Proposed legislation to create a federal program within Medicare to support those with substantial long-term care costs when they need care is drawing support from senior living industry groups.

Rep. Frank Pallone Jr. (D-NJ), ranking member of the House Energy and Commerce Committee, discussed the idea Wednesday at a New Jersey roundtable with aging services providers and advocates for those with disabilities. His proposed bill, called the Medicare Long-Term Care Services and Supports Act of 2018, includes:

  • A standard cash benefit within Medicare for anyone who is eligible for Medicare and those aged fewer than 65 years who meet certain disability thresholds. The benefit would begin after a two-year waiting period that functions as a deductible. The discussion draft of the proposal also solicits comments on a potential cash deductible alternative for certain beneficiaries.
  • A self-directed benefit that could be used toward all long-term services and supports, including personal care services, home health aide services, transportation, assistance provided by a family caregiver, nursing home care and adult day programs.
  • Incentives for people to seek care at home but also available for nursing homes.
  • Relief for family caregivers in the form of respite care coverage.

“It’s time to expand Medicare to include a long-term care benefit so that millions of seniors and individuals with disabilities no longer have to face financial ruin before they get assistance,” Pallone said in a statement. “I’m hoping that this proposal will begin an important discussion and look forward to getting feedback from interested stakeholders.”

Health Care Association of New Jersey Vice President John Indyk and LeadingAge New Jersey board member Doug Struyk, who is president and CEO of Christian Health Care Center, participated in Pallone’s roundtable discussion.

“It is estimated that about half of all older adults will lose the ability to care for themselves during their lifetimes and will need help with everyday activities,” LeadingAge President and CEO Katie Smith Sloan said in a statement. The average out-of-pocket cost for LTSS is $140,000 over the course of a person’s lifetime, according to information provided by Pallone.

“We commend Rep. Pallone for proposing a new Medicare long-term care benefit that addresses this critical issue,” Sloan added, adding that her organization will work with Pallone and others to advocate for an improved approach to LTSS financing.

Argentum COO Maribeth Bersani told McKnight’s Senior Living that her organization also “applauds Rep. Pallone for moving forward to address this critical issue.”

Argentum has been working with Congress over the past several years “to explore the best opportunities and approaches for the federal government to help address this looming long-term care financing crisis,” she said.

“As Americans are living longer and needing increased long-term care services and supports, a strain is being put on individual retirement savings,” Bersani said. “And the sad reality is that the next generation of senior living residents, the baby boomers, have not saved adequately for their future long-term care needs.”

The oldest baby boomers are turning 72 in 2018. The youngest ones are marking their 54th birthdays.

Fifty-eight percent of boomers report having any retirement savings, and only 25% believe they are doing, or did, a good job financially preparing for retirement, according to a 2018 Insured Retirement Institute report cited by Argentum.

“There may not be just one solution to this issues, but perhaps multiple approaches that can be implemented to help people plan for and finance their future long-term care needs,” Bersani said.

Clif Porter, senior vice president of government relations at the American Health Care Association / National Center for Assisted Living, also mentioned baby boomers as a reason the proposed legislation is needed.

“The ability to afford long-term services and supports is a critical issue for so many Americans, whether in nursing centers or in home- and community-based settings,” he told McKnight’s Senior Living. “Energy and Commerce Ranking Member Pallone is a true champion of this issue, and we appreciate his leadership to start this dialogue, especially as we continue to prepare for the millions of baby boomers who will soon require these services.”

AHCA/NCAL is examining Pallone’s proposal more closely and will provide input “to ensure a robust program for seniors and providers,” Porter said.

A discussion draft, section-by-section summary of the discussion draft and one-page description of the proposal are available online.

Those interested in providing feedback are asked to do so by June 15 by emailing ECDem.Comments@mail.house.gov.