,000 annual tax credit either for those receiving care or their family member-caregivers. The credits would affect about 2 million Americans and cost $5.5 billion over five years.
Other parts of the plan include:
• creating a national family caregivers support program, one-stop shops in each state where caregivers could receive information and referrals for other services, and their loved ones could enter adult day care or respite programs;
• educating Medicare beneficiaries about their long-term care options;
• having the federal government, the nation’s largest employer, offer private long-term care insurance to federal employees;
Clinton will ask Congress for $625 million in grants over the next five years to state and local agencies on aging, created by the Older Americans Act of 1965, to set up the family caregivers support program. The initiative to educate Medicare beneficiaries, expected to cost $10 million, will help them understand they are not covered for most long-term care, outline what to look for in supplementary private insurance, and inform them that they may be eligible for long-term care welfare benefits under Medicaid.
Bipartisan support — for now
During his State of the Union Address, Clinton said: "Long-term care will become a bigger and bigger challenge with the aging of America — and we must do more to help our families deal with it. . . . I can tell you that one of the greatest concerns of [the baby boom] generation is our absolute determination not to let our growing old place an intolerable burden on our children and their ability to raise our grandchildren. Our economic success and our fiscal discipline now give us the opportunity to lift that burden from their shoulders, and we should take it."
The long-term care plan drew initial bipartisan support from Congress. "These items were contained in the Republican Contract with America, and we passed them as a $6.5 billion health care initiative in December 1995," said House Ways and Means Health Subcommittee Chairman Bill Thomas (R-CA). "Since President Clinton vetoed these Republican provisions in 1995, I’m delighted he has changed his tune and is supporting them today. Every year, millions of Americans go without adequate long-term care because they are forced to go without many services. This GOP initiative the president has adopted can make a difference."
Senator Harry Reid (D-NV), who serves on the Senate Special Committee on Aging, said, "I think this is really in keeping with what I believe is needed. We need to pass this legislation."
It’s about time
Associations representing caregivers hailed the initiative. "Family members are the heart and soul of our caregiving system. They provide at least 70% of the care for people who have Alzheimer’s disease, and they do so at enormous personal cost — physical, emotional, and financial. Every family struggling today to keep a spouse or a parent or grandparent at home will understand and appreciate the importance of what the president is doing today," said Stephen McConnell, senior vice president of the Alzheimer’s Association, in Chicago. "This initiative will help millions of hardworking families address a real problem and should draw strong and immediate bipartisan support. The Alzheimer’s Association will work aggressively with the president and Congress to see these proposals enacted into law this year."
More associations have welcomed the proposal.
"We warmly welcome the president’s far-reaching long-term caregiving initiatives announced Jan. 4," said Suzanne Mintz, president of the National Family Caregivers Association, based in Kensington, MD. "For years, family caregivers have been the invisible majority providing the day-in and day-out care for America’s long-term health care recipients. They provide 80% to 90% of all long-term care services. Recent studies have shown a conservative market value of their services to be $194 billion a year. We support all initiatives that recognize and support family caregivers."
Some home care providers and industry representatives also hailed the plan and pledged to work for its implementation.
"As an industry, we need to make sure that Congress passes the initiative. If not the tax credit, then at least the long-term care insurance provision for federal employees. It’s the first step in community-based, long-term care becoming a bigger conversation nationally," said Judy Clinco, president of Tucson, AZ-based Catalina In-home Services. Clinco also serves on the board of the Home Care Aide Association of America, based in Washington, DC.
Others were less enthusiastic.
"This is really just a Band-Aid on a very serious problem and more of a distraction than anything else," said Ann Howard, executive director of the American Federation of Home Health Agencies in Silver Spring, MD. "It’s not a bad idea as a complement to the Medicare home health benefit, but a $1,000 annual credit is a poor substitute for the revocation of the Medicare home health benefit for long-term, medically complex patients. The patients we are talking about are those who are considered too sick,’ and this will only translate into two or three weeks of care before these patients have to be shipped off to a nursing home or another institutional setting."
Another shrug-of-the-shoulders response came from Florida.
"It’s better than nothing, but it’s not going to help a lot of people. The biggest thing that impedes people from assuming accountability for coverage themselves is the deductibility of premiums and benefits in general," said Marc Catalano, president of Catalano’s Nurses Registry, in Hialeah, FL. Catalano is also president of the Private Care Association, based in Washington, DC.
Reacting to criticisms that the proposed $1,000 tax credit is meager in comparison to the actual cost of long-term care, Mintz said, "It’s not going to help people cover all their out of pocket costs, but it’s not chicken feed either. It’s a good beginning that brings attention to caregivers, and begins to make long-term care a national debate. It’s a first step that could have a legislative life."
Despite aging population, coverage is scarce
According to the White House, the aging of America will only increase the need for quality long-term care options. The number of Americans age 65 or older will double by 2030 (from 34.3 million to 69.4 million), so that one person in five will be elderly. The number of people 85 or older, nearly half of whom need assistance with everyday activities, will grow even faster, from 4.0 million to 8.4 million. The average life expectancy will also increase to 82 by the middle of the next century, up six years from today’s average.
Despite the aging population, long-term care insurance remains relatively scarce, with only about 5% nationwide market penetration, according to industry sources. However, in its two most recent annual surveys of long-term care insurance companies, the Health Insurance Association of America (HIAA) found dramatic increases in the number of long-term care policies issued. Over 500,000 and 600,000 new long-term care policies were issued in 1995 and 1996, respectively, setting new sales records. The market has grown an average of 22% each year between 1987 and 1996.1
HIAA attributes the splurge in new policies to the Clinton Administration’s failed mid-1990s health care reform initiative, which "delivered a strong message that [the U.S. government] would not take responsibility for financing health care for all, and that individuals would have to find the means to finance their own health and long-term care needs."2
The August 1996 passage of the Health Insurance Portability and Accountability Act (also known as the Kassebaum-Kennedy bill) also increased consumer interest in long-term care insurance, according to HIAA. It included long-term care insurance consumer protection standards and clarifications of the federal tax treatment for long-term care insurance.
As the population continues to age and more and more individuals are faced with caring for elderly loved ones, interest in long-term coverage will only increase.
Ironically, the long-term care proposal may suffer, or change significantly before passage, because of the Clinton Administration’s other social welfare interests. During his State of the Union Address, Clinton also outlined a cornucopia of more controversial measures involving the Social Security Trust Fund, Medicare, private savings accounts, and a patient bill of rights.
To build grass-roots support for the long-term care initiative, Clinton announced on Jan. 4 that Vice President Al Gore will hold a series of forums across the country.
References
1. Health Insurance Association of America. Long-Term Care Insurance in 1996. Washington, DC; September 1998.
2. Health Insurance Association of America. Long-Term Care Insurance in 1995. Washington, DC; May 1997.
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